Loading...

The 6 Worst Mergers In Automotive History

2w ago

42.9K

With the latest news regarding the Renault-Fiat merger stating that the deal fell through, my mind started thinking. In theory, mergers in the automotive world are acts of genius. You have two companies (or more in some cases), joining forces, helping each other out in the areas the other is lacking, so that the end product is something that keeps the rivals awake at night. But, things almost never work out that way, with corporate politics and an undying thirst for money turning what should have been a beneficial cooperation into a toxic mash of broken dreams, hearts and, most of the times, wallets. So here are the 6 worst mergers in history:

6. Citroen-Maserati

The most well known product of the Citroen-Maserati merger, the Citroen SM

In 1968, Citroen turned to Maserati to develop and manufacture a V6 engine for its soon-to-be released flagship coupe, the SM. Maserati delivered and the merger was announced and it seemed like a beautiful idea. Citroen would get its engine for the SM as well as expertise on developing its own engines in the future and Maserati would have secure financial backing to make more cars, earning more money in the process. And for a while it worked, with Maserati releasing cars like the Bora, the Merak and the Khamsin and the SM finishing third on the 1971 European Car Of The Year contest and even winning Motor Trend's Car Of The Year award for 1972. So what went wrong? When the oil crisis hit in 1973, Citroen's cash supply started drying up, which meant that Maserati was also in deep trouble, cause right about that time the Quattroporte II was being developed. It was supposed to be a major leap forward from its predecessor, based on an elongated SM chassis and featuring Citroen's famous hydropneumatic suspension. Citroen's financial troubles though meant that the Quattroporte II couldn't get type certified and so only 12 were ever made. After that Citroen went bankrupt and put Maserati into liquidation, with Alejandro de Tomaso saving the latter at the eleventh hour. Meanwhile, Citroen got sold to Peugeot and from that moment on it started losing the weird charm it was known for.

5. Lamborghini-Chrysler

The only good thing to come out of that Italo-American marriage, the Diablo

To be fair, Chrysler isn't the worst owner Lamborghini ever had, but you get the feeling that they only used the brand as a publicity stunt. In 1987 the Mimran brothers sold Lamborghini to Chrysler, a move that at the very least can be described as risky, as not too long before that Chrysler was almost bankrupt. Immediately, Chrysler stopped production of the Jalpa, the baby bull Lambo, and of the LM002, otherwise known as colonel Gaddafi's grocery-getter, meaning that Lamborghini was only left with the aging Countach that was fast approaching its 25th anniversary. So Lee Iacocca turned to Marcello Gandini and tasked him with designing the Countach's replacement, who in turn came up with a design that was deemed "too risky" by the chair holders in Auburn Hills. The redesign that was commissioned in Detroit, left Gandini so unimpressed that he took his original design and made the Cizeta V-16T. Chrysler also put Lamborghini in F1, first as an engine supplier and then as an actual team, just so Chrysler itself could get some publicity. Meanwhile, Lamborghini was getting nothing out of it and was even losing money, which in turn meant that Chrysler was losing money. Initial sales of the Diablo were strong but by 1994 interest was plummeting, and so to avoid another bankruptcy, Chrysler sold Lambo to two Indonesian businessmen, which kept them afloat for four more years until they merged with another car maker, but more on that later..

4. Renault-Nissan

The Alliance's crown jewel, the Nissan Qashqw.., Qwask.., you know what it is.

Much has been written about the unholy Alliance but words can't do justice. Our story begins in 1999, when Renault bought 36.8 % of Nissan's stocks. Not long after that, in 2002, the Renault-Nissan alliance was born, in a move that has so far proved catastrophic for Nissan. "But why?" I hear you asking. "The Qashqai is selling in huge numbers, bringing in a huge profit". Well, the problem here is that Nissan has surrendered to Renault, both economically and mechanically, which in turn means that Nissans nowadays are rebadged Renaults, and that's not a good thing once you realize that Renault itself doesn't have the best reputation for reliability. The result of all this are unreliable cars, full of all kinds of electrical and quality issues that just shouldn't be associated with a company with such pedigree as Nissan. Sadly though, things are only going to get worse as the Alliance is holding up and isn't showing any signs of slowing down any time soon.

3. MG Rover Group-BMW

BMW's last attempt at bringing Rover around, the 75.

By the time BMW acquired the half dead MG Rover Group in 1994, the writing was on the wall for the long lost gem of the British car industry. Yet, BMW poured millions into the Group, in an effort to bring things around. In a matter of 2 years since BMW took over, the 200 and 400 Series were introduced, which despite some Honda connections were indeed new cars. The public wasn't interested though and saw Rover as everything that was wrong with the British car industry, and as such interest was lost and that translated to below average sales. BMW though kept going at it and in 1998, Rover revealed their best car yet, the 75. Classic lines, strong engines (albeit with some issues) and BMW quality in the interior meant that the 75 had high hopes for strong sales. Unfortunately it came a bit too late and eventually BMW sold the MG Rover Group which barely went on till 2005. This was a merger that put BMW in debt yet returned nothing, which goes to show that the public's perception is the strongest factor in any business deal.

2. Daimler-Chrysler

The Chrysler 300C is the DaimlerChrysler merger in one photo.

It was a marriage made in heaven. At the time the $38 billion deal got signed in 1998, it was the largest cross border deal ever. And it seemed like an excellent idea. Daimler would have a stronger and more consistent presence in the US, and Chrysler would have secure financial support that would allow for the development of new cars. But things went downhill very fast. From the very early stages of the deal it was apparent that Daimler wasn't aiming at just having Chrysler as a partner, but at turning it into a fully owned subsidiary. Investors went back and forth with lawsuits and within the company people weren't pleased with Chrysler. Finally, in 2007 Daimler sold Chrysler, with both companies losing gigantic amounts of money. The DaimlerChrysler merger gave us such sorry excuses for cars, like the Chrysler Crossfire, which was based on the first Mercedes SLK and the Chrysler 300C, which was based on an almost 20 year old Mercedes E-Class platform. But even more absurd, is the fact that the current crop of Chryslers and Dodges, like the 300, the Charger and the Challenger are still based on that same ancient platform! DaimlerChrysler then stands as a bright example of what not to do in a business deal.

1. Saab-GM

The 9-7x and the 9-2x (pictured above) are the most un-Saab Saabs.

You can't talk about bad mergers and not mention this magic combination of bad management and corporate politics. GM managed to murder Saab in the most painful way possible, by making it a fully owned subsidiary. GM bought Saab in 1998 and the deal was a work of art, as GM gained a foothold in the European luxury car market and Saab gained access to GM's parts bin. Since day one though, there was a clear problem. Saab and GM were never on the same page, cause GM wanted rebadged Opels/Vauxhalls and Saab was being Saab. Inevitably we got some rebadged monstrosities, like the 9-7x which was nothing more than a Chevy Trailblazer with the key in the middle, and the 9-2x, which was a Subaru Impreza, with weird seats, but generally Saab was doing its own thing, and that meant that it cost more to run Saab than any other brand. GM's desperate attempts at taming the Swedish brand only made things worse as sales were poor. Finally, in 2009 GM sold Saab to Spyker, but the car maker never recovered from more than 10 years of GM's tyranny, and in 2012 closed up shop for good. Saab is missed and this failed merger gives us the number one rule of any deal. Always make your intentions clear from the start.

Do you think worst mergers have taken place in the automotive world. Write your opinion it the comments!

Loading...
Loading...
53
Loading...