FCA call for mergers across motor industry

The FCA has released an independent report that makes the case for a sharing of core components on a global scale, including engines and transmissions, by car manufacturers.

The presentation puts forward the argument for a mass merging of engineering and development and even a merging of factories between brands. The report says, ‘It is about choosing mediocrity or fundamentally changing the paradigm for the industry.’

The report also discusses the expenditure on research and development (R&D) by automotive firms and how this has spiralled upwards since the low point of 2008, after the credit crunch.

Figures in the report state that a total of £55bn was spent globally by the biggest car manufacturers in 2008 and this seen a rise to £87bn in 2014.

The document suggests that spending will continue to rise, as car makers are pressured to invest in ever more efficient powertrains, greater levels of active safety and autonomous driving technology.

On goes on to say that when compared with other industries the automotive industry has to invest in products that have a much shorter lifecycle and (usually) lower profit margins, further raising costs.

The report also proposes that car makers ditch traditional approaches and work towards major R&D and production sharing platforms, transmissions and even factories across the industry.

Brand would remain separate entities and concentrate on differentiation through design and branding.

Despite the obvious benefits of such a huge merger, many industry experts are unconvinced that wide-ranging mergers like the one proposed would ever be likely however there has been a noticeable increase of car manufacturers working together and sharing technologies.