Analysis GM and Chrysler Don't Mix

Merger would fail to take on Asian competitors

The Automotive Buyer Dynamics service of Strategy Analytics (www.strategyanalytics.net)has released, "GM and Chrysler: United They Stand, or United They Fall?," which notes few synergies and substantial obstacles to any acquisition of Chrysler by GM.

During its research into new vehicle buyer behavior, Strategy Analytics asked US buyers which brands of vehicle they currently owned, and which were likely to be on their shopping list for future purchases. An analysis of this data for the top-four selling US and Asian brands shows a distinct split: owners of US-brands are far more likely to shop for another US brand than an Asian one; and Asian brand owners are looking predominantly to Asian brands for their next vehicle. Any GM-Chrysler link would thus see the combined entity competing primarily with Ford and itself--and still struggling to counter the threat from Japanese and Korean (as well as, perhaps, future Chinese) automakers.

"Most other automakers," stated Ian Riches, service director of Automotive Buyer Dynamics, "have little to fear from any GM-Chrysler connection. The ones most threatened by it would include Ford of North America, which would perhaps see re-invigorated competition for US-loyal buyers, and GM and Chrysler themselves, which face significant challenges in pulling off such a deal."

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