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The Auto Giant Partnerships

Generally, auto makers go in search of new partners when they want to expand their marketplace of new vehicles or in new areas where they plan to sell the vehicle. Right now, the trend is changing. Car makers look for partners who can help save fuel. They want to build relationships with companies that can provide fuel-saving technologies helping the cars comply with the stringent mileage and emission norms.

Europe, the U.S. and even countries like Japan and China are bringing in strong standards that are going to enhance development costs for the car manufacturers who are already working hard in a tough environment. These nations are trying to bring down carbon dioxide emissions and the new standards are further pushing car makers to build new partnerships.

Alternative technologies become too expensive and as different regions prefer different technologies, car companies cannot focus on a single mechanism. Europe has begun producing diesel-powered autos while the U.S. and Japan are focusing on gas-electric hybrids.

Giant Partnerships in the Auto Industry

Daimler AG with BYD Auto

German auto major Daimler AG is rearranging its portfolio of corporate holdings. Selling stakes in McLaren Group and India's Tata Motors, Daimler AG will be investing in a new relationship. This time it will be with Chinese car maker and battery specialist BYD Auto. While Daimler is an expert in electric vehicle construction, BYD is a master in battery technology and e-drive systems. The two are sure to make a perfect match. The sale of McLaren and Tata stakes is clearing up capital which can effectively be used in the Daimler-BYD electric automobile venture.

Tata Motors with Miljo Grenland Innovasjon

Tata has got its hands on 50.3 per cent stake in Norway's Miljo Grenland Innovasjon at an acquisition cost of Rs 9.4 crore. Miljo Grenland Innovasjon is a specialist in developing innovative solutions for electric vehicles. Now, it is all set to develop electric vehicles based on Tata Motors' products. This will help Tata Motors too. It will help Tata realize its tactics of producing cost-effective, fitting and maintenance-free mobility solutions through electric and hybrid automobiles.

PSA Peugeot Citroën with Mitsubishi

The French car maker PSA Peugeot Citroën is an expert in diesel technology and has formed a venture with Japan's sixth largest automaker, Mitsubishi Motors Corp. The two companies will jointly produce electric cars. Peugeot recently considered an equity tie-up with Mitsubishi and the two will broaden the current successful co-operations. PSA had signed an agreement with Mitsubishi to develop an electric car, the Citroën C-ZERO, for the European market. This automobile, based on i MiEV four-door car will be on sale in Japan.

Volkswagen AG with Porsche

Environmental regulations too are prompting joint ventures. Volkswagen AG recently teamed up with Porsche which usually sold only high-performance, low-mileage cars. Porsche wanted to acquire VW, but ended up being purchased by the German auto giant. This will probably be the plight of other small car makers too that make large automobiles putting off the environmental barriers.

GM and Ford Motor Co. with LG

The new technologies are also leading to partnerships between auto makers and battery manufacturers. The intention is to produce electric cars. General Motors and Ford have signed agreements with a South Korean battery manufacturer, LG which is not a traditional auto supplier. LG Chem's U.S. unit has reached a deal to supply next-generation lithium-ion batteries for Ford Motor Co. and General Motors. So, the exact battery sales by South Korea's No.1 chemicals company will now depend on how many cars the two auto makers sell.

GM with Reva

GM and Reva have partnered to produce a zero-emission car for India. If successful, it will be launched in South Korea, Europe and China too. The two companies are producing the small and cost-effective version of the Chevy Spark using Reva's electric drive train, battery and power management system technologies. GM's contribution would be the Spark platform and manufacturing space. While GM has the wide network and manufacturing strength, Reva has the appropriate technology.

Volkswagen AG and Suzuki Motor Corp

The two auto companies have linked arms. Volkswagen has bought 19.9 per cent of Suzuki and Suzuki has spent half this money on buying VW's shares. The partnership is helping both the companies. While Suzuki is gaining access to VW technology, Volkswagen too is gaining profit by enhancing its small car production and shares Suzuki's credit in India and Southeast Asia.