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Japan could consolidate to three automakers by 2020

Sergio Marchionne might see his dream of big mergers in the auto industry become a reality, and an analyst thinks Japan is a likely place for consolidation to happen. Takaki Nakanishi from Jefferies Group LLC tells Bloomberg the country's car market could combine to just three or fewer major players by 2020, from seven today. "To have one or two carmakers in a country is not only natural, but also helpful to their competitiveness," Nakanishi told Bloomberg. "Japan has just too many and the resources have been too spread out. It's a natural trend to consolidate and reduce some of the wasted resources." Nakanishi's argument echoes Marchionne's reasons to push for a merger between FCA and General Motors. Automakers spend billions on research and development, but their competitors also invest money to create the same solutions. Consolidating could conceivably put that R&D money into new avenues. "In today's global marketplace, it is increasingly difficult for automakers to compete in lower volume segments like sports cars, hydrogen fuel cells, or electrified vehicles on their own," Ed Kim, vice president of Industry Analysis at AutoPacific, told Autoblog. Even without mergers, these are the areas where Japanese automakers already have partners for development. Kim cited examples like Toyota and Subaru's work on the BRZ and FR-S and its collaboration with BMW on a forthcoming sports car. Honda and GM have also reportedly deepened their cooperation on green car tech. After Toyota's recent buyout of previous partner Daihatsu, Nakanishi agrees with rumors that the automotive giant could next pursue Suzuki. He sees them like a courting couple. "For Suzuki, it's like they're just starting to exchange diaries and have yet to hold hands. When Toyota's starts to hold 5 percent of Suzuki's shares, this will be like finally touching fingertips," Nakanishi told Bloomberg. "I absolutely do believe that we are not finished seeing consolidation in Japan," Kim told Autoblog. Rising development costs to meet tougher emissions regulations make it hard for minor players in the market to remain competitive. "The smaller automakers like Suzuki, Mazda, and Mitsubishi are challenged to make it on their own in the global marketplace. Consolidation for them may be inevitable." Related Video:

Tier 1 suppliers call GM the worst OEM to work with

Among automakers with a big US presence, General Motors is the worst to work for, according to a new survey from Tier 1 automotive suppliers, conducted by Planning Perspectives, Inc.
The Detroit-based manufacturer, which has been under fire following the ignition switch recall and its accompanying scandal, finished behind six other automakers with big US manufacturing operations. Suppliers had issues with trust and communications, as well as intellectual property protection. GM was also the least likely to allow suppliers to raise their prices in the face of unexpected increases in material cost, all of which contributed to 55 percent of suppliers saying their relationship with GM was "poor to very poor."
GM's cross-town competitors didn't fare much better. Chrysler finished in fifth place, ahead of GM and behind Dearborn-based Ford, which was passed for third place this year by Nissan. Toyota took the top marks, while Honda captured second place.

Will states start to prevent you from registering cars that have pending recalls?

The impact of 2014 – henceforth known as Year of the Recalls – will have long-ranging consequences on the auto industry. One of the biggest changes, though, might not be in the way manufacturers inform the government of pending recalls or in the way Uncle Sam punishes automakers that violate its rules, but in the ability to sell cars with pending recalls. And strangely enough, the charge is being led by an automaker. Honda Executive Vice President Rick Schostek, pictured above, argued during a meeting of the Senate Transportation Committee that the government needs to take a role in mandating that consumers have recall services performed. That could include withholding registration for vehicles with pending recalls, Bloomberg reports. Honda is just one of the automakers currently embroiled in the massive Takata airbag recall. "It's a good idea," safety advocate Clarence Ditlow said, according to Bloomberg. "California won't give you a registration if you have an emissions recall. Why not a safety recall?" "Honda is going to use any innovative tools to find customers and get these recalls done," Schostek told the Transportation Committee. The exec, aside from echoing Ditlow's viewpoint, also argued for requiring dealerships and garages to inform vehicle owners of incomplete recalls, regardless of the service provided. Schostek also made an argument that state governments could step in, as well. Whatever ends up happening, it's fair to say that between Takata and General Motors, the future of recalls for American consumers are set for significant changes. News Source: BloombergImage Credit: J. Scott Applewhite / AP Government/Legal Recalls Honda Ownership Safety