The Car World is changing

Here’s an interesting fact that everyone already knows: The automotive industry is changing.
Cars are becoming lighter, engines are becoming smaller and technology is taking over. However, there is another point that people tend (usually on purpose) to forget. The money is no longer where it was.

What happened in the last week is that apparently, Dar Investments, the Kuwaiti investment firm, is looking to offload one of its assets. Nothing new there, right? Only problem is, that asset is Aston Martin. Now, this is all speculation still, it is not carved out in stone yet. The really interesting information for me though, was who the potential candidates for taking over the English brand were.

The first one is Toyota. They even recently did an audit of Aston Martin, in order to see if it would be financially viable to take on the English manufacturer. I mean, let’s face it, Toyota is on a roll, making exciting cars, and one way to continue in that direction would be to take over a sports-car brand.

The second one though, is less obvious. It is an Indian firm, called Mahindra. People in the USA know them for their tractors. Mahindra do make cars, mostly rugged off-roaders and SUVs, and they also make the now rebadged Dacia Logan, and recently, they took on Reva, makers of the low-cost electric car. Seems like they are on a diversification spree, and Aston Martin would be a good addition to their portfolio. Already, the Aston Martin purists are crying foul, but they should think for a second.

This is not a new phenomenon. Remember a few years ago, when Jaguar and Land Rover were for sale? Ford was getting rid of the brands as they could not make them profitable. Who took them on? A fairly unknown brand called Tata. Oh how the European and American ‘enthusiasts’ cried! How could an unknown company from a developing country take on such a pair of established brands?
Fast forward a few years and guess what? Jaguar just announced a 10% rise in sales in the month of October 2012. Its range is all new, and for once, all their cars look amazing. No rebadged Ford Mondeos here anymore. Land Rover is on a roll too, the Evoque is selling like hot cross buns around the world and they just announced expanding by another 10 models by 2016. People were scared Tata would take them down, but in reality, they are doing better than they ever have!

So in my mind, Aston Martin should be sold to Mahindra. (the only issue at the moment, is that Dar want over $800 million for Aston, but Mahindra is offering less) Aston Martin was also sold by Ford as they could not make the brand profitable. Maybe the Americans do not know what it takes to make a British luxury car. The Indians though know more how the British work compared to the Americans, and they also know a thing or two about luxury.

The biggest irony in this is, these symbols of British craftsmanship and pride may now become Indian assets. Only 50 years ago, it was Britain who ruled India!

And that is why the automotive industry is profoundly changing. Before, the rich companies that owned everything were in USA or Europe. However, with all the crises, ownership is changing hands, and who is saving them? The Indian, the Chinese and other Asian companies. Companies who apparently are new to all this car business (not really true, but that is the way people see it…). Look at Volvo for example, if it was not for Geely (a Chinese brand), they would have disappeared. When Peugeot goes under, I will not be surprised to see them go into Indian or Chinese hands.

(Thinking about it, not really the first time India saved British luxury car brands. Without the Maharajahs in the 1920s, Rolls-Royce would have disappeared during the great Depression…)

Advertisements

About justdrivethere

Automotive enthusiast, Travel seeker, Whisky aficionado
This entry was posted in Auto Industry and tagged , , , , , , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s