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Indego / IndeGo Forum / 2008 Outlook

2008 Outlook


Wednesday, 02 January 2008 00:00

As we enter 2008, it seems like a good time to consider what the major strategic moves will be within the next 12 months in the automotive industry.  It is always tough to anticipate which moves will turn out to be truly strategic – game-changing, rather than simply actions with the potential to be that, but which then fail through poor planning or execution.  However, I feel that there are three areas where there will be game-changing moves.

Firstly, I believe that the acquisition of Jaguar Land Rover by Tata (and closer links as a result with Fiat Group), and the acquisition of Nanjing Automobile Company (NAC) by Shanghai Automotive Industry Corporation (SAIC), will mark the emergence of Tata and SAIC as two of the global industry leaders of the future.  I have previously said that there is the potential for a Russian player to join them, but I do not believe we will see any evidence of that in 2008.

Secondly, I think that the position of Ford Motor Company is untenable, and significant changes will occur during 2008 which fundamentally reshape the future of what has been one of the most iconic manufacturers of the 20th century.  Family tensions and continuing under-performance could result in the Ford family ceding control of Ford Motor Company during 2008.  As a minimum, I anticipate a new alliance will be formed which will ultimately lead to the change of control.
My final projection is that the high hopes of a Russian bonanza for inwards investors will be dashed by the end of 2008.  The same mob instinct which drove previous investment in Brazil, India and China is now well established in Russia.  However, the supplier sector is still woefully under-developed, and nationalistic policies will continue to grow, as they did in China and India.  The western and Asian manufacturers will continue to be players in Russia, but it is not going to prove their salvation from market stagnation in traditional markets. This will therefore signal the start of the real race for survival by developing a sustainable business model for mature markets, rather than continuing to search for low-hanging fruit elsewhere.  Perhaps IndeGo is the answer….?

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