Talks between General Motors Corp., on one hand, and Nissan Motor Co. and Renault SA, on the other, concerning a three-way alliance have collapsed, as the U.S. automaker couldn’t find a good enough reason to form such an alliance. The unanimous decision by GM’s board to reject the alliance appears to reflect the U.S. automaker’s confidence that it can rebuild itself on its own, although the path may not be an easy one.
For Renault-Nissan, the collapse of the talks means a lost chance, for now, to acquire the resources helpful toward catching up with Toyota Motor Corp., which analysts say could overtake GM as the world’s biggest automaker — in terms of the number of vehicles sold — in the next few years.
GM suffered a loss of $10.6 billion in the business year ended December 2005. Its market share in the U.S. has been on the decline because it relies mainly on large pickup trucks and sport-utility vehicles, both of which deliver relatively poor fuel efficiency. For its part, Nissan has been suffering from decreasing new-vehicle sales in the domestic market for almost a year. It is also reported to be lagging behind other automakers in safety-enhancing and environment-friendly technologies.
Talks about an alliance began in July at the instigation of Mr. Kirk Kerkorian, GM’s largest private shareholder, who saw a way to save the ailing GM. The alliance would have realized cost savings and technological cooperation, especially in the development of clean, fuel-efficient engines. Although the deadline for the GM and Nissan-Renault talks was set for Sunday (Oct. 15), the talks bogged down earlier when GM concluded that it would benefit less from the alliance than would Renault-Nissan. The collapse became inevitable when GM asked Renault-Nissan to pay compensation. GM feared that entering the alliance would prevent it from pursuing other alliance partners.
Still, the search for new alliances will go on. Toyota’s outstanding business performance and the need for technology for better safety, fuel-efficiency and pollution control are likely to spur and accelerate such moves among automakers.
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