Ford and VW on collision course

These days being a standalone car company is almost as frightening as being a standalone global agency network. Both species know their days are numbered; the only issues are when they will surrender their independence, to whom and for how much.

Such thoughts must preoccupy the Quandt family, controlling shareholders in BMW. Publicly, they are dead-set against a sale, but it is difficult to see how they can avoid one. By today’s standards – despite admirable consistency of branding, build quality and product innovation – BMW is a middleweight. It recognised as much when it bought Rover back in 1995. Unfortunately, its disastrous dalliance with the mass market has lost it irrecoverable time.

But BMW’s loss is almost certainly Ford or VW’s gain. A round of consolidation, unmatched in the past 75 years, has shrunk the car industry into six giants: GM, Ford, VW, Toyota, Renault and Daimler/Chrysler. One intended side-effect has been the virtual elimination (Porsche being the major exception) of the independent luxury car marque, with its useful margins and even more useful halo effect.

Ford has been most successful in amassing a power house of luxury brands. By stealth and careful persuasion it has acquired Jaguar, Aston Martin, Volvo and most recently, Land Rover. GM, the world’s biggest car maker, might seem the most obvious competition in this area. And indeed GM has acquired Saab, flirted with Lotus and bought a 20 per cent stake in Fiat (hence in Alfa Romeo, Lancia, Maserati and Ferrari). But Saab sales make a sorry comparison with Jaguar’s (which was in a worse plight when Ford bought it), Lotus was a failed venture and the Fiat connection remains to be proved.

VW, Europe’s largest car manufacturer, is quite another matter. To its Audi range it has added in short order Bugatti, Lamborghini, Bentley and, for the time being, Rolls Royce. Not content with this, it has cheekily mimicked Ford by parking its brands in a global luxury car division. But what adds real piquancy to the situation is VW’s appointment of Bernd Pischetsrieder as head of the new division.

Pischetsrieder, it will be recalled, was BMW’s executive chairman at the time of the Rover acquisition, and had been lying low since he was unceremoniously sacked by the Quandt family last year. His opposite number at Ford’s premier automotive group is none other than Pischetsrieder’s former number two, and sparring partner, Wolfgang Reitzle – who left BMW at the same time, in similar acrimonious circumstances.

Both were committed BMW ‘lifers’ and both must be impelled by a powerful personal agenda to preempt the other in grabbing the BMW prize. Of the two companies, analysts reckon that VW has the greater need to win this contest, but they are sceptical about Pischetsrieder being the man to pull it off. Reitzle, on the other hand, is said to have been popular with the Quandt family and left under less of a cloud. It should also be remembered that BMW sold Land Rover to Ford.

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