If you look at the history of various industries, they usually have a crowded environment of competitors and then, over time, some drop out and some get bought out by others, and even a certain location or region ends up being the unofficial home for that industry. Just research how many automotive manufacturers existed in America 100 years ago and how Detroit evolved to be the Motor City. And now, as the world becomes more connected and more global, it is possible that the former juggernaut known as General Motors may become a corporation owned by a corporation. Some analysts feel Toyota may be that company.
By merging Toyota and GM, you’d have two of the three largest auto companies in the world as one. Sure, it may sound monopolistic, but the two would only have 30 percent of the American market − much less than GM’s peak 45+ years ago. And in Europe, the penetration would be even less. What about China? A fresh, robust market with many players, so a Toyota/GM conglomerate may not be as huge as it appears.
24/7 Wall St. entertains this idea that the world’s largest car companies of the future would be created by mergers and acquisitions. They point out Toyota’s market cap of $180 billion (compared to GM’s $46 billion) bolsters their case. Combine that with each company’s international manufacturing and dealer operations and you have potential for considerable cost savings. “There is room to create one guy which will be bigger,” according to Fiat Chrysler Automobiles CEO Sergio Marchionne, and knowing the history of business, it’s entirely possible GM may be on the receiving end.