Remember John Krafcik? Yea, he’s the former CEO of Hyundai Motor America and is currently the President of TrueCar. And recently, in an interview with Bloomberg, Krafcik shared his outlook on the possible idea of the Volkswagen Group merging with Fiat-Chrysler Automobiles. And that would be utterly insane.
Consider this: Volkswagen Group’s portfolio already consists of the obvious, Volkswagen, then Audi, Bentley, Bugatti, Lamborghini, Porsche, SEAT, Skoda and Volkswagen Commercial Vehicles. Fiat-Chrysler is responsible for Alfa Romeo, Chrysler, Dodge, Ferrari, Jeep, Maserati, and Ram. For the two to merge together would make for one insanely huge oligopoly. But Krafcik says it could be “highly profitable.”
He goes on to say that “it makes so much sense. You get a pretty interesting hypothetical company that covers all those bases really well,” said Krafcik. Now, this seems like an interesting idea when thought of in its basic forms, but in reality, history indicates that large automotive operations don’t exactly end very well, or in fact, market consolidation in general just doesn’t work with companies of such large scale. Examples include the airline and banking industries, and even the automobile industry.
Examples in the auto industry include British Leyland and even General Motors–ask them how managing too many brands under one company worked out for them.
All in all, Krafcik seemed like a smart individual who really helped turn around major brands like Hyundai, but it seems his intelligence is a little short sighted with a claim like, Volkswagen and FCA merging could create something awesome.
What do you think? Let us know in the comments.