TOKYO — The term megasupplier has been in circulation for years in describing mammoth parts makers such as Robert Bosch, Continental, Magna and Denso. But the industry could soon be talking about "megamakers" — car manufacturers of more massive scale than ever before.
IHS Markit says the global auto industry is engaged in a new race for economies of scale that could usher in an era of car alliances with annual volumes in excess of 18 million vehicles. Leading the charge are Germany's Volkswagen AG, which is teaming with Ford, and Toyota Motor Corp., which has brought a group of smaller Japanese players under its umbrella.
Each of these car-making groups could be manufacturing more than 18 million vehicles by 2027, IHS Markit predicts. VW and Ford may hit 18.2 million, and the Toyota group could reach 18.1 million.
Finishing a not-so-distant third would be the Renault-Nissan-Mitsubishi alliance, churning out volume of 11.7 million vehicles, according to an IHS Markit outlook presented here Feb. 25.
"The race for scale seems to be entering a new, accelerated phase," said Mark Fulthorpe, director of global light-vehicle production forecasting at IHS Markit. "We are definitely seeing developments which will start to redefine the outlook for the industry as we go forward."
The latest example is the pending merger of Fiat Chrysler Automobiles with PSA Group. That tie-up could be making 8.4 million vehicles in 2027, just behind Hyundai Motor Group's 9.1 million and just ahead of the 7.8 million made by General Motors and its Chinese partner SAIC.
The envisioned super scale, at the top end at least, dwarfs maximum output still hovering below 11 million in 2019 for Toyota, VW and the Renault-Nissan-Mitsubishi alliance, IHS Markit said.
The key is leaning on partners in segments where they are stronger and pooling resources for next-generation technologies, such as electrification and autonomous driving.
"As this race for scale starts to develop," Fulthorpe said, "it's going to be more and more important for these kinds of players to find partners for future developments."
