Daimler Chrysler

The DaimlerChrysler Merger

Okşan Doğan M. Can İncekara Öykü Alanbay Ertan Küçükoğlu

Introduction

The merger of Chrysler Corporation and Daimler Benz involved the creation of a truly global corporation by combining two organizations of roughly the same size and in the same industry, but with two very diverse cultures. This presentation will try to explain the driving factors of merger and the keys to post-merger success.

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Industrial Analysis

The world’s largest manufacturing industry The most global one High fixed-costs High entry barriers Indusrty shaping breakpoints

Fuel-efficient cars with good price/performance ratios from Japanese Arrival of “lean manufacturing systems” and optimization of operations The global drive for rationalization led to overcapacity and decreasing price levels Overcapacity led to consolidation in the industry

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Market Analysis

The world population has doubled The number of cars on the road increased tenfold North America, Western Europe and Japan accounted for %75 of sales Traditional markets in industrialized countries saturated Growth expected in developing countries ( Asia and Latin America ) Large idle capacity, currency volatility , high inflation and competetive pressure creates difficulties

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Market Analysis

Number of available models increased considerably Many car producers switched to platform design Customers became more demanding at no extra costs Powerful features needed to be included in the base package Few profitable market niches exists; light trucks

Pickup trucks - Ford as market leader Multipurpose vehicles ( MPVs) - invented by Chrysler Sport Utility vehicles - Fastest growing segment in U.S Minicars - Mailnly popular in Europe

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The Worldwide Market for Cars

(in 000s of Units)

60 50 40 30 20 10 0 1993 1994 1995 1996 1997 1998 1999 2000 Cars Com.Vehicles Total

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Trends in the industry

Overcapacity

Closing of plants, decreasing number of producers,...