After a decade of acquisitions of and mergers with European luxury brands (see DaimlerChrysler, Ford and Volvo, GM and Saab), American automakers are refocusing their energies on their core brands and the domestic market.
In the latest news, Ford has decided to entertain offers for its Volvo division, the former centerpiece in its Premier Automotive Group, which also included British brands Land Rover, Jaguar, and Aston-Martin. The group has lost money in four of the past five years, dragging down Ford’s profits.
Unable to make inroads in the luxury car market, these acquisitions were designed to help the Big Three auto makers expand their reach. However, the new models caused the brands to lose some of their luxury cache. After the purchase of Jaguar, purists said that the new models looked more like a Ford Taurus than a classic British car.
The companies also didn’t anticipate the threats coming from Toyota and Honda. With its focus on safety features, Honda is putting its cars in direct competition with Volvo — and selling them for thousands of dollars less.
If implemented correctly, this new direction should help Chrysler, GM, and Ford regain ground in their own backyard, but will it be enough? US automakers still need to address serious issues with manufacturing in order to truly be competitive, especially if they hope to take advantage of the weak dollar to bump up exports.
