What lies beneath.....

Mergers, partnerships and strategic alliances have been with us since the birth of the first business venture. Companies have always seen the benefits of acquiring their competition in the form of a merger or creating a strategic partnership.
Carmakers throughout history have merged, spilt and in many cases sold parts of their business to the highest bidder. Lines that were originally drawn in the sand by carmakers between them and their competition, no longer exist. Carmakers everywhere are reaping the benefits of economies of scale, working alongside their competition, they can exchange ideas and allow their products to be used in other carmakers vehicles.
A classic example would be the recent story of BMW's engines finding a home in Saab vehicles. Saab, which had recently been sold off, no longer had protective umbrella of General Motors. So in what would be considered a daring move approached another premium carmaker for the use of their engines.
The use other carmakers components; is common practice within the industry, carmakers have even gone to the extent of building an entire car within these partnerships. Citroen, Peugeot and Toyota on face value would be recognised as bitter rivals. But on closer inspection have worked together to produce a car. The cheek of it was that each manufacturer released the same car to the buying public, but only changed the badges and a few design details to distinguish the cars from each other.
Another common practice is building a component with the help of other carmakers, the turbo-charged engine found in the Citroen DS3 racing and the Mini Copper S, was built within a partnership between BMW and PSA (Peugeot Citroen). This engine has found a home in several vehicles that both companies produce.
However, the most common practice is carmakers to have several brands under their control; the best example would be Volkswagen. In a scene reminiscent of Chronos devouring his children, Volkswagen has bought various companies within the industry and used them increase its vast market share across the globe. The brilliance of their plan; is that many of the cars that the Volkswagen group release, share platforms, engines and interior trim. The only bespoke thing about them is the car shell.

So Daimler (Mercedes) and Renault-Nissans recent announcement about their strategic partnership came as no surprise. The European Union's stranglehold over legislation, has had many carmakers deciding that to remain in business, working with the enemy isn't such a bad scenario. Especially with the demand for electric cars gathering speed, the technology to mass produce electric cars has hit a snag. The obstacle is both the cost to develop and to sell the cars at an affordable price. So with odds stacked against them, they created a partnership that would see them benefit from reduced research and development costs, which would allow them, to reduce the price of their electric vehicles. Electric technology is not the only beneficiary, both companies can pool in their vast knowledge of vehicle production. In Mercedes and Renault-Nissan's case, Mercedes can offer them platforms and engines, which would be to costly to develop and Renault-Nissan can do them same. Thus cost to engineer an entire new car is reduced dramatically.
Though it could be seen as a win-win situation, they has been many cases of companies falling into bankruptcy because of a merger. Mercedes were brought to brink of collapse, after their colossal mistake of merging with Chrysler. They had made decision with intent of using Chrysler as a doorway into the U.S market. But due to Chrysler's dismal performance and inferior products, Mercedes was forced to abandon the merger.
The decision to unite under the banner of cooperation, is now a common occurrence; within an industry that prided itself on individuality. So next time you pay a premium for any of premium carmakers, remember it might be budget brand that you are buying.