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Emerging Alliances Point to Further Auto Industry Consolidation

March 28, 2019 by admin

What a month! March 2019 may go down as a pivotal time in automotive history as auto industry consolidation talk strengthens anew.

The news is coming from all corners of the globe as multiple players talk, while others forge alliances. Consolidation certainly isn’t anything new, but the future absolutely points to a host of mergers and alliances taking shape.

2019 Ford Ranger — Volkswagen and Ford are forging a pact that might lead to a Ranger-based pickup truck for VW.

Ford, Volkswagen Tie One On

Heading the alliance news this month is a not-yet-signed agreement between Ford and Volkswagen. According to Reuters, the two automotive giants have been in talks for months and appear ready to sign a pact.

That agreement may involve Volkswagen purchasing a stake in Argo AI, which is Ford’s artificial intelligence company. Argo AI represents the blue oval’s autonomous vehicle and artificial intelligence aspirations, a company launched in 2016. Volkswagen doesn’t have an equivalent business, thus investing in Ford’s venture would give it instant access to AI.

At the same time, Ford appears ready to supply Volkswagen with a pickup truck. The German automaker doesn’t have a model for the American market, though its car-based Amarok is sold in multiple markets. Although the type of truck has not yet been identified, we believe a model closely based on the midsize Ford Ranger pickup truck seems likely.

Daimler, Geely Go Beyond Ride-Hailing

Daimler and Geely are expected to soon sign an agreement which would allow the Chinese automaker to purchase a 50-percent stake in Daimler’s Smart small-car brand. Smart has been languishing for years and talk of the brand’s demise emerged just this week.

But Smart may find new life yet as an electric car manufacturer with the Chinese market its main source. The Financial Times reports that an announcement will be confirmed at the Shanghai Auto Show in April.

The two manufacturers are no strangers, although Daimler’s Mercedes-Benz and Geely’s Volvo brands are direct competitors. In 2018, the two companies joined forces to form a China-based ride-hailing company reports CNN.

A Suitor for FCA

The late Fiat Chrysler executive Sergio Marchionne fashioned one of the most unlikely alliances earlier this decade as he married a pair of Italian and American automakers, but he was never satisfied that it would last apart from further consolidation.

Indeed, Marchionne was one of the earlier proponents of global consolidation, noting as far back as in 2009 that there would be “six survivors in the global volume sector.” Marchionne stated his viewpoint during the midst of a worldwide downturn in auto sales that nearly sunk Chrysler and GM and put other manufacturers in jeopardy.

See Also — Auto Industry Buzzword: Collaboration

Marchionne passed away in 2018, but the spirit of FCA consolidation lives on. Notably, in the past few weeks, we have heard that both France’s PSA Groupe (Peugeot, Citroën, Opel, et al) and the Renault-Nissan-Mitsubishi alliance seems interested in acquiring FCA. Jeep and Ram are FCA’s two strongest and most profitable brands and are the top prizes here. At the same time, a merger or an alliance might help FCA improve its performance in Asia, especially in China where it is particularly weak.

But these two possible companies/alliances aren’t the only ones interested in FCA. Several years back the Volkswagen Group targeted Fiat Chrysler, but its overtures were rebuffed. More recently, Hyundai expressed its own interest in the company, but it wasn’t planning to make a move until after FCA’s share values fell.

Limited Agreement Auto Trends

While further consolidation seems likely, more limited agreements between competing manufacturers will continue to emerge.

One of the results of this kind of agreement brought the Toyota Supra back to the market. The Supra’s return comes thanks to an agreement between Toyota and BMW, as the former used the latter’s Z4 platform to build its sports car. Toyota has also worked with Subaru to produce its 86 sports car, and may continue that pact for a new generation model.

Toyota, thanks to its size and deep pockets, may yet avoid the entire alliance and consolidation trend. With stakes in Daihatsu, Suzuki, Subaru, and Mazda, the company can turn to its partners to supply vehicles it doesn’t have. Further, it may work with its associated companies to spread development costs as needed without ceding control.

May Sales Tumble, But the End is Not Near

June 2, 2016 by admin Leave a Comment

Sales setback is temporary with some surprises thrown in.

US auto sales fell by 6.1 percent last month, but the end is hardly near. Instead, the industry counted two fewer selling days for May, accounting for much of the loss for the month.

2015 Ford F-150

Ford F-150 sales rose in by 9 percent in May.

US Manufacturers: Only FCA Rises

As expected, Fiat Chrysler sales rose by 1.1 percent, largely on the strength of its Chrysler Town & Country and Dodge Grand Caravan minivan models. Jeep was another positive spot and was the only Fiat Chrysler brand other than Alfa Romeo to post gains for the month.

Some manufacturers such as GM posted larger losses than expected. GM sales fell by 18 percent, while Ford’s drop of 6.1 percent matched the industry’s average. GM blamed much of its decline to a reduction in fleet sales.

Had Ford maintained its sales from last month, it would have topped GM. Instead, it closed the gap to about 5,700 units, while remaining ahead of Toyota. The bright spot for Ford was once again its line of F-Series trucks. In May, Ford sold 67,412 units, up 9 percent for the month.

Hyundai Records a Strong May

Every major manufacturer outside of FCA posted losses last month, but there was a noticeable exception from the Hyundai-Kia Automotive Group — Hyundai sales rose by a robust 11.6 percent; Kia sales edged up by 0.8 percent.

“Our refreshed CUV lineup continues to exhibit strength in this market,” said Derrick Hatami, vice president of national sales for Hyundai Motor America.

2016 Subaru Forester

Forester and Outback sales continue to pace Subaru.

As for the Big 3 Japanese manufacturers, Toyota sales fell by 9.6 percent, Nissan dipped by 1 percent, and Honda sales were off by 4.8 percent. But there were some bright spots here too — Scion sales rose by 38.6 percent as Toyota continues to wind down its youth brand. Infiniti sales were also up, climbing by 3.4 percent.

BMW Group sales fell by 8.7 percent, Daimler was off by 1.9 percent, while Audi sales rose by 1.6 percent. Volkswagen Group sales fell by 9.5 percent, dragged down by Volkswagen’s 17.2 percent plunge.

Jaguar Propels JLR

Jaguar, with two new products to offer, enjoyed a 79.7 percent increase for the month. Meanwhile, Land Rover sales fell by 8 percent. Thus, JLR sales rose by 8 percent based on Jaguar’s strong month.

“We are very pleased that through five months of the year, we have increased our business for both Jaguar and Land Rover brands,” said Joe Eberhardt, President and CEO, Jaguar Land Rover, North America, LLC. “The Land Rover brand continues its momentum from a record setting 2015, and Jaguar has taken off with the expansion of the Jaguar brand into two dynamic new segments with the Jaguar XE and F-PACE which are now on sale.”

Subaru Breaks a Record…Again

While FCA now has 74 consecutive months of month-over-month gains to its credit, Subaru is not too far behind with a 54-month streak of its own in place. Last month, Subaru had its best May ever, with sales topping 50,000 units. Its Forester and Outback models helped this niche automaker realize a 1.1 percent gain for the month.

And not to be overlooked is Volvo. The Swedish automaker is enjoying a strong rebound this year, largely based on its all-new XC90 crossover utility vehicle. Volvo sales rose by 10.2 percent in May.

“Our refreshed CUV lineup continues to exhibit strength in this market,” said Derrick Hatami, vice president of national sales for Hyundai Motor America.

Crossover sales, including this Santa Fe, lifted Hyundai sales.

“With 10 percent growth for May while the overall industry is down, and now eleven months of double digit sales growth, it is a true testament to the transformation of Volvo in the US,” said Lex Kerssemakers, President and CEO, Volvo Car USA.

Mazda sales fell by 4.3 percent, Mitsubishi sales were off by 5.7 percent, and Tesla sales rose an estimated 55.3 percent according to Autodata Corp.

SAAR Still Strong

Despite the sales drop, the all-important SAAR remains strong. SAAR or the Seasonally Adjusted Annual Rate takes into account fluctuations, such as a sales calendar with two fewer selling days. For May, the SAAR remains above 17 million units.

Sales data per Automotive News and the car manufacturers.

Photos copyright Auto Trends Magazine.

Renault-Nissan, Daimler Connect in Mexico

July 30, 2015 by admin Leave a Comment

You can’t buy a new Renault in the United States, but Nissan, Infiniti, Mercedes-Benz and Smart brand models are available.

Nissan (Nissan and Infiniti) and Daimler (Mercedes-Benz and Smart) each have a strong presence in North America on their own. Nevertheless, the two competitors are moving forward with an alliance that will produce new models for the Infiniti and Mercedes-Benz marques by means of a manufacturing plant currently under construction in Aguascalientes, Mexico.

Leaders of the COMPAS consortium are overseeing the Mexican alliance.

COMPAS: In the Right Direction

In 2010, Daimler and Renault-Nissan forged an alliance —COMPAS (Cooperation Manufacturing Plant Aguascalientes) — in an effort to build all-new, next generation compact models for the Mercedes-Benz and Infiniti brands. This week, the 50:50 joint venture was officially launched, with Daimler and Nissan each contributing $500 million to build a $1 billion manufacturing plant. That plant will be constructed alongside an existing Nissan facility in Aguascalientes.

The new manufactory is expected to come on line in 2017 and employ as many as 3,600 people directly by 2020 with room to grow as needed. The first Infiniti-based model will roll out in 2017 followed by the first Mercedes-Benz model in 2018.

New, Entry-Level Models From Mexico

Neither manufacturer has specified what models will be produced, but an Infiniti Q20 or Q30 model is reportedly in the offing. Mercedes-Benz may utilize the facility to begin producing its next generation CLA-Class model line.

COMPAS is overseen by a six-member board composed of three members from each manufacturer.

Armando Avila, Manufacturing VP, Nissan Mexico; Carlos Servin, Finance VP, Nissan North America; and Takehiro Terai, Total Customer Satisfaction VP, Nissan North America, are representing Nissan’s interests. Daimler is represented by Michael Göbel, Head of Production Compact Cars, Mercedes-Benz Cars; Axel Harries, Head of Quality Management, Mercedes-Benz Cars; and Christian Schulz, Head of Controlling, Mercedes-Benz Cars Operations.

“COMPAS is an outstanding example of the global reach of the Renault-Nissan Alliance and Daimler cooperation. Together we are combining the manufacturing expertise of Nissan and Daimler in one production plant in Mexico for the production of next-generation premium compact cars,” said COMPAS CEO Kurosawa. “Aguascalientes was selected as the location for this new plant thanks to the state’s well-established supplier base and Nissan’s track record in highly efficient manufacturing in Mexico for more than three decades,” he added.

Although the two manufacturers will build new models based on the same platform, each brand will inscribe their unique countenance on the vehicles sporting their names. The bones may be similar, but everything else about these models will be different.

Mexico is not the only facility that will build the new models. The companies will collaborate elsewhere, harnessing plants in Europe and China as well.

An Alliance of Convenience

The Renault-Nissan and Daimler partnership falls short of a full-blown alliance whereby each manufacturer takes a share in the other. Nevertheless, it demonstrates that automotive manufacturers can forge confederations to accomplish specific tasks. With both sides contributing to the alliance, development and production costs are shared, leading to greater economies of scale.

Nissan and Daimler Sales

US sales for Nissan are up 4.2 percent through June and are up by 8.3 percent for Infiniti. Mercedes-Benz sales are up 9.4 percent year to date, but Smart sales are down 22 percent. However, the 2016 Smart ForTwo is all new, arrives this fall, and should help bolster Daimler’s niche A-segment brand.

Sales for the entire US market are up 4.4 percent through June 2015 and are on pace to top 17 million units. Softening demand for cars comes as consumers snap up utility vehicles and pickup trucks in greater numbers.

Maybach Returns in the Guise of a Mercedes S-Class

January 21, 2015 by admin Leave a Comment

This April, Maybach makes its return…as a Mercedes.

Maybach is the quintessential Mercedes-Benz brand, a Daimler marque founded in 1909. The brand disappeared for five decades following the cessation of World War II, then enjoyed a 15-year revival as a collection of luxuriant models were presented. In 2012, Daimler canceled the brand, citing declining sales.

Well, Maybach’s demise has now led to its resurrection. Indeed, come the 2016 model year, the pinnacle of Daimler brands will reappear, even if that restoration comes in the guise of a sub-brand to Mercedes-Benz.

2016 Mercedes-Maybach S600

Last week, Daimler announced pricing for what will officially be known as the Mercedes-Maybach S600, with the Benz name nowhere to be found. The new model will occupy the top of the S600 range, carry a sticker price of $189,350, and go on sale in April.

The 2016 Mercedes-Maybach S600 made its world premiere at auto shows in Guangzhou and Los Angeles, a fitting joint introduction as the sedan should find a sufficient source of customers in China as well as in the United States.

Spacious, Sumptuous and Chic

Exclusivity is the operative word for the Mercedes-Maybach, what will blend the excellence of the S-Class with the singularity of the Maybach. The differences between models may seem subtle at first, but is best evidenced by looking at its profile. There, the rear doors have been shortened by 2.6 inches, to give it the appearance of a seamless fusion into the sedan’s overall architecture.

Those doors are absent the triangular window found in other models. Instead, it has been relocated to the rear pillar. Mercedes says that the modification was accomplished with an eye toward increasing privacy as well as exclusivity. Further, the stylized Maybach Manufaktur logo – representing a double M inside of an arched triangle – bedecks the rear pillars on both sides.

In the cabin, the Maybach edition provides passengers with what is described as “lounge-style, modern luxury.” The designers outfitted this sedan with a purpose, bringing in a host of refined materials and stylish controls, advancing an atmosphere that is at once sensual as it is opulent.

To bolster the sedan’s exclusivity, the front center armrests are covered with choice Nappa leather or an available semi-aniline upholstery feature embossed with Maybach crests. On the dashboard sits an analog clock with an IWC design.

Additional embellishments include hand-stitched door trim, wood/chrome and leather trim, ambient lighting on the side of the armrest, and additional rear space — gained by extending the sedan’s wheelbase by 7.9 inches. For the customer’s maximum acoustic pleasure, a Burmester® High-End 3D surround sound system is included.

Biturbo Power Extraordinaire

Under the hood, the Maybach is powered by a 6-liter, V-12 Biturbo gasoline engine making 523 horsepower at 4,900 to 5,300 rpm and 612 foot-pounds of torque at 1,900 to 4,000 rpm. That beefy engine is paired with a seven-speed automatic transmission. The sedan has an estimated 0 to 60 mph time of exactly five seconds with a top speed of 155 mph.

The Maybach edition will have all the features of the S-Class and then some. A standard air-balance package provides fragrancing, ionization and improved filtration. This model also comes equipped with a pair of prime, silver-plated champagne flutes made for the onboard bar by Robbe & Berking, silversmiths in Flensburg, Germany.

Other standard equipment will include: a panoramic sliding sunroof, small roller sun blinds for the triangular windows, electric roller sun blinds in the rear door, a business console and leather options. A range of proprietary finishes will also be offered.

S-Class, Halo Edition

Few of us can afford the Mercedes-Benz S-Class or the top-of-the-range Maybach, what will raise the model line’s exclusivity further. Therefore, annual sales will probably number in the low hundreds, effectively maintaining this halo model’s scarcity.

See Also —

Photo courtesy of Mercedes-Benz.

Will Fiat Chrysler Rescue Mitsubishi?

September 23, 2014 by admin 1 Comment

Mitsubishi will supply pickup trucks to Fiat.

Mitsubishi I200 Pickup Truck — The next generation of this Mitsubishi L200 will also be sold by Fiat.

Fiat and Mitsubishi signed a “memorandum of understanding” or MOU last week, whereby the Japanese automotive manufacturer will supply 170,000 small pickup trucks to Fiat for six years reports Bloomberg. The Mitsubishi L200 is a midsize truck, one that will be sold by Fiat through its commercial vehicle arm in the Americas as well as in Europe. The US, however, is not expected to see the truck — at least not through this deal.

Mitsubishi: Back to the 1970s

The Fiat-Mitsubishi MOU once again involves Chrysler — although indirectly — a company that collaborated with Mitsubishi for decades, starting in the early 1970s when Chrysler purchased a 15 percent stake in the Japanese company. The Mitsubishi Galant got the alliance going when it was sold in America as the Dodge Colt, a full decade before Mitsubishi began selling vehicles stateside under its own banner. The two automakers continued with their relationship, later launching a joint venture in Illinois called Diamond-Star Motors.

Chrysler eventually sold its share of Diamond-Star to Mitsubishi and decreased its stake in the company, but continued to supply engines, transmissions and other parts well into the new century. After Daimler merged with Chrysler to form DaimlerChrysler (DCX), the new company took a 34 percent stake in Mitsubishi in a bid to establish a truly global presence.

See Also — Up Next: Ford-Volkswagen Tie-up?

Mergers, Acquisitions and Divestures

DCX gradually sold off its share in Mitsubishi, ending the relationship two years before Daimler and Chrysler split. During that time Mitsubishi forged other alliances, including with PSA Peugeot Citroen, something it maintains to this day. Mitsubishi is also in collaboration with Renault and has worked with Volkswagen and Proton.

Fiat and Chrysler are expected to complete their merger by the end of the year with the newly-minted Fiat Chrysler Automobiles, N.V. (FCA) establishing its global headquarters in London. Feeling the financial pinch from the pending merger, FCA will not have to devote its scant resources to develop a new truck, relying on Mitsubishi to supply fresh product instead.

A Ram Dakota Replacement?

The agreement could pave the way for the truck to be sold in North America, filling an important hole in the Ram lineup, one that opened when the Dakota was discontinued following the 2011 model year. With Chevrolet and GMC returning to the segment this year in the Colorado and Canyon respectively, Chrysler could follow suit if Mitsubishi amends its MOU to add more trucks and send an additional supply to America.

An amended agreement might also help Mitsubishi gain new found traction in a market where it is averaging fewer than 6,000 sales per month. Mitsubishi sales had been on a downward spiral until this year and are now up 29 percent through August. Although a direct rescue of Mitsubishi by Fiat Chrysler isn’t likely, supplying much-needed product will aid the fortunes of all concerned.

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Photo courtesy of Mitsubishi.

Slipping Sept. 2013 Auto Sales: What’s Up With That?

October 3, 2013 by admin 1 Comment

US auto sales dropped by 4.2 percent for Sept. 2013, based in part on two fewer selling days than in Sept. 2012. Still, the month-over-month sales drop was the first the industry has seen in 27 months, perhaps demonstrating how fragile the economy is. Notably, the automakers released their figures on the same day that the federal government launched its Health Care Marketplace, a system full of glitches and problems that kept millions of Americans from signing up.

down arrow — Going down: auto sales trend lower for Sept.

Obamacare and a Government Shutdown

And please remember that you have heard this here: Obamacare will present a huge drain on the economy and it will affect auto sales beginning in 2014. As Americans wake up to the reality of higher medical costs and fines for not participating in an unwieldy and untenable health care system, they will also see that their funds are being squeezed. Squeezed consumers delay their purchases especially for big ticket items such as cars.

Also weighing on most everyone’s mind is the federal government shutdown. Ford Sales Analyst, Erich Merkle, expressed confidence that a fix would be found stating, “We remain optimistic that our Government leaders will come together and they’ll ultimately support a solution that works for everyone.” That optimism could change if consumer confidence takes a hit.

GM Remains On Top, Just Barely

General Motors retained its position as top selling automaker in the US for the month, but barely. GM sold 187,195 units to Ford’s 184,452, with Toyota, Honda and Nissan falling as well. Chrysler sales were up a modest 0.7 percent, continuing a string of 42 consecutive months of increasing sales. Year-to-date sales still has GM on top followed by Ford, Toyota, Chrysler, Honda and Nissan. Subaru and Porsche posted double-digit gains for the month; BMW sales rose by 8.4 percent.

GMC Sierra Denali

Ford and Chrysler both enjoyed robust sales of its large pickup trucks. For Ford, the automaker enjoyed its fifth consecutive month of F-150s sales topping 60,000 units for a 10 percent gain that positively impacted its monthly figures. On the Lincoln side of the house, the all-new MKZ sedan is seeing some traction with sales up by 12 percent.

Ram sales of 28,145 units represented an 8 percent increase over Sept. 2012, effectively carrying the Chrysler Group into the positive column. Strong Dart, Challenger and Charger sales paced Dodge, but Jeep sales fell 5 percent as dealers await the 2014 Jeep Cherokee held up because of production delays attributed to transmission problems.

GM’s drop may be attributed largely to a dip in its large pickup truck sales, blamed in part to the lack of availability for some models. The Chevrolet Silverado and GMC Sierra are all-new for 2014, while the Ford F-150 is a model year away from its next generation change. Ford slapped heavy incentives on the hoods of its trucks too, with discounts of $4,000 or more for 2013 models. GM just announced that it was placing a $4,500 cash incentive on its remaining 2013 Chevrolet Silverado inventory.

Toyota, Honda and Nissan Fall

Toyota sales fell by 4.2 percent, but the automaker noted that its day-over-day sales increased for the month. It also reiterated what others have said: that two fewer selling days detracted from what was otherwise a strong September. The Toyota Camry led in sales, with nearly 32,000 units sold followed by the all-new Corolla with sales topping 23,000 units. On the Lexus side of the house, the all-new 2014 Lexus ISrecorded a 42 percent sales increase.

Lexus IS sales surged by 42 percent in Sept.

Honda’s 9.9 percent sales drop cannot be attributed solely to two fewer selling days. Accord sales were up 13 percent to over 25,000 units sold and, surprisingly, sales of the Honda Ridgeline truck climbed for the seventh consecutive month. Sales of the Honda Odyssey and Crosstour fell a combined 40 percent and sales of select Acura models also dropped significantly.

Nissan sales slipped by 5.5 percent with its Maxima, Altima and Sentra models each losing market share. Demand for its Frontier pickup truck increased by 7 percent, while Versa sales increased by more than 9 percent on the strength of its new Note hatchback. Infiniti sales dropped by 4.3 percent with the all-new Q50 presenting a bright spot as more than 4,800 units have been sold since the vehicle became available in early August.

Like its competing manufacturers, Nissan was quick to look for a silver lining in its sales figures. “September was a unique month with fewer selling days than the prior year with the Labor Day weekend falling into August sales reporting for the first time in several years. While this skewed year-to-year comparisons we are optimistic that strong auto sales will continue into the fourth quarter,” stated Fred Diaz, divisional president, Sales and Marketing, Service and Parts, Nissan U.S.A.

Subaru’s auto sales continue to outpace the industry.

Auto Sales: Best of the Rest

The rest of the auto industry results offered a mixed bag, but generally provided a blend of slightly falling and rapidly declining sales. Hyundai sales were down by 8.2 percent while its Korean cousin saw its sales plunge by 21 percent. Still, Hyundai managed to record its second best Sept. ever. Kia sales fell across the board as the automaker awaited the introduction of seven new or updated models over the coming months. It sold 926 units of its all-new and premium Cadenza sedan, perhaps the brightest light in its current line up.

BMW continues to put some distance between itself and Daimler although both companies recorded a sales increase for the month. Sales of Mitsubishi, Mazda, Volkswagen and Volvo fell while Jaguar Land Rover joined Subaru and Porsche in posting gains for Sept.

Daimler, Nissan and Ford Tie One On

January 30, 2013 by admin 1 Comment

Fuel cell partnership to yield vehicles from each company.

Mercedes-Benz F-Cell — The Mercedes-Benz B-Class F-Cell FCEV.

The move to deeper and more significant collaboration between global automakers took yet another turn this week when Daimler AG, Nissan Motor Co., Ltd., and the Ford Motor Company signed a three-way agreement to jointly develop a common fuel cell system. The historic accord, announced on Monday, is expected to yield the first mass-produced fuel cell electric vehicles from each manufacturer as early as 2017.

In a joint press statement, the three companies stated that the collaboration will significantly reduce investment costs as well as help define global specifications and component standards. The companies also had suppliers and policy makers in mind with an eye toward encouraging the development of a global hydrogen infrastructure.

Fuel Cell Experience

The partner companies each bring FCEV experience to the table. Daimler has been working on the technology since 1994 and has made 180 patent applications to date. A small number of Mercedes-Benz B-Class F-CELL MPVs have been on the market since 2009.

In October 2011, Nissan introduced its next generation fuel cell stack, enabling it to increase power density by 2.5 times over the 2005 mode. That stack also reduced the amount of platinum used by 75 percent and the stacks cost by 85 percent.

The Ford Motor Company developed its first research prototype FCEV in 1999 and rolled out a demonstration fleet of vehicles in 2005 based on the Ford Focus. From 2005 to 2009, Ford participated in a technology demonstration program in the United States as well as in similar programs in Canada and in Europe, with 30 Ford Focus FCEVs used.

How It Works

Toyota Hydrogen Fueling Station — With Toyota backing, a hydrogen fueling station is in operation in Torrance, Calif.

FCEVs are powered by an electric motor, much as electric vehicles such as the Nissan LEAF, CODA Sedan and Tesla S are also powered by electricity. Highly compressed and pressurized hydrogen is kept in a storage tank with a fuel cell stack used to convert hydrogen gas and oxygen into electricity. A power control unit governs the flow of electricity to the electric motor. A high-output battery stores energy made from regenerative braking and also provides additional power to the electric motor.

Lacking at the moment is a comprehensive and national hydrogen fueling station network. As of publication there are only 10 public stations available, nine are on the west coast. Water vapor and heat are the lone byproducts of FCEVs.

Further Collaboration Possible

The three companies will share in the engineering work for both the fuel cell stack and the fuel cell system at several yet to be identified locations around the world. Additional collaboration on other FCEV components may also flow from the agreement.

As for working in concert with rival companies, Raj Nair, Fords group vice president, Global Product Development, may have summed it up best when he said, We will all benefit from this relationship as the resulting solution will be better than any one company working alone.” Look for that sort of reasoning to be applied to every strategic business relationship currently being weighed elsewhere across the auto industry.