As I see it, the entrepreneurs who built the first (big) car companies (people like Henry Ford, William Durant) saw bigness as greatness-they reasoned that getting larger meant:
-economies of scale (fixed costs get spread over a larger output)
-clout with suppliers (better pricing on a 2 million piece order, vs. a 2000 pc. order)
It appears that “bigger is better” worked well , at least through the 1980’s-we saw the smaller auto firms (like Studebaker, Packard, Kaiser-Frazier, Hudson, etc.) get pushed out of the market.
But today, GM (formerly the world’s largets corporation) went bankrupt-perhaps it was so large that its bigness introduced its own inefficiencies?
The Japanese firms (Toyota, Nissan, Honda) are giants-and surely being big hasn’t hurt them.
Can you run a car company today (profitably) with less than 200,000 units/year produced?
Saab is a manufacturer facing this-and it looks (to me) that they won’t survive.
Well, I think an auto manufacturer today needs to be large and diversified, unless aiming for a really niche market.
The American auto manufacturers you mentioned went out of business (or merged) during the 1950s/1960s basically due to not having enough capital funds (or ability to float bonds) to keep up with technology and (more importantly at the time) update styling.
I believe GM suffered from bad management causing it’s problems, as was also the case of British Leyland - if properly management, GM wouldn’t have required a bailout, and potentially British Leyland would be still around, albiet privitized.
OK, Rolls Royce is a niche manufacturer (of about 1000 cars in 2009), but then again they have a profitable aircraft engine business to fall back on.
Good management and good financial backing is the key…which is true of almost any industry I guess.
Rolls-Royce Motor Cars is a subsidiary of BMW.
Rolls-Royce Group PLC, which makes aircraft engines, is a separate company.
no, it started with arrogance in the '70s. “Nobody will buy those pieces of Jap crap.” Then it was the half-ass response to people actually buying Japanese cars, like the Vega, and Pinto. Then it was blaming labor for quality problems. Then it was relying on profits from captive finance arms keeping automotive operations afloat. Then it all finally collapsed.
The decline of GM started in 1973.