Down in the trenches, where the rubber meets the road, it remains to be seen what the mergers will mean for the traditional dealers, says John Porcelli, owner of Capital Lincoln Mercury in Chicago and a member of the Lincoln Mercury Brand Advisory Board.
"The (consolidation) clearly means savings for the manufacturer, and I own Ford stock, so that's a good thing," he says. "I try to look at it in a positive light and hope to God it will help us somewhere down the road. I look at what Ford has done for Jaguar. They've done a great job, but maybe at the expense of the other lines."
Sales numbers suggest the auto industry has been much kinder to the companies being parceled out than to the larger auto-makers doing the buying or their traditional divisions.
A Brandweek ana-lysis of Ward's Automotive Report figures from 1990 through 1999 show that while overall industry sales have increased at a 21.8% pace, automakers that have been buying up other carmakers have increased sales only 15% in the same period.
Meanwhile, units that have either been purchased or formed alliances have clearly benefited either from the investment or a favorable market, increasing sales 38% in the last decade. The traditional divisions at Ford Motor Co. and General Motors Corp., such as Ford, Lincoln Mercury, Chevrolet and Oldsmobile, have realized growth of only 8.2%.
Automakers like Toyota and Honda, which have resisted the urge to merge, have outpaced the overall market by dramatically expanding their product offerings, but trail the companies that have sold out.
Yet that doesn't mean that as the newly structured companies get comfortable they won't be able to come up with synergistic marketing that helps everyone sell more cars.
As a case in point, when African American film stars and directors gather in Acapulco this month for the fourth annual Acapulco Film Festival, the event will be co-sponsored by Ford Motor's Lincoln and Jaguar divisions.
Lincoln kicked off a party in California on March 29 and Jaguar had its own shindig in New York on April 4 to introduce the trend setting African-American film communities on both coasts to its products and then the divisions will meet for the big June party in Acapulco. Along the way, the luxury divisions will leverage the deal with print advertising.
Because Ford owns both divisions and has wrapped them into its new Premier Automotive Group, the automaker is now able to leverage the brands together where it make sense, says Deborah Wahl, Lincoln Mercury marketing comm-unication manager.
For many observers, it will take that kind of control to make auto mergers work, at least at the brand marketing level.
So while analysts suggest that GM succeeded in a $2.4 billion deal for 20% of Italy's Fiat only because it was willing to consider an alliance, the real synergies on the brand side of the business come only when one company assumes control.
So says Gordon Wangers, managing partner of AMCI, a niche marketer that specializes in helping companies identify and exploit their competitive adv-antages.
He adds, "I'm not sure I get that one. I definitely don't see any value in America where Fiat is known as 'Fix It Again Tony.'
"Maybe strategically it makes sense on the product side, but certainly not for marketing. Ford's strategy of buying them hook, line and sinker makes more sense than GM's equity stake approach. For better or worse, depending on the kind of job they do, the impact is more direct and comes a lot sooner."
Mr. Wahl, who also previously held a Mazda marketing job, says the Ford divisions frequently share ideas and look for ways to leverage their brands behind the scenes.
Lincoln is learning a lot from Volvo's customer relationship activities because the smaller Swedish automaker had to work harder to perfect its practices prior to being purchased by Ford.
Ford now controls Aston Martin, Jaguar and Volvo and Mazda. GM has complete ownership of Saab but only alliances with Isuzu, Fiat, Suzuki and Subaru, although it does have near control of Isuzu with a 49% stake. In Europe, GM owns Opel and the automaker is expected to create a global brand strategy with Chevrolet, Saab and Cadillac. Opel may play a role in that structure.
Most other deals go for control. While the Chrysler-Mercedes deal was billed as a merger, it's pretty clear now that Mercedes bought control of its U.S. rival.
The DaimlerChrysler/Mitsubishi link-up is expected to evolve into a similar power structure. Hyundai bought rival Kia last year. Renault bought a controlling stake in Nissan and Renault's hand picked COO Carlos Ghosn took over Nissan.
The deals are necessary for brands to survive and where GM has control, marketing benefits are beginning to emerge.
Saab was a big winner when GM took total control of the automaker this year because GM handed the new subsidiary the California portion of Davis Cup promotions, something Saab had no chance of locking up on its own.
GM's Opel division has the Davis Cup in Europe but doesn't sell cars in the U.S. so it made sense for Saab to take it on, says Sal Gatbonton, Saab sales promotion manager. Saab will get on-court exposure, its logo in Davis Cup ads and will offer test-drive incentives tied to the event, he said.
Even in alliances, there is room for cooperation, says Tom Cavanaugh, Isuzu executive manager of advertising communication.
GM has had a relationship with Isuzu since the 1970s when the Japanese company made Chevy compact pickups. In 1998, GM increased its share to 49%. This year, for the first time, Isuzu was able to buy its print advertising through GM's Media Works, says Mr. Cavanaugh.
"We were able to achieve incredible efficiencies. This opened up discount levels we could only dream about in the past," he says.
Smaller divisions that are folded into larger companies also will see huge advantages on the information technology and database side of their operations, says John Leary, vp-general marketing manager for Carlson Marketing Group, Troy, MI, which works for many of the automakers coordinating marketing activities.
"Everyone is moving hard to consolidate and focus their business to consumer and business to business operations," he says, adding that a merger might be the only way smaller companies can afford the information technology costs.
Marketers at small companies lucky enough to be snatched up by a cash-rich benefactor are well aware of the benefits.
"Ford brings us a scale we would never otherwise have," says Al Saltiel, Jaguar general marketing manager. "When we launched the S-Type (a new luxury sedan) it was our first time on prime time TV. We hadn't been able to do a campaign like that before."