Nissan CEO: Auto Industry Embracing 'Modern Consolidation'

Nissan's chief executive believes that consolidation in the auto industry is already underway — but not in the way envisioned by his Fiat Chrysler counterpart.

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Nissan's chief executive believes that consolidation in the auto industry is already underway — but not in the way envisioned by his Fiat Chrysler counterpart.

"A lot of people think consolidation means A buys B or B absorbs C," Carlos Ghosn told an auto industry conference on Tuesday, according to the Detroit Free Press. "But we have been partnering with Daimler AG for 5 years."

Fiat Chrysler CEO Sergio Marchionne has long maintained that auto companies should join forces in order to share the rising costs of product development in the industry -- particularly for engines or other parts that don't matter to most car buyers.

He floated a merger between his own company and General Motors earlier this year, which GM's CEO subsequently dismissed.

But Ghosn, who heads the alliance between Nissan and French automaker Renault, said that cooperation between companies already allows automakers to maintain their independence while taking advantage of economies of scale.

Ghosn said that Renault-Nissan launched 14 projects to date with the parent of Mercedes-Benz. The companies are sharing engine development and technology, and they will also jointly operate a new plant in Mexico that will produce Mercedes-Benz and Infiniti compact models.

Ghosn also said he believes that the pattern will continue.

"This is consolidation, but this is very modern consolidation where you don’t have to choose between freedom and scale," Ghosn said.

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