As the Car Industry Sinks, New Buyers Emerge

As the world continues to grapple with its deepest recession in more than a generation, the global car industry is facing unprecedented turmoil unlike anything seen in many decades. Consumer demand is down as is production, with companies closing plants, laying off workers and considering alliances and outright sales that would have been unthinkable just a year earlier.

What will likely emerge out of all of this is that they'll be fewer brands, several mega mergers and a different landscape come 2012, the first full year that the current recession will probably be over. Let's take a look at some of the emerging and pending trends taking place in the world of cars:

Chrysler and Fiat - If the US government gives its approval, Chrysler and Fiat will begin a historic alliance. Chrysler will get several Fiat models to sell as Dodges and Chryslers while Fiat will gain access to the Chrysler distribution network to sell its Alfa Romeo line in the US and Canada. For its part Fiat gains a 35% stake in Chrysler.

General Motors Scales Back - GM will soon be disposing of several brands either through sale or discontinuation. Saab, Hummer and Saturn will all disappear and, although GM has been talking it up, Opel will probably stay put. Look for GM to declare bankruptcy but to emerge from it leaner and stronger than ever before.

Ford Sells Volvo - Chery Automotive, the Chinese car company, plans to make a bid for Volvo. Though Ford would like to recoup as much of the $6.45 billion it paid for the automaker years ago, they may have to settle for $5 billion. The Volvo acquisition will raise China's visibility immeasurably as a serious car manufacturing giant.

Mahindra to America - India's first automaker to seek a US presence will be Mahindra & Mahindra who has reached an agreement with Global Vehicles to sell a pickup truck stateside beginning later this year. Two more models will show up within the next two years, demonstrating that India is a legitimate manufacturer of passenger vehicles.

Brilliance to America - Chinese automaker Brilliance is putting together a US dealer network in hopes to gain access to the market with its fleet of pure electric cars. If all goes well, the first models will be available by early 2010, offering stiff competition in the most competitive car market in the world.

Other alliances are in the works including BMW-Mercedes as well as the likely consolidation of the Chinese car industry. Proton Motors in Malaysia will likely be bought out with further consolidation taking place around the world.

Things may be tough with the car industry right now, but improvements should begin to appear within the next year.