Title: The DaimlerChrysler Mitsubishi merger: a study in failure

Authors: Jason Begley, Tom Donnelly

Addresses: Motor Industry Observatory, SURGE, Coventry University Business School, Coventry University, Priory St. Coventry CV1 5FB, UK. ' Motor Industry Observatory, SURGE, Coventry University Business School, Coventry University, Priory St. Coventry CV1 5FB, UK

Abstract: This article focuses on the DaimlerChrysler/Mitsubishi merger of 2000 and discusses the failed attempt by a European-American multinational firm to break into the Asian market, a region where previously it had an extremely limited presence. Having completed its 1998 merger with the US-based Chrysler Corporation, the newly formed DaimlerChrysler group turned its attention to the Asian market in 2000 in an attempt to become a truly global competitor. Partnership with the Japanese motor firm offered the possibility of economies of scale and scope, in particular in the sub-compact car market to enable DaimlerChrysler to become a full-scale producer. However, within four years the dream of large scale trans-national production was over. The failure to integrate with the Japanese company and the subsequent decision to cut Mitsubishi Motors adrift led to the dismissal of the DaimlerChrysler CEO Jurgen Schrempp. This paper will focus on outlining the motives behind the merger, why it failed, and why the Board of Daimler-Benz decided to end the relationship and extricate itself from Mitsubishi|s problems.

Keywords: globalisation mergers; consolidation; international markets; Jurgen Schrempp; demerger; market exit; merger failure; DaimlerChrysler; Mitsubishi; Asian market; automotive mergers; automobile industry; transnational production.

DOI: 10.1504/IJATM.2011.038120

International Journal of Automotive Technology and Management, 2011 Vol.11 No.1, pp.36 - 48

Published online: 13 Mar 2015 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article