The DaimlerChrysler Mitsubishi merger: a study in failure

Jason Begley and Tom Donnelly

International Journal of Automotive Technology and Management, 2011, vol. 11, issue 1, 36-48

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. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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