What has been the rationale for the large, cross-border mergers, acquisitions and alliances that have taken place in the world motor industry in recent years? Should Honda be looking for a merger partner?
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b) What has been the rationale for the large, cross-border mergers, acquisitions and alliances that have taken place in the world motor industry in recent years? Should Honda be looking for a merger partner? The turmoil and uncertainty in the motor industry have left many wondering when a shakeout can be expected. And to prepare for this shakeout, many automakers had toughened themselves up through a series of mergers, acquisitions and alliances (M&As) in recent years. However, as the expected shakeout unfolds, these supposedly more 'prepared' automakers have ironically become the most vulnerable victims. So, I think it is worthwhile to re-examine the rationale behind these M&As before deciding whether Honda should also be looking for a merger partner. This most common type of M&As in the motor industry is the Overcapacity M&A. In recent years, the demand growth for motors in developed countries had slowed, and this gave rise to...

