Carmakers need more collaboration, not less

Are Germany’s carmakers embroiled in a cartel bigger than the supersized Audi Q7 SUV? That’s the suggestion from a report in Der Spiegel magazine, suggesting that Audi, VW, Porsche, Daimler and BMW colluded to slow down innovation and limit the effectiveness of emission cleaning technology. The reality may prove more prosaic. On one level, carmakers are in need of more collaboration, not less.

The fact that the five German brands co-operate in “working groups” to set standards has been known for years. And so far there is no suggestion that auto groups colluded on the most sensitive antitrust areas: prices. VW notified regulators about potential antitrust violations during such talks more than a year ago, but so far there have been no charges, fines or mentions of investigations. That suggests this may not become a big issue – though their carmakers’ share prices fell on July 21 when the report emerged.

As far as innovation is concerned, there’s little sign competition has failed. Data by Evercore ISI analysts last year showed that at 14 billion euros, German automakers’ aggregate annual research and development budget is 50 percent higher than tech group Apple’s. A study by the Center of Automotive Management, a German think tank, concluded that Volkswagen, Audi and Daimler each deployed more innovative technology to their vehicles than any other global competitor. Moreover, the German brands face fierce competition from foreign brands which stand outside the alleged cartel.

The real problem might be too much duplication of effort. The Evercore ISI data shows that of the 100 global companies with the biggest R&D budgets, 17 are in the auto industry. Many are developing the same costly technology. Take autonomous driving. CB Insight, a venture capital database, in May identified 44 companies that are developing driverless vehicles.

Some signs of positive cooperation are happening. In 2015, the German auto makers jointly bought Nokia’s digital mapping business Here. Last year, they unveiled plans to jointly build charging infrastructure for electrical vehicles in Europe. Regulators do need to keep a close eye on such joint projects. But as long as antitrust watchdogs do their job, closer cooperation among carmakers is nothing to be feared.

Fuente: Reuters