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Auto manufacturers look ahead to increased partnership

Posted on Wednesday, January 13, 2016 at 1:42:32 PM

A sense of victory and confidence permeated the Detroit Auto Show on Tuesday as auto manufacturers basked in the glory of a record-setting 2015. With experts like Standard & Poor's reporting that 2016 will likely be an even bigger year for sales - potentially breaking 18 million vehicles - as more drivers seek auto financing, an undercurrent of caution remains.

"There are some pockets of oversupply in the large and luxury segments as certain luxury automakers are trying to counter their weakness in foreign markets such as China," S&P analyst Nishit Madlani told Forbes. "The recent dramatic decline in the Chinese stock market, which was spurred by a disappointing manufacturing report, and geopolitical tensions in the Middle East, which tend to lead to increased gasoline prices, remain headline risks to our forecast."

In order to get ahead of potential pitfalls like economic fluctuations and rising development costs, Nissan CEO Carlos Ghosn suggested that the auto industry would continue to consolidate through mutually beneficial partnerships. Renault-Nissan's alliance with Daimler AG - parent of Mercedes-Benz - is an example of what Ghosn has in mind.

"This is consolidation," he told Detroit Free Press. "But this is very modern consolidations where you don't have to choose between freedom and scale."