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Weekly Recap: Marchionne's Manifesto again calls for industry consolidation

Sergio Marchionne isn't taking no for an answer. Despite public rebuffs from General Motors and Ford, the leader of Fiat Chrysler Automobiles continues to push for consolidation within the auto industry. His latest assertion came Wednesday when he said a combination of FCA with another automaker could net savings of $5 billion or more annually. No, this isn't about selling his company, he claimed, it's about cutting costs. Put simply, the auto industry wastes money, Marchionne said during FCA's earnings conference call. Companies invest billions to develop basic components that all cars use, but many consumers don't care how they work or recognize the differences. "About half of this is really relevant in terms of positioning the car in the marketplace," he said. "The other half, in our view, is stuff which is neither visible to the consumer nor is it relevant to the consumer." In 2014, top automakers spent more than $100 million on product development, FCA estimated. Marchionne said consolidation could save up to $1 billion on powertrains alone, noting that almost every automaker offers four- and six-cylinder engines. Not everyone has to make their own, he contended. "The consumer could not give a flying leap whose engines we are using because they are irrelevant to the buying decision." That's pretty provocative for enthusiasts, but less so for average consumers. Still, there are major differences in power and efficiency ratings, even among similar engines. Skeptics could argue consolidation would also weaken competition and reduce choices for car buyers. Marchionne stressed his presentation, curiously entitled Confessions of a Capital Junkie, wouldn't require closing factories or dealerships. It's not his final "big deal" as CEO, intent to sell FCA, or a way to elevate his company up the automotive food chain. He claims he wants to fundamentally change the industry and its habit for burning cash. "The horrible part about this, and the thing that I find most offensive, is that the capital consumption rate is duplicative," he said. "It doesn't deliver real value to the consumer and it is in its purest form, economic waste." Other News & Notes Ford Profits dip in first quarter Ford profits fell $65 million to $924 million in the first quarter, hampered by slight dips in revenue and sales.

Aston Martin DBS GT Zagato previewed in renderings

Last fall, Aston Martin and Zagato announced that they would be building special continuation versions of the DB4 GT Zagato to celebrate the Italian design house's 100th anniversary. But the two companies wouldn't stop there, as each DB4 would come with an yet-to-be-revealed DBS variant. Now the companies have released detailed renderings and information about what is officially called the Aston Martin DBS GT Zagato. The car will be based on the hottest DB11 model, the DBS Superleggera. That means it should have a twin-turbo V12 making at least 715 horsepower and 664 pound-feet of torque with all of that going to the rear wheels through an eight-speed automatic. Outside of the bones, the DBS GT Zagato will have a thoroughly revised exterior. As shown in the photos, the front grille is one piece and is more reminiscent of what's found on the smaller Aston Martin Vantage. An exaggerated double-bubble roof is a highlight, and it stretches out to the pointy tip of the tail. The hood echoes the double bubble in its center. The taillights have an afterburner shape that Zagato has favored lately. Neither Aston nor Zagato has said when we'll see the actual car, but we expect it will be shown sometime this year. Buyers will start getting their DBS GT Zagatos at the end of 2020, a year after their DB4 GT Zagato continuation cars are delivered. As a reminder, the price for each of the 19 pairs of cars is 6 million pounds, or $7.93 million at current exchange rates and before taxes.

Aston Martin and Mercedes-AMG formalize technical partnership

The development of a partnership between Mercedes-Benz and Aston Martin has been a long time coming. The news dates back to 2008, and over the five years since was supposed to lead to a rejuvenation of both the Maybach and Lagonda brands. That program ultimately fell apart, but the tie-in was forged afresh in July when the two automakers signed a letter of intent over a renewed partnership. And now that partnership has been formalized.
In a deal just announced, Mercedes-AMG will build a new V8 engine for Aston Martin that will power a new generation of luxury GTs for the British marque, presumably to replace the 4.7-liter V8 in the Vantage. The relationship appears to be similar to the one already in place between AMG and Pagani, only in this case, will involve Daimler taking as much as a five-percent stake in Aston Martin and an observer seat on Aston's board.
The technical partnership is also set to lead to the supply of electric and electronic systems, and could incorporate "additional areas of cooperation in the future." Whether that will include a fresh attempt at reviving Lagonda remains to be seen, as does the future of Aston's long-serving, Ford-based 6.0-liter V12 engine. But for now you can read the full announcement below.