THE MERGER of Daimler-Benz and Chrysler changes the landscape in the auto industry.
Chrysler Chairman Robert Eaton says he knows of six big deals in the making.
Some analysts think that mergers of titans - or at least grand, global alliances - will become commonplace in the post-DaimlerChrysler world.
'It causes people to think,' said Louis Hughes, president of General Motors International. 'What is my company doing? What is my strategy?'
The rush to find global partners may start immediately. The following analysis looks at how the world's major auto companies stack up as potential partners.
Management is diverted by trying to salvage the Rolls-Royce purchase without raising the bid. Losing Rolls-Royce will mean BMW has a bankroll and a hunger.
Big expansion of the US plant for sport wagons will bring organic growth in one new segment, but building an international name for Rover cars may no longer look like the best route into the global market.
BMW has always wanted to offer the premium cars in various segments. The DaimlerChrysler example may have managers looking for a partner with volume products.
Daewoo has global aspirations, a weak balance sheet and pride. GM and Daewoo are talking about what they can do together. GM won't want to come back to the marriage on the same terms it left, 50-50 ownership and Korean control.
Daewoo has deals in place in east Europe, small cars, Ssang-Yong, and a plan to grow into a Top 10 carmaker. It cannot fund the plan with current resources.
Integration of two big partners will take executive time for years. A new blockbuster deal is unlikely, but the company needs an Asian partner for regional balance. Deutsche Bank, Kirk Kerkorian and Kuwait are the biggest shareholders, and they won't interfere with operations.
Daimler's heavy truck business isn't rich, nor is Nissan Diesel. Integration would be a headache, but a major investment may be a first step on a learning curve.
Mercedes-Benz Maybach at high end and Chrysler Composite Vehicle at low end will cover the entire global product range.
Talks with Ford and Chrysler and Volvo failed in the past, but times change. The Agnelli family has no executive ready to run the company, and it has a worldly view.
Fiat strengths are Italy, solid brand names and the Palio. The Palio is on sale now in emerging markets. Every other emerging market car is still in development. Weaknesses are: other major markets, sport-utilities and minivans, and upmarket cars.
Fiat is an attractive partner.
Cost cutting and platform sharing of Ford 2000 is paying dividends. Ford is achieving the culturally difficult integration of Mazda.
Thanks to Mazda, Ford is the world's most globally balanced automaker: Ford's share of its weakest market (Asia) is larger than any competitor's weakest-market share.
Quick Asian growth - and problems - could come by taking over Kia, in which Ford and Mazda already have an investment. Price must be cheap, as return is distant.
A European marriage like Fiat would bring quick cost cuts.
Fuji Heavy Industries
Japan's smallest carmaker's Subaru car range emphasizes small, all-wheel drive-sedans and sport-utilities.
It builds cars in the US in a joint venture with Isuzu. Regional player there, stronger in the snowbelt. It has only a small presence in Europe, selling only 45,000 Subaru cars in 1997.
Limited geographic strength, small product range and market weakness in Japan do not make it an attractive buy.
Could GM could lose its world No. 1 rank in a merger frenzy?
'We don't feel pressure,' said GM International President Lou Hughes. 'Some companies could feel threatened (by the DaimlerChrysler merger) and that could lead to other alliances. The speculation that this could lead to other consolidations is not an unremarkable observation.'
Though tops in North America and among the biggest in Europe, GM trails the Japanese everywhere in Asia except China.
GM has been aggressive in developing markets like Hungary, Poland and Russia, and a new tie-up with Daewoo would take it into Korea and a few fringe markets, like Uzbekistan.
Isuzu is a force in Southeast Asia, but GM needs a strong Japanese carmaking partner to give it unassailable global reach.
Strong performance at home and abroad has left Honda, along with Toyota, atop the Japanese industry. It would be the ideal partner in size and reputation for several makers in Europe, where it lags compared with North American presence.
Alone among Japanese companies, Honda's American-style management may understand merger mania, but go-it-alone engineering culture makes Honda-initiated merger doubtful.
Honda is masterful at using a few platforms to enter multiple segments. It was originally renowned for its engines, but its latest models are hits due to interior styling more than powerplants.
Hyundai has announced plans to lay off 20 percent of its workforce, but is still the strongest of Korea's battered carmakers. It has a foothold in several small, emerging markets, exporting cars and trucks to 190 countries.
Hyundai is also the leader in the Korean market that European, Japanese and American companies covet. It offers a competitive new low-end car in the Atos and is preparing a sport-utility and minivan. Like Daewoo, it has a strong entrepreneurial culture.
'The deal between Chrysler and Daimler-Benz shows that getting bigger through mergers will be a trend in the future,' said Lee Kyu-young, analyst at the Korea Automobile Manufacturers' Association. 'Hyundai Motor will be thinking about high-profile links with foreign partners to compete better in global markets.'
Kia is bankrupt. Daewoo and Hyundai and Ford are all interested, but only Ford has money. Kia has some capacity, a distribution network in a collapsed economy, contacts and half-done deals in emerging markets, some talented workers, debt and broken dreams.
Years of spending with little regard to return on investment have left it with weak earnings and balance sheet. It has been hard hit by the Asian crisis.
Both Daimler and Chrysler have dealt with Mitsubishi; when Daimler wanted a Japanese partner, it looked elsewhere.
Volvo, Mitsubishi's NedCar partner, is an obvious choice for a tie-up. Both companies insist they want to stay independent, but Mitsubishi Group will decide if the carmaker is in play. New President Kawasoe has started restructuring. The depth of his resolve will be tested. Lender Bank of Tokyo-Mitsubishi has a strong reputation, unlike the rest of Mitsubishi Group, and may back Kawasoe in tough decisions.
Restructuring of European operations is paying off, but USA and Japan are a mess. Finances are shaky, not helped by weak lenders Fuji Bank and Industrial Bank of Japan, which had to allow the group's securities house, Yamaichi, to go bankrupt.
By unloading truckmaker Nissan Diesel, a perennial headache, to Daimler, Nissan hopes to forge links to DaimlerChrysler. The German-US firm may wait, though, for Nissan management to get its house in order.
Still betting heavily on sedans, station wagons and sport-utilities, like Toyota, Nissan hasn't yet figured out the minivan and compact minivan markets.
Chairman Wendelin Wiedeking vowed to remain independent after the death of founder Ferry Porsche in March. Porsche's financial position is so strong that it probably can survive on its own for now.
Porsche would be a great trophy, but it would command a high price and is crucial to no one's global strategy.
The isolated French carmaker badly needs a global partner. It abandoned North America in 1991 and is weak in Asia, where its two China projects have been disappointing. It is just getting started in South America.
New Chairman Jean-Martin Folz brings new outward focus. The balance sheet is weak, but PSA offers underrated engineering prowess and solid brands in the heart of Europe.
Merging with Renault would be an organizational nightmare and would bring little added value to either of the French companies. But an efficient Japanese producer could learn much about style and passion from Peugeot and Citroen.
Renault's attempt to grow organically is well-meant but tiny. Merger is difficult with the French government the largest stockholder. Renault does not have enough money to buy anyone else.
It is heavily dependent on France and Europe. Heavy product dependence on small to lower-medium car segments. Product development and design is a real strength.
PSA-Renault merger is a bad strategy, as it doesn't strengthen weak areas. A Volvo deal would add trucks and luxury. Toyota or Honda would be a nice fit, but difficult culturally.
Suzuki is already in partnerships with General Motors that include the CAMI joint-venture plant in Canada and sharing its Vitara sport-utility with Chevrolet. GM holds a 3.5 percent stake. The company's international assets are strength in small cars and factory in eastern Europe.
Its factory in Hungary plans to boost production to 70,000 units this year, and can go to 100,000 units. GM's Opel brand is likely to rebadge a new small car from Hungary, for sale in 2000.
The world's richest carmaker, with almost no debt, could easily finance a takeover. It prefers to grow organically, building new plants in France and elsewhere. High market capitalization virtually rules it out as a takeover target.
It has strong presence in Japan, Asia, and North America, so is turning its sights to Europe, South America, and China. Will not long remain No. 2 among Japanese in Europe behind Nissan.
It is spending heavily on environmental efforts, especially alternative powerplants. Toyota is still the world's manufacturing leader.
After digesting Seat and Skoda in recent years VW now has Rolls-Royce on its plate. But Ferdinand Piech loves a challenge and is full of surprises. He is obsessed by Daimler-Benz and may seek a mega-merger of his own in response.
VW already seems well-positioned without a grand alliance. Europe's No. 1 is on a roll, reaching nearly 20 percent market share in April with its four brands.
But though profits are rising, margins are still thin. And the group is not perfectly spread around the globe.
In North America, the New Beetle leads a US revival, but VW still has a long way to go to recapture its American glory days.
Strong in South America, VW dominates China's tiny passenger-car market, and is a successful importer in Japan.
Merging with Ford or Toyota would create a new global No. 1.
Volvo wants to remain an independent niche player, and has restructured heavily in the past several years to focus on cars and trucks. Volvo says it is open to partnerships on trucks, but Volvo management divorced Renault once already.
Volvo has a strong presence in US, UK and Sweden. It has a stellar reputation for safety but competitors are catching up, and they don't sell at a premium.
Produces the S40/V40 in joint venture with Mitsubishi in the Netherlands at NedCar. The companies disagree over the timing of the replacement car. Volvo wants it sooner, and Mitsubishi later.