For smaller automakers, teaming up with a much bigger competitor could be a lifeline. Mazda and Toyota entered into a business and capital alliance last year "aimed at creating new types of value for future mobility," including projects for electrification and connectivity. Toyota took a 5 percent share in its much smaller rival.
"Smaller players are going to have a tough time going forward," Abuelsamid said. Mazda can leverage some of Toyota's huge scale, but at the same time contribute some of its own DNA -- as a brand focused on design and sportiness -- to the effort, he said. Toyota President Akio Toyoda characterized the partnership as "the realization of our desire to never let cars become commodities."
It is that fear that is pushing many of the new alliances, Abuelsamid said. "As the industry shifts away from individual vehicle ownership toward mobility as a service, it's going to be harder for companies to differentiate themselves," he said. "Today, if you own a car, it's an expression of who you are, but if you are just using a vehicle on demand as a service, that won't be important to you. That will make it hard for a lot of companies to carve out space in the market," he continued. "We will see fewer companies providing more services." Tschiesner echoed this view, calling commodification "the most horrendous picture you can paint" for most automakers.
As participants weigh these new arrangements, they can look to perhaps the most successful alliance in recent decades: The Renault-Nissan alliance, which was formed in 1999 and added Mitsubishi in 2016. Though Renault holds a significant stake in Nissan, the two companies have remained separate. At press time, the arrest of CEO Carlos Ghosn in Japan on suspicion of financial irregularities at Nissan has thrown the future of the alliance into turmoil, but it has become arguably the largest automaker in the world, rivaling VW Group with more than 10 million annual sales.
Tschiesner said it was precisely the deliberate pace of consolidation under Ghosn that made the Renault-Nissan-Mitsubishi alliance a "role model" for other cooperations. "It was always designed as a long, slow integration," he said. "Obviously it would have been possible to integrate everything in three years, but they wanted to get the two company cultures and organizations on board. It's based on a 'best of' approach," he added. "It's not one company taking over another. That could lead to more resistance."
In some cases, competitors are becoming cooperators, working together in one area while battling it out in another. That is the case with BMW and Daimler, who are merging their DriveNow and Car2Go short-term rental services. "The competition is not between Daimler and BMW," said Schiller. "The competition is the car-sharing tech providers, the Ubers of the world. If they want to gain market share -- and only the No. 1 and No. 2 can make money in such an ecosystem -- they need to form an alliance."
Ford CEO Jim Hackett has called the budding partnership with VW a "delicate dance," noting that while initial discussions on vans had gone well, he wanted to proceed with caution on working together on electric cars or merging operations in South America. "We still compete in a bunch of areas," he said.
And there are still some areas that are off-limits to collaborations, as companies seek to protect their intellectual property. "Where we absolutely want to be involved, where we don’t need partners, is in the sensors and the first level of software," Valeo CEO Jacques Aschenbroich said in an interview at the Paris show. "Of course, we have a well-known partnership with Mobileye [which makes frontal cameras], which has significant orders, but we are the only one today with lidar on the market. That is our territory."
Intellectual property, data protection and cybersecurity are all areas of concern, especially with broad alliances involving autonomous driving and connectivity, which rely on over-the-air updates and proprietary computer algorithms, analysts said. "The big players want to assure their customers that they are in full control of their data," Tschiesner said, noting that privacy rules are different around the world. Antitrust rules could also come into play if an alliance or ecosystem is seen as too dominant, he noted.
Jentzsch said that more attention needs to be paid to cybersecurity. "You are much more vulnerable with these digital platforms," he said. Hacking "is happening every day," he said. "The situation will change drastically when the first autonomous cars are crashed on purpose."