Private equity players on the global auto stage face a variety of challenges, ranging from complex industry dynamics, a rapidly shifting competitive landscape and structural limits to the speed of transforming portfolio companies and managing cultural differences, said Dominik Luczak, partner and leader of McKinsey & Co.’s automotive practice in Japan.
But they can also play a vital role, by bringing expertise, talent and access to funding in the right direction.
“If set up and executed the right way,” Luczak said, “this can be a win-win and great opportunity equipping companies with access to additional funding for growth, challenge the established strategy with a fresh outside view and be the spark for a successful transformation.”
The disposal of Marelli’s forerunner companies by their automaker partners contrasts with the tight-knit approaches Toyota and Honda still take toward their own keiretsu suppliers. Even as Nissan shed its suppliers, Toyota circled closer with its group, anchored by heavyweights Aisin Corp. and Denso Corp.
Meanwhile, Honda helped broker a megamerger among three of its keiretsu suppliers with Hitachi Automotive Systems into a new Japanese juggernaut called Hitachi Astemo.
Honda still keeps a 33 percent “silent partner” stake in the company.
Luca Ciferri contributed to this report.
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