Insight

Bridging the culture gap in auto alliances

Alliances are critical for a changing auto industry and too important to be undermined by cultural issues that can be addressed.

John Luce

John Luce

Principal, Advisory M&A Services, KPMG US

+1 312-665-1112

Kristine Coogan

Kristine Coogan

Advisory Managing Director, Strategy, KPMG LLP

+1 312-665-2641

Jeremy Hof

Jeremy Hof

Director, Advisory M&A Services, KPMG US

+1 858-527-5009

Gareth Jones

Gareth Jones

Director M&A HR Advisory, KPMG U.K.

+44 791-954-4467

Automotive alliances and joint ventures are nothing new. Historically, these combinations focused on large, project-based programs to create specific vehicles or components, or to enter a new geography.

But today’s auto alliances are all about innovation. As companies vault into the next era of the industry, they’re developing technology-driven products, including a new generation of electric-powered cars and trucks. So, today’s alliances are cross-industry, involving semiconductor and software makers, and Silicon Valley start-ups.

And unlike previous alliances, these partnerships are too big to fail: they could determine whether auto companies can produce competitive vehicles. Making these new partnerships succeed will require careful planning to address the kind of cultural issues that often undermine alliances and joint ventures.  The partners auto companies need today often have cultures that are the polar opposite of traditional automotive culture, adding to the cultural challenges.

How can automakers accustomed to creating sophisticated physical machines work well with software engineers who spend their days designing intangible technology? How can auto companies that have a spotty record in joint ventures with companies that share the same automotive DNA make these new cross-industry alliances succeed?

Bridging the culture gap in auto alliances outlines how the business and human resources leadership of the partnering companies can create a tone of mutual respect so both sides can understand what each other brings to the table and determine out how to collaborate to successfully achieve their alliance’s goals.