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Wednesday, May 12, 2004

DaimlerChrysler sells off Hyundai stake

So Mercedes has decided to let go of Hyundai. This is a move that is probably best for all parties. Hyundai was a company on the rocks when there was that vast Asian economic crisis a few years back, and Daimler propped them up. Hyundai was able to turn themselves around completely, dominate their home market, and become the lead player in low end cars in America, with Kia, and their namesake. Daimler gets to make a tidy profit, and their stock price will jump. When quarterly results are in, and Daimler is not in the red, their stock price will jump up further.

What about Chrysler? It looks like they're too committed to split at this point. Chrysler and Mercedes share a lot of parts now, something that Hyundai and Mercedes didn't do. Losing Hyundai means loss of a platform for small cars, but it seems that Chrysler is restructuring to accomodate planning for future small cars. With the probable success of the 300C from Chrysler, a car that benefitted largely from Mercedes planning, it looks even more doubtful that Mercedes will pull out of Chrysler. Then again, the pullout from Mitsubishi was a bit of a shock too, so we'll see. But I'm confident both Daimler and Chrysler will stick it out, and be a better company for it.

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