TOKYO - Japan's vehicle makers, jockeying for market share in a no-growth market, only appear to be ripe for mergers and acquisitions.
After all, the United States and South Korea each have been whittled down to a handful of makers. And a shakeout continues in Europe.
In Japan, 11 vehicle makers are still in business. But that number belies the considerable consolidation that has occurred during the last decade.
Consider Toyota Motor Corp. During the last three years, it has raised its stake in minivehicle specialist Daihatsu Motor Co. from 16.8 percent to 51.2 percent.
It also has increased ownership of its truckmaking affiliate, Hino Motors Ltd., from 11.1 percent to 20.1 percent. Toyota President Hiroshi Okuda has hinted that eventually he would like to own more than 50 percent of Hino.
'They are looking to consolidate their automotive base,' Stephen Usher, senior analyst at Jardine Fleming Securities (Asia) Ltd., said of Toyota.
'In an environment with a lot of volatility, where partners are changing quite frequently rather than looking for an outside partner, they are simply consolidating their internal partners,' he said.
Japan recently made holding companies legal again. They had been banned since the American Occupation broke up the prewar zaibatsu.
When the legal framework governing financial accounting within a holding company is made final sometime in the next two years, Toyota is expected to bring Daihatsu and Hino closer under its umbrella as part of a holding company.
Among other advantages, that might allow Toyota to tally the other two makers' sales as its own, much as General Motors now takes credit for sales of Saab cars because it owns half of Saab Automobile AB. That would boost Toyota's market share in Japan considerably.
Just as Daihatsu and Hino are not truly independent, the independence of several other Japanese carmakers is illusory.
Ford owns a controlling 33.4 percent interest in Mazda Motor Corp. Last month, GM increased its stake in Isuzu Motors Ltd. to 49 percent, up from 37.4 percent.
Last September, GM raised its interest in Suzuki Motor Corp. to 10 percent, up from 3.2 percent. While 10 percent does not give GM control of Suzuki, it sends a clear signal that GM has staked a claim to any future control of the company.
Small, or even large, ownership stakes don't always mean 'hands off,' however. For example, Nissan Motor Co. owns 40 percent of truckmaker Nissan Diesel Motor Co., but it is talking with DaimlerChrysler AG about selling most or all of that interest to the Germany-based firm.
Because Nissan is selling assets to pay down its debts, investment bankers in Tokyo believe Nissan's 4.1 percent share of Fuji Heavy Industries Ltd. also wears a 'for sale' sign. Troubled Japanese banks and financial institutions own another 15 percent of Fuji, the maker of Subaru cars, and presumably would be willing to sell for a good price.
That leaves only three Japanese vehicle makers not under someone's wing: Honda Motor Co., Mitsubishi Motors Corp. and Nissan itself. Only Honda is not considered a takeover candidate, in part because its market capitalization is larger than Nissan's.
Both Mitsubishi and Nissan are struggling with high debts and problems at home and abroad. Mitsubishi has been talking to Italy's Fiat Auto S.p.A., among others, about technical tie-ups, but says it is not interested in a full merger with another carmaker.
Still, industry observers say further mergers are not unthinkable. Indeed, Toyota President Okuda said, 'Nissan may have to join with another company, but whether a foreign or Japanese company remains to be seen.'