Question 1: What was the situation at Daimler and what was the situation at Chrysler before the merger?
The situation at Daimler was difficult before the merger because Daimler experienced tremendous losses in the beginning of 1990s. Starting from 1995 when the new CEO came in place some changes were instantly done, for example, unprofitable business units were either closed, restructured or sold. Even though the new CEO had in mind how to turn the company around, the Japanese rivals competed really well by offering comparable products in the car industry at cheaper prices.
In general, the auto industry was shifting, basically many of the luxury car brand merged with other bigger car companies around the world, and therefore, the number of luxury car brands expanded which also had a positive impact on the economy overall.
Chrysler, on the other hand, also experienced a tough period during those two decades; the company was near the bankruptcy twice. Nonetheless, the firm shifted its focus in the direction of cars and light trucks. In the 1990s, Chrysler made significant shifts which ultimately led the company toward a stronger competitor in the car industry. Chrysler shifted its focus and headed for the cost-effective approach, thus the firm was known to be the leanest car manufacturer
During the 1990s the company experienced positive changes which turned them into a strong player. The company was focused toward cost-effectiveness approaches which turned to be new world standards. The company was considered as the leanest manufacturer compared to the other participants of the Big3. Nevertheless, the company’s position in the market was weakening after its attempts to expand the company beyond NAFTA.
Question 2: How does the external macro-environment look like for the automotive passenger car industry?
To address this question I will use the PESTLE forces analysis.