Buying up ailing marques was once a surefire way to put your own brand in front. Daniel Attwood asks whether it's a strategy that still works or has the map been redrawn
In theory it makes sense: a major carmaker spies a smaller manufacturer in trouble and, as in nature, the big fish swallows the small minnow.
Over almost two decades, Ford has consumed smaller fish as a way into new markets: Land Rover has given it 4x4s, Aston Martin prestige British sports cars and so on.
Eventually, this acquisition of niche manufacturers allowed Ford to create the Premier Automotive Group (PAG), which now consists of Volvo, Land Rover, Aston Martin and Jaguar.
But after 17 years and an estimated US$5 billion, Ford has failed to make Jaguar profitable. Now the US carmaker, which is struggling with substantial losses, looks likely to rid itself of its niche companies.
It has confirmed it is to off-load Aston Martin, which unlike Jaguar is actually profitable, and industry analysts say Jaguar and Land Rover will be sold off soon, probably as a pair.
Over the past 20 years, American carmaking giants could not resist acquiring European and, in the case of GM, Asian brands.
The Americans were not alone - BMW embarked on a disastrous spending spree in Britain when it took over MG Rover. After pouring good money after bad, it sold the doomed concern for just £10.
There is logic to buyouts: a company can use its technology across many models and marques thereby cutting manufacturing costs.
Without Ford, Jaguar would not have the X-Type, which is based on the Mondeo platform. Or consider Volvo's benefits just from Ford's Focus platform, which forms the basis of its S40, V50 and new C30. Or look at the VW group where the same engines power Audis, VWs, Seats and Skodas.
But sharing technology does not mean loss makers will become profitable. Despite Ford's investment, Jaguar continues to eat away at the group's finances.
Just days ago, Ford confirmed staggering third-quarter losses of $5.8 billion. Its problems in North America - pensions, redundancies, healthcare and declining sales of its core vehicles - were blamed.
But it also cited poor performance of its PAG arm, which lost a reported $0.5 billion during the same period.
General Motors also embarked on takeovers and acquisitions - it now has Chevrolet (aka Daewoo), Saab and Opel/Vauxhall - among its fold.
Things are going well for some of its brands. Earlier this year GM Europe again posted record sales for both its introductory brand, Chevrolet, and Saab, which primarily serves the business markets and saw sales rise by almost a quarter during the first six months of this year.
Most of these increases were in Eastern Europe where the marques were admittedly starting off from a very low base.
There have been other successes: Skoda, the wholly-owned VW company, this week posted impressive profits, which are up over 60 per cent for the first nine months of the year.
Despite limited successes, times remain difficult for the two American giants, GM and Ford. While these carmaking giants struggle to make all their operations pay, they must be looking at Toyota with eyes of green.
Instead of buying up companies and attempting to turn them around, Toyota has forged an impressive route towards world domination - it is predicted that by the middle of 2007 Toyota will be the largest carmaker in the world.
The Japanese manufacturer has achieved this success by internal investment and, when it needed a luxury brand, it created its own - Lexus - rather than buying up an existing marque along with all its inherent problems.
It appears that despite the few successes with buyouts, the real money is in indigenous growth and internal investment.
So what now for Ford's PAG? Well first it will be rid of Aston Martin, which has a host of possible buyers.
Everyone from Renault, which has the ready cash Ford wants, to its French rivals, the PSA Peugeot Citroën group, are reported to be interested. As is BMW and even a pair of European millionaire investors.
It is probable that Jaguar and Land Rover will go the same way, although Ford has not yet confirmed this. Even here there are possible suitors sniffing round. JCB, the heavy plant manufacturer, has already expressed an interest in loss-making Jaguar.
DaimlerChrysler is also under the spotlight. Despite serious problems, the company continues to say it has no plans to separate from its loss-making American arm, Chrysler. Chrysler lost $1.48bn during the third quarter of 2006.
With such staggering losses, it is only a matter of time before more loss-making companies are put up for sale by multi-marque car manufacturing giants who now realise they need to rid themselves of these costly burdens and concentrate on their own indigenous brands.