... to operate at a loss because of the industry's high exit costs. So, automakers began looking to M&As to remove the excess capacity in the market. In so doing, the automakers could really benefit in two different ways; first, the acquirers could gain massive operation efficiency from closing the less productive factories, laying off the effective staff and having a smaller overhead for the combined company; second, the smaller production capacity would also put less pressure on the industry's profit margin. So, taking these reasons into account, automakers believed successful M&As could help them gain a more efficient operation, better managers, and subsequently, a greater market share and clout in this saturated industry. In fact, the European automaker, Volkswagen has just recently undertaken a couple of Europe-wide M&As for exactly the same reason. The second type is the Geographical Roll-up M&A. At first glance, this strategy is very similar to ...

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