By scooping up Volvo's car division, Ford has put the global automobile industry on notice once again that size matters.
And its takeover of Volvo's car arm will have knock-on effects throughout the sector, some of them alarming for its more vulnerable members.
The creation of Daimler-Chrysler last year moved the goalposts when it comes to economies of scale. This year it has made the search for partners much more urgent for Volvo's disappointed suitors.
Most directly affected are Fiat and Mitsubishi - Fiat because of the blow it deals to the Italian group's aspirations in the car and truck sectors and Mitsubishi because of the uncertainty it raises over NedCar, its joint car-making venture with Volvo in the Netherlands.
But it will also have consequences for other sets of behind-the-scenes negotiations going on in the industry that will change its global face by the millennium.
The consolidation includes the components industry, as this week's battle between TRW and Federal-Mogul for LucasVarity underscores. Current negotiations include:
Volvo seeking the takeover of rival Swedish trucks group Scania, to overtake Daimler-Chrysler as Europe's biggest heavy truck maker;
Volkswagen, anxious to enter the heavy trucks business, making approaches to Scania and Volvo. Renault has also expressed interest in Scania;
Renault and Daimler-Chrysler confirming they are in talks with Nissan Motor about taking a substantial stake in the troubled Japanese car maker;
VW, Ford and Fiat, said by London analysts to have made approaches to Nissan;
Daimler-Chrysler separately in talks about acquiring Nissan Diesel, a truck and engine affiliate;
Daimler-Chrysler having had informal contacts with Mitsubishi Motors, although speculation of an alliance is discounted.
Meanwhile, Ford has denied speculation that it might seek to take over BMW and its British subsidiary, Rover, or Honda.
Fiat, the jilted partner in the Ford-Volvo deal, is perhaps under the greatest pressure to merge or make an acquisition. It is expected today to announce sharply lower preliminary 1998 financial figures and poor prospects for this year, adding to the urgency of finding an alternative to Volvo.
It is also heavily exposed to emerging markets such as Brazil. Although this could be partly offset by the unexpected buoyancy of European new car sales, analysts warn that a downturn in Europe could quickly create difficulties for Fiat.
The company yesterday confirmed it was studying "all possible acquisitions and alliances".
Fiat is now left with the fear that Volvo will use Ford's cash to pursue its takeover of Scania, increasing competitive pressures on Iveco, Fiat's truck division, and perhaps driving it into merger with Renault.
For struggling Mitsubishi, the loss of Volvo at NedCar would jeopardise its tentative position in the European market. The Carisma, produced at the Dutch plant alongside Volvo's S40 models, is Mitsubishi's best-selling car in the region, and co-operation with Volvo at NedCar on platform design allows Mitsubishi to reduce research and development expenses.
