Posted on 01/15/2013 11:41:21 PM PST by bruinbirdman
The boss of Italian carmaker Fiat has warned that Europe's embattled car industry will 'unravel' unless the European Union steps into co-ordinate urgent cuts in capacity across the continent.
Sergio Marchionne, who is also chief executive of US carmaker Chrysler, said that the biggest carmakers in Europe probably lost about €5bn in 2012 as sales in the region fell for a fifth straight year.
With sales forecast to decline for a sixth year in 2013, most experts believe that the industry needs to embark on significant retrenchment to better match the weakened state of demand from drivers. "I've been an advocate of European intervention in the sector which allows an equitable distribution of the reductions over the countries," Mr Marchionne said at the Detroit Car Show on Tuesday.
The absence of any co-ordination by the European Commission, Mr Marchionne argued, will lead to cuts being made in a "haphazard" way that will see governments put their national interests above the greater good of Europe's car industry.
Europe has again been the biggest headache at the annual gathering in Detroit, where executives have been optimistic about the prospects for both the US and Asian markets in 2013.
Fiat, which acquired a 60pc stake in Chrysler after the US carmaker plunged into bankruptcy in 2009, expects to have lost €700m in Europe last year.
"Ultimately, this whole thing will unravel," said. Mr Marchionne, one of the industry's most high-profile executives. Fiat, Peugeot-Citreon and Renault have all estimated that the European car industry has about 20pc too much capacity, but factory and plant closures have so far been limited as carmakers faces intense pressure from European governments not to act.
Mr Marchionne said that Europe needs to take lessons from the collapse of the US car industry in late 2008,
(Excerpt) Read more at telegraph.co.uk ...
Insane. Sounds like he wants an allotment of production from a centralized government, and not to win a market share by building something everybody wants.
So is someone supposed to tell VW, Audi, and Mercedes, and BMW that production is restricted to a certain number to ensure this guy can stay in business?
Partly. Some of this is governments subsidizing excess capacity. Many of these automakers are also semi-government owned.
This is really all just symptoms though. The real problem is the collapse in demand and zero recovery. Too much socialism is blocking growth. And no small part of it is the US economy going nowhere because business confidence is in the pits.
The reason is a focus away from basic cars. That market is too crowded.
Quite frankly the lower end of the market in Europe is nearly dead. People are buying cars, yes, but fuel prices are increasing and there is a roaring second-hand business
Fiat might be able to sell really small cars, should move away from the mid-range of the market
France's car industry is sc***ed due to Hollande, so bye-bye Peugeot and Citreon. Renault will survive due to its partnership with Nissan
Is this the “Equalization Act” or the “Anti Dog Eat Dog Act”?
Let the Asian taxpayer subsidize the European car consumer. Europe should stick to socialism and concentrate on getting someone else to finance it.
No, he simply sees a European Union headed by Germany as a Mercantilist economy and thought it couldn’t hurt to try to take advantage.
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