Fiat-VW dispute highlights tensions as market hits 17-year low
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Winterkorn, left, and Marchionne shake hands after leaving the ACEA meeting. Photo credit: BLOOMBERG |
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PARIS -- Fiat CEO Sergio Marchionne and Volkswagen CEO Martin Winterkorn resolved a dispute that threatened to paralyze Europe's main car lobby group as the region's market sinks to a 17-year low.
The executives emerged from a meeting of the ACEA industry organization at the Paris auto show today shaking hands.
They said Marchionne will remain as head of ACEA, following threats by both Fiat and VW in recent months to quit the trade group.
Winterkorn told journalists that he and Marchionne have been "good friends" for years and have "settled things."
Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt, said: "It's basically a spat between two alpha animals,'' adding, "The tense situation on the European market adds to the conflict."
Tensions are rising among manufacturers as European car sales fall to the lowest level since 1995 and executives blame one another for deep discounts that are generating losses.
Since taking the ACEA's two-year rotating presidency in January, Marchionne has called for cooperation among Europe's carmakers on cutting production in response to the contraction.
Overcapacity
Marchionne said ACEA members decided today to address overcapacity on their own, though the automotive market is "not pleasant," and the industry must still address excess production. "We keep on fighting with the same competitors, we all drink from the same trough and resources are limited," he said.
Europe's carmakers are "on the same path and otherwise work well together," Daimler CEO Dieter Zetsche told reporters after today's ACEA meeting. The session focused on carbon-dioxide emissions reduction and trade, among other issues, he said.
The sparring match between VW and Fiat began with remarks Marchionne made in July about the German carmaker, which has been clawing business from smaller rivals in Europe.
Marchionne accused Volkswagen in a newspaper interview of being too aggressive and undercutting competitors.
VW Chief Financial Officer Hans Dieter Poetsch added fuel to the fire when he said at the Paris show this week that "especially carmakers in southern Europe" may have trouble surviving the crisis without government aid.
An industry source told Reuters that Volkswagen still wanted a longer-term revamp of ACEA's structure that would see an end to the rotation of its presidency among carmakers. Instead, VW wanted the presidency transformed into a permanent, neutral role, the source said.
Bloomberg and Reuters contributed to this report
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