Marchionne takes Volkswagen rivalry to U.S. with special rebates
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Martin Winterkorn, left, and Sergio Marchionne appeared to patch up their differences after an ACEA meeting in September. Photo credit: BLOOMBERG |
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BRUSSELS (Bloomberg) -- Fiat CEO Sergio Marchionne is taking his rivalry with Volkswagen Group in Europe to the U.S. market.
Marchionne, who is also the head of Chrysler Group, is offering $1,000 rebates to current VW owners in the United States to buy a Fiat or Chrysler vehicle.
Marchionne has been in a war of words with VW over auto pricing in Europe, where VW commands 25 percent of the market, suggesting in July that the German automaker was creating a "bloodbath" in the region. Stephan Gruehsem, VW's chief spokesman, responded that Marchionne wasn't qualified to lead the European Automobile Manufacturers' Association (ACEA) lobby group.
The dispute, which included VW and Fiat each threatening to quit the ACEA, highlighted a growing financial gap between German manufacturers with premium brands and their unprofitable, volume-oriented French and Italian counterparts, which are losing sales with low-margin, mid-range models.
Marchionne and VW CEO Martin Winterkorn faced off at an ACEA meeting at the Paris auto show on Sept. 28, a day after VW reiterated its call for the Italian to step down as the organization's head. The executives emerged from the session shaking hands, with Winterkorn saying that the "good friends" had "settled things" and Marchionne saying ACEA members decided to address overcapacity on their own.
On Friday, Marchionne was chosen for a second one-year term as president of the 16-member ACEA, the Brussels-based organization said in a statement. The post rotates yearly, with the position assigned by country for a two-year period.
Conflicting interests
Marchionne has used his term at the ACEA to call for cooperation among the region's carmakers, and backing from the EU, to close factories as the vehicle market shrinks for a fifth consecutive year.
"One of the highest priorities for ACEA next year will be to continue to push for a meaningful and supportive" European Union industrial policy, the lobbying association said.
Volkswagen, which is among German carmakers resisting this approach, is Europe's largest automaker, with its group 10-month market share rising 1.5 percentage points to 24.8 percent. That compares with a 0.7-point decline to 6.4 percent for Fiat.
The ACEA is forecasting that European car sales this year will drop to the lowest level since 1995. The two automakers are among the top performers in the U.S. market this year. Combined sales of VW, Audi, Bentley and Lamborghini brands rose 31 percent in the first 11 months, boosting VW's group market share to 4 percent from 3.5 percent, according to Autodata.
Chrysler Group sales rose 22 percent, lifting its share to 11.4 percent from 10.5 percent.
The U.S. rebate offer is only for buyers who currently own or lease a VW vehicle, according to Chrysler's Web site. Customers don't even have to give up their VW to qualify.
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