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.
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.