The rising political and economic tensions between Germany and most Northern European countries have now spilled over to the automotive sector as the Volkswagen Group threatened to quit the ACEA due to comments made by the head of the European automakers association and CEO of the Fiat-Chrysler Group, Sergio Marchionne.
On Thursday, the New York Times and the International Herald Tribune quoted the Italian born CEO accusing German automakers and in particular, the Volkswagen Group of waging a price war and not allowing the European Union to make it easier for carmakers to shut down underused factories.
“I’ve never seen it this bad,” Marchionne told the New York Times. “All the unresolved issues that have been plaguing the industry for a number of years have all come forward.”
According to some estimates, the European car industry as a whole is reportedly operating at only about 60 to 65 percent of capacity, when as a thumb of rule, plants need to be working at least at 75 percent to be profitable.
Marchionne has repeatedly called for the European Commission to intervene.
“What they should do is coordinate a rationalization of the industry across the producing companies,” he told the daily newspaper. “The ones that really have not acted on this are the French and the Germans, who have not taken out any capacity at all. Everybody should take haircuts.”
The head of the Fiat and Chrysler Groups then went to say that the European car market is “a bloodbath of pricing” and “a bloodbath on margins,” singling out Volkswagen for contributing to losses by reducing its prices.
The Volkswagen Group’s response came via the head of the company’s corporate communication Stephan Gruehsem.
“Mr. Marchionne is unbearable as president of [European auto industry association] ACEA. We call for him to resign,” Gruehsem told the Wall Street Journal.
The German company, which is Europe’s largest automaker in terms of sales, also threatened to quit ACEA in protest of Marchionne’s comments.
Automotive News said that Fiat declined to comment on Gruehsem’s remarks when contacted on Friday.
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