$1,000 rebate offered to VW owners in US to buy Fiat or Chrysler models

Article by Anita Panait, on December 11, 2012

Sergio Marchionne, chief executive of Italian carmaker Fiat SpA and its subsidiary Chrysler Group, is offering $1,000 rebates to current owners of Volkswagen vehicles in the United States to buy Fiat or Chrysler models. Marchionne has been locked in a word war with VW over vehicle pricing in Europe, suggesting in July that the German carmaker was creating a "bloodbath" in the region.

The chief spokesman for VW, Stephan Gruehsem responded that Marchionne was not qualified to lead the European Automobile Manufacturers' Association (ACEA) lobby group. The dispute between VW and Fiat underscores a mounting fiscal gap between profitable German carmakers with premium brands and unprofitable volume-leaning French and Italian automakers with their loss-making low-margin mid-range models. VW and Fiat are threatening to quit the ACEA.

Marchionne and VW chief executive Martin Winterkorn faced off during an ACEA meeting at the Paris auto show on Sept. 28, 2012, a day after VW repeated its call for Fiat’s CEO to withdraw as the organization's head. After the meeting, Marchionne and Winterkorn emerged shaking hands, with the latter saying that the "good friends" had "settled things."

Marchionne, on the other hand, remarked that ACEA members are determined to address overcapacity on their own. On Friday, ACEA members re-elected Marchionne for a second one-year term as president of the association.

The ACEA headship is a post that rotates yearly, with the position assigned by country for a two-year period. During his term at ACEA, Marchionne called for cooperation among the region's carmakers and support from the European Union to shut down factories as the vehicle market gets smaller for the fifth straight year.

Topics: vw, fiat, chrysler

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