Fiat CEO Sergio Marchionne will remain the head of ACEA industry organization

Article by Christian Andrei, on October 1, 2012

Fiat CEO Sergio Marchionne and Volkswagen CEO Martin Winterkorn shook hands as they emerged from a meeting of the ACEA industry organization at the Paris Auto Show, signifying that they’ve settled their argument over car-industry strategy. This meant that Marchionne would remain as head of Europe's main automotive lobby group.

Winterkorn told journalists that he has "settled things” with Marchionne, a good friend of his for many years now. Last Thursday, Marchionne that he is ready to resign as head of the ACEA if the board no longer supported him. Within the last few months, Fiat and VW had both made threats to withdraw from ACEA over Marchionne's leadership of the organization.

VW became upset when Marchionne urged Europe's carmakers to cooperate in reducing production due to a market contraction. Marchionne said after the meeting that the ACEA board agreed all member companies would each make their own decisions on matters such as plant closures. Marchionne clarified that there is no common position on this matter at ACEA, aside from managing the regulatory issues.

Volkswagen, which got a boost from its high sales in China as well as from the high demand for its premium marques like Audi, is increasing its share amid the worst European car market in 17 years. Volkswagen was able to accomplish this by offering discounts and financing packages that its rivals in France and Italy can't possibly match.

Last July, VW's chief spokesman Stephan Gruehsem claimed that Marchionne was not qualified to head the ACEA. He threatened to leave the organization after a New York Times article implied that Marchionne considered VW's pricing strategy as the cause for the "bloodbath" in Europe.

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