Fiat CEO Sergio Marchionne said that European carmakers have to consolidate amid a weakening market related to persistent overcapacity and growing financial losses. Marchionne told the Financial Times that the automakers in Europe have started to “get tired of the beating.” The other automakers affected by its weaker market are PSA/Peugeot-Citroen SA and Renault SA, according to Marchionne.
He also told reporters last Wednesday that Fiat may have a third partner before its Chrysler unit has its initial public offering. The overcapacity has resulted to massive drops in the prices of the vehicles offered by European automakers. He said that he hopes that his “colleagues” would realize that the current pricing strategies in Europe can’t be sustained in the medium to long term.
He mentioned that the only automakers that shut down plants in Europe are General Motors Co. and Fiat, which closed their Belgium and Italy plants, respectively. He pointed out that the French automakers didn’t even reduce their capacity. However, Frederic Saint-Geours, who oversees the PSA brands, said that conditions aren’t right for an alliance with another automaker. [source: Autonews]