Currently reading: Detroit motor show 2012: Fiat 'zero growth' for EU car makers
Fiat boss predicts zero growth, at best, for Europe's mainstream car manufacturers to 2014
Steve Cropley Autocar
News
2 mins read
10 January 2012

Fiat boss Sergio Marchionne today predicted zero growth, at best, for Europe's mainstream car manufacturers between now and 2014, while the Eurozone financial crisis runs its course, and stressed again the extreme importance of scale for groups like his own as a bulwark against market fluctuations.

"Being small, diverse and beautiful means absolutely nothing," he told a packed house in one of his typically knockabout press conferences. "You end up being small, diverse and non-existent."

He acknowledged the vital role Chrysler was playing at present in Fiat Group profitability, predicting that the company would soon announce production of two million cars and an operating profit of $2billion for 2011, while expecting to sell 2.4 million cars and earn $3 billion in 2012. "I can't imagine what would have happened to Fiat without Chrysler," he said. "At best, it would have been severely hampered."

He confirmed suggestions that the Alfa Giulietta-based Dodge Dart, launched this week in Detroit, would soon be made in China and pointed out that only projects of this type were likely to make money. "Operating leverage is the key", he said. "You set up a project and then you run the hell out fit, making as many cars as possible out of one basic product."

Despite what he called the extreme unpredictability of financial markets, Marchionne insisted that much of the industry had configured itself for growth in the medium term, once the Euro crisis has resolved itself. "Everybody feels good out the future," he said. "The serious players have embraced change and are ready to reap the benefit."

Under intense questioning, Marchionne rather reluctantly revealed his admiration for "the big guy", aka Volkswagen Group, which he believed had succeeded impressively at sharing as much as possible among its models while "preserving at the edges the independence of each brand". He also admitted his admiration for Ford's Alan Mulally, who had devised a plan and stuck to it, and also for the expansion of Hyundai, whose progress he watched "with both interest and anxiety".

He believed Europe’s industry still had too much car production capacity, though Fiat's affairs were not part of the problem. "Europeans have always wanted the comfort of not changing," he said. "But if you want to succeed, you've got to move it on."

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xanderbrown 10 January 2012

Re: Fiat: 'zero growth' for EU car makers

I think Marchinonne needs to learn that mediocre cars, that have no USP, aren't built well and don't even look that great (except maybe the 500, Panda and Giulietta - though none are class leaders) can't stay on the market for 8 years at a time. Of course you're not going to sell cars. He thinks people aren't buying the models so why renew - when he just needs to bring a class leading competitor to market, shorten the product cycle, and get some decent designers.

Look at the product shelf life of Hyundai models, or how the VW Golf gets has been refreshed and also with diverse ranges (MPV, estate, different styled 3 and 5 dr)

He may have saved FIAT to start with but now he is running it into the ground

Los Angeles 10 January 2012

Re: Fiat: 'zero growth' for EU car makers

matsoc wrote:
it's their fault if no foreign big company has thought to place a single factory in Italy in recent years
It seems to me that that's a good thing - no competition backed by an outside administration able to subsidise their "home" company and so undermine local car prices; no foreign companies getting government grants, that is, local taxpayer money, to allocate a factory and then up stakes and leave when they experience a downturn worldwide and can leave because they have no loyalty to the host nation, hence indigenous companies have the field to themselves. Italian workers get Italian jobs and their product is not diluted by non-cultural influences. Which begs the question, why can't Fiat sustain sales in Europe (if that is true) to keep everybody in work?

matsoc 10 January 2012

Re: Fiat: 'zero growth' for EU car makers

giulivo wrote:

After renegotiating all of the workers' contracts in Italy, fresh off the press is the quote that the Dart will be offered as a Fiat in Italy but imported from China rather than built in Italy.

The acquisition has hardly been a bad deal if you ask me.

Yes, I was listening to Marchionne speaking at the radio while driving back to home and he is continuing to attacks the labor unions even if he successfully renegotiated the contracts and make Fiat leaving Confindustria. He said that labor unions know only to say "no" at everything and it's their fault if no foreign big company has thought to place a single factory in Italy in recent years.