Fiat chief Sergio Marchionne is worried about the long-term future of the European car industry if something is not done to tackle the overcapacity in many Western European factories.
Speaking at the Geneva motor show, Marchionne said western European car production (particularly of small cars) needs to be reduced by around 20 per cent, and he wanted the European Union to help tackle the problem, as “it is their issue too”.
“Some production has to be taken out of Europe,” he said. “The cost of a B-segment car is so high, and the heavy discounts cannot continue.”
Marchionne compared the current crisis in Europe to what occurred in the US in 2007/08 before the financial crash. “They too went on a discount binge and look how that ended. You can’t keep it up for long; I worry about the long-term future of the industry if we do.”
There was a further warning from Marchionne regarding the potential conflicts within the EU about moving some production to eastern Europe, where many countries are pitching to be full members of the EU.