08.12.2008 SERGIO MARCHIONNE: FIAT CANNOT SURVIVE ON ITS OWN

SERGIO MARCHIONNE
FIAT BRAVO MULTIJET

Fiat Group CEO Sergio Marchionne has stated in a newspaper interview today that the Italian firm cannot survive the global economic downturn on its own and, predicting a wave of consolidations, he says that Fiat will need to merge or form a partnership with another carmaker. His comments, which include the view that the number of major carmakers worldwide will be reduced to six or seven, one of which will be a partner to Fiat, comes in an interview published today in Automotive News Europe.

"You need at least 5.5 million to 6 million cars [per year] to have a chance of making money," Marchionne told ANE in today's interview. "Fiat is not even halfway there," he continued, "and we are not alone in this. So we need to aggregate, one way or another."

Fiat Group Vice-President John Elkann also commented last week that a merger or partnership was a possibility for Fiat as carmakers across the world halt their production as demand for new cars shrinks at an alarming rate.

The problem is worldwide, and no carmakers are being spared from the slowdown. Ford is now looking for a buyer for its Swedish Volvo division, while GM is trying to offload Saab. Executives from both of the American giants, along with Chrysler, have been in Washington over the last week pleading to obtain US$15 billion of financial support from the US Congress. Marchionne suggested that his own position could vanish in any merger. "Some people will lose their right to lead," he told ANE, "and that may include me."

Marchionne believes that only one major US carmaker will emerge from a period of consolidation, suggesting the possibility of a merger between GM and Ford. "As far as mass producers are concerned, we're going to end up with one American house, one German of size, one French-Japanese, maybe with an extension in the US, one in Japan, one in China, and one other potential European player," he told ANE. "Fiat is looking at [the new] world and saying it is going to be a marginal player unless it acts," he added. "I cannot continue to work on cars on my own. I need a much larger machine to help me. I need a shared machine."
 

2008 Interfuture Media/Italiaspeed