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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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
Re: Fiat: 'zero growth' for EU car makers
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.
Re: Fiat: 'zero growth' for EU car makers
These kind of comments should be always avoided if you ask to me, I agree. Marchionne Chrysler-Fiat synergy worked but no one can really know how things could have gone...
What I know is that Fiat froze so many projects for so long a couple of years ago that even coming back to investing in developing new models again would have been late. At least in US market there was the chance to make some money bringing there old models and optimizing Chrysler.