By on July 27, 2012

Fiat & Chrysler CEO Sergio Marchionne’s pointed remarks have attracted the ire of Europe’s 500 pound gorilla Volkswagen. VW demanded that Marchionne steps down as president of the European auto manufacturers association ACEA. If he won’t resign, Volkswagen could resign its ACEA membership – which would send the club into instant irrelevancy, not to mention insolvency.

“Marchionne is unbearable as president of ACEA,” Volkswagen communications chief Stephan Grühsem told Reuters. “In our view, his comments are unqualified yet again. We’re therefore calling on him to step down.” If Marchionne won’t heed the call from Wolfsburg, Volkswagen’s “exit from the manufacturers association is an option,” Grühsem told Germany’s Spiegel magazine.

In an article in the New York Times, Sergio Marchionne accused Volkswagen of exploiting the European crisis to gain market share by offering aggressive discounts, “It’s a bloodbath of pricing and it’s a bloodbath on margins,” Marchionne told the paper.

Marchionne currently holds the rotating appointment of the presidency of the European manufacturers club. After he took over, his remarks and initiatives often were regarded as overly reflecting the interests of Fiat and possibly other scratched and dented European makers only, and to run against the interests of the powerful German contingent. By openly attacking Volkswagen, Marchionne burned a bridge too far.

Marchionne is not very popular amongst Europe’s auto CEOs. Privately, some call him an upstart clown, or worse.

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65 Comments on “Volkswagen Demands Marchionne’s Head...”


  • avatar
    NMGOM

    That’s all too bad. I rather like Sergio.
    Is it possible that he’s right and that VW may in fact be predatory in this Euro debt crisis?

    ————

  • avatar
    PenguinBoy

    I don’t know much about the ACEA, but I like what Sergio has done with Chrysler. Pretty hard to argue with the improvements in product and market share he has driven in the past few years.

  • avatar
    LeMansteve

    Most of this is over my head. Why is SM complaining that VW is offering discounts? Why is he saying VW “exploiting” the Eurozone crisis?

    • 0 avatar
      hreardon

      Because FIAT is struggling in its key European markets. Not much different from the US domestic manufacturers complaining bitterly about Japanese imports in the ’80s.

    • 0 avatar

      ACEA is a trade association meant to represent all European manufacturers.

      Fiat, and most European automakers outside of Germany, are struggling.

      Volkswagen, and most native German automakers, are doing very nicely, thank you.

      Fiat is mad that VW is trying to take market share from them at a time when they desperately need it.

      The Trade Association has a duty to be impartial and represent all automakers, not just Italians (or Germans, for that matter). So VW is mad that Fiat’s leader, as head of the trade association, is trying to tilt the playing field its way.

      Since VW has the money, it has the power. And VW’s interests are the polar opposite of Fiat’s.

      Hope that helps.

      D

  • avatar
    Feds

    I really like Sergio’s shoot-from-the-hip style. The overly cautious “say much without saying anything” culture in corporate (and public) life is probably doing more harm than good.

    That said, when you’re a cat sharing a bed with an elephant, you’d do well to be extra nice to the elephant.

    • 0 avatar
      hreardon

      Funny quote there, Feds.

      While I appreciate ‘shoot from the hip’, I think that Sergio is more desperate than anything. Fact is, Europe has a major over-capacity issue and is in the early stages of a severe recession where things are only going to get worse before getting better.

  • avatar
    NMGOM

    LeManstetve,

    I’m sure I don’t have my numbers exactly right, but here may be one example:
    In France this month, VW is cutting prices and offering about 2% financing on its products, whereas the suffering French automakers (Renault and PSA-Citroen) had to offer 6-8% to make it. VW, being strongly internationally based, could afford a loss in France in order to attempt putting French car makers out of business.

    It’s why the US Gov stepped in when Japanese motorcycle makers were “dumping” bikes in the US in the late 1970′s and 1980′s, in an attempt to shut Harley Davidson down.

    Remember: VW has the unabashed goal of being the world’s #1 car maker by 2018, and will do “anything” aggressively to get there.

    ———-

    • 0 avatar
      LeMansteve

      Thanks. Well, I don’t remember much from my business law and economics classes. Are Volkswagen’s actions illegal, unethical or just very irritating to their competitors? I have a feeling it is the last of those three.

    • 0 avatar
      hreardon

      At least in the US, it’s very hard to prove monopolistic practices, or even a case of product dumping. Volkswagen can make a very good argument that they’re simply clearing inventory of their existing product line to make way for the new MQB Golf this fall (as an example).

      The French auto industry has been in decline for decades and is rapidly working its way into irrelevance. The current recession may be the final nail in the coffin for these very sick manufacturers.

  • avatar
    Lampredi

    “Marchionne is not very popular amongst Europe’s auto CEOs. Privately, some call him an upstart clown, or worse.”

    Why is that?

    • 0 avatar
      NMGOM

      Lampredi….

      Maybe because he pulled off a recovery miracle for Chrysler when Mercedes messed it up years ago; because he is cordially interactive with virtually all his employees; because he no longer uses the executive suite in Chrysler headquarters; because he works like a dog; because he dresses like a common Joe; and because he actually drives Ferrari’s,….quickly.

      ————-

      • 0 avatar
        Viquitor

        I’d add that he’s not afraid to say what needs to be said.

      • 0 avatar
        geozinger

        Before some folks enshrine Marchionne as the Savior of Chrysler, let’s remember he got a turnkey operation. Much, if not all, of the updating had been done before Fiat got the keys to the front office from the US goverment…

        I’m not saying he hasn’t accomplished anything with Chrysler since then, but think about manufacturing timelines and the release dates of the updated products. This was the last gasp of Cerberus to make Chrysler presentable to SOMEONE, ANYONE to take them off of Cerberus’ hands…

        Since then, Fiat has done a slightly above average job with Chrysler, but the next round of challeneges is coming up soon and I hope everyone’s got their act together.

      • 0 avatar
        NMGOM

        Yes, geozinger, you are right…

        The “Miracle of Chrysler” mat not be sustainable.
        Some analysts have said (can’t come up with reference), that neither Chrysler nor GM will be in business by 2020. May literally be the Germans and Japanese. Koreans – who knows?

        The American car industry may end up being the new Renault and PSA-Citroen.

        ———–

      • 0 avatar
        Scoutdude

        Geozinger is right the only thing Fiat has done so far is marketing and the new Dart. Only time will tell whether it is a good car or not. From the people I know who designed the thing it was rushed though in less than 18 months. Of course they are standing behind it, but rushing a car to market, and possibly ignoring real world durability testing, usually doesn’t work out so well.

      • 0 avatar
        MeaCulpa

        Yes, Chrysler was sooooo screwed by the Germans. The myth so loved in America, often amended with a rant about the 300 not being a heap of old benz part. Why the guy is disliked? Well he’s basically operating an unprofitable car manufacturer and one that’s supported by government money whilst constantly shooting his mouth of insulting his competition.

    • 0 avatar
      psarhjinian

      Because they’re automotive aristocracy and he’s a parachuted-in accountant. They wouldn’t mind so much, I suspect, if it was an Agnelli at the helm.

      It’s the same reason many in Detroit dislike Steve Rattner and Ed Whitacre. Many industries have a cliquish nature, especially up-on-high, and they resent outsiders, and especially outsiders who a) don’t keep quiet, defer and toe the line, and b) actually do well.

      • 0 avatar
        dank

        Sergio hardly deservers credit. The new Jeep and other car improvements were already in route when Sergio was given Chrysler by the US govermment.

      • 0 avatar
        Roberto Esponja

        @ MeaCulpa,

        Oh yeah, the Germans did a terrific job with Chrysler. It was just us dumb ‘mericans’ fault that Chrysler sucked itself to the bone and turned into a shadow of itself while under Daimler’s wise and cooperative mentorship.

        Please…

      • 0 avatar
        WildcatMatt

        An interesting quirk of history, given that the Dodge Brothers themselves were generally considered outsiders in the Detroit social scene before their untimely deaths.

    • 0 avatar
      djn

      Great question.
      Sergio is not a member of the European “old nobility”. They consider him an upstart “American” (Canada the same to Europe”. They hated Ronald Reagan, George W Bush. Forceful in his opinions, poor breeding, overly hard working. After, the Italian press calls him Il Americano. All the qualities that we admire and enabled him to turn around the Chrysler basket case.

  • avatar
    The Doctor

    You’d have to be a very brave person to bet against Piech. Management stlye aside, at least he’s an engineer unlike Marchionne who’s a salesman.

    • 0 avatar
      Lampredi

      Marchionne from the interview “Meeting Sergio Marchionne” at automobilemag.com:

      “On Ferdinand Piech:
      SM: I think he’s one of the all-time greats in the car industry. Do I like him as a human being? The answer is no.”

      http://www.automobilemag.com/features/news/1207_meeting_sergio_marchionne/viewall.html

    • 0 avatar
      psarhjinian

      Engineers can and do make some spectacular c0ck-ups. Generally it’s different from what sales or accounting do, but it does happen. They’re particularly prone to a kind of professional arrogance (and a disdain for marketing) whereby they’ll assume their needs are the same as their customers’. They’ll also get into technical pissing matches and awful games of one-upmanship.

      I’m not saying all engineers do this, but ones with terrific egos certainly will.

      Case in point, the chase-every-niche, we-have-the-best mentality among the Germans, or Honda’s questionable product-placement choices.

    • 0 avatar
      NMGOM

      Actually, he is an accountant, philosopher, and lawyer, — with advanced degrees — which may explain some of his “renaissance man” traits. So, you are right: he is not an engineer but not just a “salesman” either.

      “He is a Canadian Certified General Accountant (FCGA)[8], barrister, and a fellow of the Certified General Accountants of Ontario. He completed his undergraduate studies in philosophy at the University of Toronto and went on to earn a Bachelor of Commerce in 1979 and an MBA in 1985 both from the University of Windsor[9] and a law degree from Osgoode Hall Law School of York University in 1983.[10]” [ref: http://en.wikipedia.org/wiki/Sergio_Marchionne

      ———–

      • 0 avatar
        The Doctor

        I count three undergraduate degrees and a couple of professional qualifications – not what I’d call advanced.

        Listening to classical music and wearing a pullover at every opportunity does not make someone a renaissance man.

      • 0 avatar
        NMGOM

        The Doctor….

        An MBA stands for Master of Business Administration: that’s an advanced degree. Osgoode Hall Law School of York University is inherently a graduate school, offering an advanced degree in law.
        ref: http://www.osgoode.yorku.ca/programs/graduate-studies

        They are indeed what is usually defined as “advanced”, meaning being beyond a baccalaureate.

        Do you have anything against classical music and wrinkled pullovers? (^_^)
        (With “Renaissance Man”, I was referring to his style, varied involvements, and multi-faceted education, — not his earphones or clothing.)

        ———–

      • 0 avatar
        juicy sushi

        A law degree from Osgoode carries a lot of weight up here, they’re generally one of the 3 best law schools in the country, I think.

      • 0 avatar
        th009

        Osgoode is a good law school, but really he has an MBA and a LL.B. More than a BA, but those are two masters-level degrees. Martin Winterkorn does have a Ph.D in engineering from Max-Planck Institute.

        Not that the degrees really matter at that point in one’s career anyway.

    • 0 avatar
      Polar Bear

      I looked up Ferdinand Piëch’s private life. Got to admire the energy of a guy who has twelve children with four different women.

  • avatar
    Brantta

    “some call him an upstart clown, or worse”.

    Hahaha classic TTAC, Ed would be proud.

  • avatar
    dejal1

    I thought the whole point was to prosper and take market share?

    Also, aren’t you supposed to crush your enemies, see them driven before you, and to hear the lamentation of their women?

    • 0 avatar
      NMGOM

      Hi dejal1..

      Beautiful! Got a laugh.

      I guess the right thing is to crush your enemies gracefully and properly so that they don’t mind; so that the only driving that occurs is in your cars; and so that their women only lament over their husbands not being home enough because said husbands are driving those competitor’s cars too much! Best of all worlds.

      ————-

    • 0 avatar
      Freddy M

      Awesome!!

      Of course, VW has learned the secret to the Riddle of Steel.

      Now Piech and co. want to cast Marchionne out of Valhallah and laugh at him.

  • avatar
    Bela Barenyi

    This is a fine example of Germans and their “dismal” English skills.

    Here’s the important part of the article:

    “Mr. Marchionne and other auto executives accuse Volkswagen of exploiting the crisis to gain market share by offering aggressive discounts. “It’s a bloodbath of pricing and it’s a bloodbath on margins,” he said.”

    Funny, isn’t it ? Everybody just attaches these accusations to
    to Marchionne, but forgets to highlight that “other auto executives”
    also accuse VW of dumping. For instance, Mr. Varin from PSA also made the same claim, but nobody in Germany gave a damn.

    Moreover, you could read the same arguments days before the Marchionne interview from other people:

    VW gains share in France with deals PSA, Renault can’t match:

    http://europe.autonews.com/apps/pbcs.dll/article?AID=/20120722/ANE/307189949/1193/vw-gains-share-in-france-with-deals-psa-renault-cant-match

    VW Group has rivals by the throat – don’t expect any mercy:

    http://europe.autonews.com/article/20120723/BLOG15/307239996/1503/vw-group-has-rivals-by-the-throat-dont-expect-any-mercy

    • 0 avatar
      Viquitor

      Then it might just be all about kicking SM out of ACEA.

    • 0 avatar
      W.Minter

      Interesting. But in the end VW is just doing a better job.
      - VW Bank collects a lot of money from private clients (investors) in Germany at 2.0%
      - VW Bank can offer 1,9% loans in France
      - Easy maths: VW still makes enough profit
      (@The Doctor: Thanks, it’s not proper maths ;), but think of getting some nice kick backs from your preferred car maker)
      Here’s an example what’s going on in the french market:
      – Car price: 20,000, 3k down, 4 yr, amount remaining: 8,000
      - 1,9%: 207 Euro monthly, total cost of loan: 961 Euro
      - 3,9%: 228 Euro monthly, total cost of loan 1,983 Euro
      - 6,9%: 261 Euro monthly, total coast of loan: 3,533 Euro
      –> If VW offers 1.9% and Renault 6,9% for a comparable car it’s clear which one you take. And VW doesn’t even need to grant high rebates.

      But Renault doesn’t offer 6,9%.
      I just checked out renaultshop.fr.
      Mégane. 19,700 Euro AFTER rebates. Same down etc.
      282 Euro monthly. Translates into 10,31% … ouch.

      It’s always easy to blame others when you offer bad deals.
      But it’s harder to solve your problems on your own: reduce debt, close factories, invest in quality or marketing. I’m looking at you too, Sergio.
      VW made the right moves in the 90ies. Auto 5000 (workers only earned 2500 Euro) for the Touran. 28h week. Buying market share with low margin Golfs. Hectically stuffing the Golf 5 with free ac – before piling at dealers. Analyzing a segment properly before spending 1 bn to create a model.

      And there’s one speciality in France: Dacia. Renaults made in Romania and Morocco killing Renault’s market share in France.

  • avatar
    doctor olds

    Marchionne would be speaking in the best interests of ACEA, in that the majority of its members suffer from VW’s practices. In the end they are just aggressively pursuing business success, as is the nature of capitalism.

    VW’s press release reaffirms a supremist attitude that didn’t work out so well in VW’s attempt to tie up with Suzuki.

  • avatar
    dcars

    Winning by all costs is losing. If Germany totally dominates the EU financially with it’s very strong banking industry and Industrially (Especially the Auto and high Tech industry) they will alienate the rest of Europe. It seams like more and more the Germans are getting the opportunity to help out the less fortunate in Europe, but instead they are turning their backs on their neighbors. I guess they have learned nothing from recent history.

    • 0 avatar

      So, what should the Germans do? Closing down some of their factories and miss business opportunities? At the same time, in order “to help out the less fortunate in Europe” spending more billions to foster completely inefficient, wasteful governments/administrations?

      If you check the facts you will find out that within the last few years Germany’s debts went up from 60 to 80% of the annual gross domestic product, thanks to “turning their backs on their neighbors”.

      Your suggestions do not compute. Money spent has to be earned, somewhere, by someone.

      Those poor “unfortunate neighbors” like Fiat, PSA. Give me a break! What have these companies done during the last 20 years, for example, to internationalize their business by expanding it in growth markets? Nix.

      As already has been stated above, the problem is overcapacity in the European car industry. That problem has to be solved, and it will be solved by closing factories on the side of the “less fortunate”, or even by closing whole companies that are unprofitable in the long run.

  • avatar
    DownEaster

    Sergio has at least at Chrysler given the employees and the public a sense of confidence in the company and brought new products to market. I think the inspiration here helps. Reminds me a lot of Lee Iacooca in the 1980s. The K-Car was in development and Iacocca’s marketing and reputation helped save the company. Hopefully the company lasts. VW is trying to get market share through discounts. GM and Ford tried this in 1954 and it hurt a lot of the smaller companies such as Studebaker and Nash. This is similar to Europe today. It would be interesting to know how Europeans feel on buying foreign cars from other countries in the EU. Is a German cars consider foreign to the French or do they feel more comfortable or patriotic buying a Renault? Like Americans buying a car from the Big 3 that is made in the USA. Or do the European car buyers have a more European or Global outlook?

    • 0 avatar
      th009

      I think few buyers, in any country, choose a car for patriotic reasons. Many Americans buy Ford, or Japanese buy Toyota, and so on, but I expect it’s more familiarity and long-term loyalty to a marque rather than patriotism.

      • 0 avatar
        NMGOM

        th009,

        If you are right (and I think you are), then that would suggest the “Buy French” campaign by socialist president Francois Hollande will likely fail. Unless there are grievous behaviors by VW (e.g., “dumping”), then most French will simply buy what makes sense for them and their families, just like everybody else.

        ——-

  • avatar
    dank

    Sergio is far from an excellent auto leader. He cut investment on new models for Fiat in 2007/8 when the recession hit thereby ending hte new metal hitting his dealerships in 2010 and beyond. He just last year cut investment again on new models to save money. The only new models between Chrysler and Fiat are badge engineered between the continents. This gives the dealers some new sheet metal but hardly great leadership.

  • avatar
    dank

    I think there is a lot of envy from Fiat with VW. The Germans made 20 billion in profit last year and are on target for 20 billion this year. Fiat loses money every year. That’s why VW bought Ducati for a billion – they make that prorit every two weeks. Sergio would loved to have bought Ducati but the board of directors would have laughed because they simply don’t have the money. The only smart move Sergio made was hiring a German as his head of Fiat engineering. If you can’t beat them, join them!!

  • avatar
    gslippy

    VW is upset by Sergio’s truth-telling, and by VW’s inability to achieve world domination. Their words are merely a distraction.

  • avatar
    Lorenzo

    In the most recent photo of Sergio I’ve seen, he’s growing a beard again. Maybe that’s what has VW po’ed. OTOH Sergio is speaking for the other members. In times like these, the big players really put it to those lesser members and force them into consolidation or bankruptcy.

    In America in the early ’50s, the market was booming, but the big three competed with each other for market share with annual model changeovers smaller makers didn’t have the resources to match. The result was Hudson, Packard, Nash and Studebaker couldn’t compete alone. Packard was forced to join Studebaker in a decade long death spiral, while Hudson and Nash lasted longer as AMC.

    VW may be only using its economies of scale without regard to the others, or it’s actually TRYING to reduce the clutter of smaller European makers and their excess capacity. Considering how long it took Saab to die, how long it’s taking for Adam Opel to be put down, and the political obstacles to closing excess plants in high wage countries, the VW method, if that’s what they’re doing, is a better way to rationalize the industry in Europe. It would also make ACEA superfluous, so a VW exit might come soon anyway – why give the victims a soapbox?

    • 0 avatar
      NMGOM

      Lorenzo,

      That’s a very interesting and realistic historical perspective.

      Yes, it may look brutal from the outside, but if VW can “clean” the European house of weaker car companies that are essentially socialist basket-cases, and do so WITHOUT dumping or unfair trade practices, then, yes, it will increase its domination, but it will also make life better for Mercedes, BMW, Audi, Ferrari, McLaren and others who have well-defined markets and robust businesses.

      ———–

    • 0 avatar
      doctor olds

      VW is just using their scale to grab market share. It may be predatory, but it is just business. GM’s link with PSA is to give them regional scale similar to VW. The Opel nameplate, a Million a year brand, is likely to be here for a very long time, though its role may be more like Buick here, higher profit, lower volume. Chevrolet will grow to fill the value end of the market. Can’t wait to see the S-Class / 7 Series competitor from Cadillac. The ATS has great potential there, too.

      Over time, similar dynamics created “The Big Three” in America, though tooling and product development costs were bigger factors here, particularly in the early years.

      Globally, the smaller players will have to link up with the big boys or die, though politicians most everywhere have a clear understanding of the value of a domestic industry and will undoubtly play a role in the outcome.

      This will be a long drawn out ordeal, perhaps leading to the fragmenting of the Euro. The Germans enjoy the advantage of a strong economy at the same time there currency,the Euro, is weakened by most other Euro economies. A great deal for Deutchland, while it lasts, but what is the end game when the Euro fragments?

      • 0 avatar
        NMGOM

        doctor olds..

        Good analysis and prophecy.

        I wonder if suspicion about the Euro’s integrity and longevity is why the Brits continue on with the pound Sterling (£)? Knowing the Germans, I also suspect that if the Euro even smells like its going to fragment irreversibly or lose permanent value,…..well, don’t be surprised if the there is a return to the Deutschmark….
        …..and the rest of Europe will have to shift for themselves. I think the Germans are growing weary of propping up everyone else’s economy when others continue socialist featherbedding (e.g., Greece) and lack of strategic business planning (e.g., France)….

        ——-

      • 0 avatar
        th009

        @doctor olds, “The Opel nameplate, a Million a year brand, is likely to be here for a very long time, though its role may be more like Buick here, higher profit, lower volume.”

        This might be a feasible approach: drop the smaller Opel models (Corsa, Astra, Meriva etc) and either sell current Chevrolets in their place — or rebadge the current Opels as Chevrolets where necessary.

        Keep Opel to the upper half of the market (Insignia, maybe Mokka and Antara, with premium trim only), and start the hard work to turn it into a premium brand (expect 10+ years to get credibility). Sell both Opel and Chevrolet (and Cadillac?) through a merged Opel-Chevrolet dealer organization.

        Once Opel has some real premium brand cachet, then you can build dedicated Opel-Cadillac dealer locations, and also consider introducing smaller premium cars to compete with the Audi A1, Mercedes A-class and others. But not now.

  • avatar
    GTAm

    The sooner the Fiat, PSA, Renault, GM and Ford Europe shut down their idle factories and zeros the overcapacity issue they’ll be able to compete better with VW on margins. Marchionne has been advocating this for a while now and actually Fiat already shut their Sicilian plant. But closing factories makes governments unpopular. That’s why he’s calling for a common decision from the big wigs in Brussels. This is a simple plan to save the European car industry and strengthen it for the long term. But VW sits in a different position. They see this as an opportunity to prey on the weaker makers and make Europe their own. So there is no union in Europe. It seems likely that VW cannot stay in the ACEA with this stance.
    I’m wonder what the repercussions would be if VW exits?

    With the fragility of the entire EU in balance Sergio is firing without fear. I like it. I’m sure there are analysts out there who have already drawn up several scenarios/outcomes from all this. All very interesting but I hope all the European manufacturers manage to survive. It would be a very dark day in the world for many if Germans were the only European manufacturers to survive.

    • 0 avatar
      NMGOM

      Hello, GTAm,

      Please see my interlinear comments below.

      “The sooner the Fiat, PSA, Renault, GM and Ford Europe shut down their idle factories and zeros the overcapacity issue they’ll be able to compete better with VW on margins.”
      —–
      N: I agree, but margins would only work as a short-term stop-gap. Eventually, they would also have to compete with VW on quality, model offerings, service, and availability,…and that’s going to be much harder.
      ——
      “But closing factories makes governments unpopular.”
      ——
      N: Very true. Can you imagine how popular any US administration would have been if GM and Chrysler were allowed to fail and disband without those government loans in 2009? Well, multiply that sentiment by a large number, and you get an idea of what it is like for more socialist-minded Europeans to deal emotionally with the shut-down of auto factories. (Incidentally, I was not in favor of the US auto bailout as it was done, but thought it would be healthier long term if GM, for example, were allowed to revert to its individual car companies. Tiny Japan has 6; tiny Germany has (had) 5, but the huge USA has 3! How does that promote competition?)
      ——
      “This is a simple plan to save the European car industry and strengthen it for the long term.”
      ——
      N: VW may already see the demise or absorption of small, inefficient car companies as a way to save the European car industry,….and strengthen their own fortunes, of course. Others, obviously, may be less happy with their solution.
      ——
      “So there is no union in Europe.”
      ——
      N: I don’t know what the exact founding principles or precepts of the European Union are with regard to business operations like this, but I suspect they involve mutual economic aid in a broad sense. I doubt that they require a suppression of competition within any one industry for the sake of that level of economic unity. Do they?
      ——
      “All very interesting but I hope all the European manufacturers manage to survive.”
      ——
      N: I think we all suspect that is not going to happen. The VW megalith has just become too large and too efficient world wide for very small or struggling car companies successfully to compete, except if they have unique market niches. If VW wanted to move into those niches, then absorption is an option, such as with Porsche, Bugatti, or Bentley. But I doubt that other German companies are threatened, like Mercedes or BMW. And British car niche-companies like McLaren, Aston-Martin, and Jaguar are actually finding a resurgence. In Italy, Ferrari and Pagani are doing well. In Sweden, Volvo has Chinese support, and Koenigsegg is a specialty company. But as for PSA-Citroën, Opel, Vauxhall, Fiat, and Renault….I believe they will be history by 2020. They are marginal on their own, and why would VW want to acquire them if their offerings would compete directly with VW products?

      But remember, VW isn’t the only “bad guy” here. Japanese and Koreans are coming on like gangbusters in those economies and getting very popular, just as they did and are doing in the USA.

      So, even without the 5 in the ailing group above, I still count a lot of independent resident car companies in that very small European sphere: namely 10. Isn’t that a bit much?
      —–


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