Marchionne Accuses Volkswagen of Dumping

Bertel Schmitt
by Bertel Schmitt

Sergio Marchionne accuses Volkswagen of exploiting the European crisis to gain market share by offering aggressive discounts, the New York Times writes. “It’s a bloodbath of pricing and it’s a bloodbath on margins,” the Fiat and Chrysler CEO told the paper.

Indeed, the European market share of all Volkswagen Group brands climbed from 22.6 percent in the first half year of 2011 to 23.9 percent in the same period this year – unavoidable when groupwide sales dropped only 1.5 percent while the market sunk 6.8 percent.

If you want a car at discount in Europe, now is the time. “Never were there bigger discounts than now,” reports Germany’s BILD Zeitung. However, when looking for the biggest discounts, the paper finds someone else than Volkswagen:

“The biggest discounts can be had for Fiat Punto (30.6 percent), Opel Corsa (31.3 percent) and Opel Astra (30.9 percent.)”

Current ACEA president Marchionne wants the EU to help:

“What they should do is coordinate a rationalization of the industry across the producing companies. The ones that really have not acted on this are the French and the Germans, who have not taken out any capacity at all.”

That won’t fly with the French who call a PSA CEO on the carpet when he closes a plant, and especially not with the Germans who have to farm out car production to Finland because they can’t keep up with the demand.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • Jacek Jacek on Jul 26, 2012

    Bloodbath of pricing and bloodbath on margins does really mean dumping?

  • Morea Morea on Jul 26, 2012

    Marchionne may have to sell Alfa to VW just to keep the lights on.

    • See 3 previous
    • Th009 Th009 on Jul 27, 2012

      @Bela Barenyi Actually, Fiat does have the Ferrari brand as well -- I do think that has some value! As for Alfa, it's persistently stuck at 100K units per year. Even though product development is mostly rebadging of Fiat models (8C notwithstanding), it is surely bleeding significant money at that level. And I do think VW would accept an Italian factory if that's what it took -- they have maintained both the Lamborghini factory and the Bentley factory as well.

  • Bela Barenyi Bela Barenyi on Jul 26, 2012

    Sorry to be pedantic, but it's not only Marchionne who "accuses" VW of dumping. You could read the same "accusations" at automotive news: 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

  • Herb Herb on Jul 26, 2012

    Marchionne, with hs ailing European brands is simply not competitive, has overcapacity, is afraid of these dire consequences, and simply attempts to cover this up by asking for some EU regulations to hide these facts. Given the high prices for cars (not restricted to the VW brands) in Europe, especially in Germany, compared to the US, for example, his dumping argument simply is stupid. Just compare the product offerings from the Fiat group with those from VW. Find out for yourself and tell me in which class of cars Fiat is better. But perhaps his strategy will be successful. Why not bail out run-down car manufacturers if you bail out broken banks? What are billions, if you have stupid taxpayers enough to pay for it?

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