Marchionne keeps ACEA presidency after VW spat

Fri Sep 28, 2012 4:58am EDT
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By Jennifer Clark and Andreas Cremer

PARIS (Reuters) - Fiat SpA FIA.MI Chief Executive Sergio Marchionne said he had not quit as president of European carmakers' association ACEA, after Germany's Volkswagen AG (VOWG_p.DE: Quote) called for him to go.

The spat has highlighted growing tensions over fierce price competition in the slumping European car market.

A sparring match between the pair began with remarks Marchionne made in July about the German carmaker, which has been clawing business from smaller rivals in Europe.

Marchionne accused Volkswagen in a newspaper interview of being too aggressive and undercutting competitors.

In response, Volkswagen, whose European market share reached 25 percent in the January-August compared with 11.9 percent for number two PSA Peugeot Citroen (PEUP.PA: Quote), called for Marchionne to quit as president of the lobby group.

Marchionne's repeated calls for co-ordinated production capacity cuts to help alleviate Europe's car market crisis have underlined a division between Europe's money-losing mass market carmakers, including Fiat, and their better-performing German rivals.

Marchionne confirmed after an ACEA board meeting at the Paris auto show, that he had not quit. "We're good friends," he said, referring to Volkswagen Chief Executive Martin Winterkorn, as they embraced for a photo.

Relations between German automakers and others are also strained by their contrasting situations - with overcapacity concentrated in France, Spain and Italy - and divergent interests in areas ranging from European CO2 regulations to trade policy.   Continued...

Fiat-Chrysler chief executive Sergio Marchionne (L) and Fiat Chairman John Elkann (R) attend the launching of the Fiat Panda Trekking model on media day at the Paris Mondial de l'Automobile September 27, 2012. REUTERS/Jacky Naegelen