FRANKFURT—Fiat and Chrysler CEO Sergio Marchionne said Wednesday that the new auto alliance can reach a production level of 5.5 million to 6 million cars a year on its own once the economy stabilizes -- the level he says is needed for long-term survival.
We will arrive alone at 6 million units. Between us and Chrysler, we will get there," Marchionne said on the sidelines of the 63rd Frankfurt Auto Show in Germany.
Marchionne has said that threshold is critical for an automaker's survival, creating speculation about whether Fiat was still looking around for other partners. The two groups delivered just over 4 million vehicles total in 2008, with the second half seriously weakened by the crisis.
"Wait until November," Marchionne said, when Chrysler will release its business plan looking ahead five years. "You will see whether I get there on my own."
Many automakers were looking for the silver lining at the Frankfurt Auto Show, boosted by news of sales that revived on cash-for-clunker schemes that revived sales but questioning how strong any recovery will be. It is the first major industry gathering since the crisis reshaped the industry landscape, with Fiat Group SpA taking a controlling stake of Chrysler LCC in June as it went through bankruptcy, Volkswagen taking over Porsche and Canada's Magna locking up a deal for General Motor's European Opel subsidiary.
The focus at was on electric vehicles, even though many manufacturers acknowledged it could be as many as 10 years until sales reach mass market levels. A toned down U.S. presence was a clear indication of the toll from the recession.
More than an "auto show of recovery," Marchionne said this year's event was "an auto show of hopes."
"We know that 2010 will be a difficult year, but it won't be difficult like 2009," he said.
Marchionne said he expects that the U.S. auto market will be around 11 million cars in 2010, with "healthier competition" returning when the numbers get to 12 million and above.
"The Cash for Clunkers stuff in the United States has really warped demand. You will see some astronomical numbers in August" suggesting that annual car sales at that rate would reach 14 million, Marchionne said. "I thought I'd died and went to heaven. It's not a real number. We are going to see harsh reality in September, it is going to drop."
The issue is more problematic in Europe where the incentives have not required the industry to address overproduction, he said, and where it is still unclear if the programs will continue in countries like Italy, France and Britain. Germany says it has no plans to renew its scheme.
Fiat took a 20-percent controlling stake in Chrysler LLC in June after Chrysler emerged from bankruptcy restructuring, making Marchionne CEO of both groups. Fiat's successful offer hinged on contributing the small-car platforms and cleaner-burning engines lacking in the Chrysler mix, as well as its industrial know-how
Wednesday 16 September 2009
Fiat chief: Fiat-Chrysler can reach 6 million
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