Volkswagen-Fiat fight changes up a gear

A fight exploded this week between German auto giant Volkswagen and Fiat boss Sergio Marchionne after he said VW's low prices were wrecking the industry – and VW called for his removal from head of the European car lobby.

Volkswagen-Fiat fight changes up a gear
Photo: DPA

Volkswagen on Thursday threatened to leave the European Automobile Manufacturers’ Association if Marchionne did not resign as president of the lobby group.

The move comes in response to comments by Marchionne published in a US newspaper on Wednesday accusing Volkswagen of pursuing an inconsiderate and destructive price strategy in Europe.

“It’s a bloodbath of pricing and it’s a bloodbath on margins,” said Marchionne, who went on to accuse VW of exploiting the crisis to its own advantage, wrote the New York Times on Wednesday.

Now Volkswagen is calling for Marchionne’s resignation. “Sergio Marchionne is unacceptable as president of the European Manufacturers Association and should go,” said VW chief spokesman Stephan Grühsem on Friday.

Grühsem went on to suggest that VW could simply leave ACEA – the highly influential lobby group made up of 18 European vehicle manufacturers. “In light of the comments, leaving the ACEA is also an option for VW,” he said.

Marchionne’s company Fiat has suffered badly from the price war, along with PSA Peugeot Citroën and German manufacturer Opel, all of which rely heavily on the European market, wrote Der Spiegel magazine on Friday.

In France, Spain and Italy, the Euro crisis has led to a sharp slump in car sales, and overproduction has forced all manufacturers to reduce prices to try to persuade recession-hit customers to dig into their pockets, wrote the magazine.

Marchionne put VW noses out of joint earlier this year by saying another strong car manufacturer was needed to challenge VW’s dominance in Europe.

Until now, German giants VW, BMW and Daimler have avoided the European market squeeze by virtue of their strong exports, especially to China and USA. On Thursday VW posted profits of €8.8 billion for the first half of this year, an increase of 36 percent over the first half of 2011.

But the price war itself is a sign that German car industry is likely to hit trouble in the coming months, warned Ferdinand Dudenhöffer, head of the CAR-Center Automotive Research Institute at the University of Duisburg-Essen.

A recent study by the institute suggested the record levels of special offers and price reductions being offered on new cars in Germany showed that demand could be slowly petering out here too.

DAPD/AFP/The Local/jlb

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


Two hospitalized in Munich after activist crashes parachute into Euro 2020 stadium

At least two people were hospitalised Tuesday after a Greenpeace activist crash-landed on the pitch before the Germany-France match at Euro 2020 when his powered parachute microlight struck spidercam cables at Munich's Allianz Arena.

Two hospitalized in Munich after activist crashes parachute into Euro 2020 stadium
The activist lands on the turf of the Allianz Arena. credit: dpa | Christian Charisius

The pilot flew over the pitch just before kick-off in the Group F clash with “Kick out oil” written on the canopy of his parachute.

However, when the pilot hit television cables above the pitch, it knocked his microlight off balance and he landed on the turf after clipping one of the stands, where the casualties happened.

The activist was arrested soon after landing.

A Munich police spokesman told AFP that at least two people suffered head injuries and “both had to be taken to hospital, we don’t know yet how serious the injuries are”.

The police spokesman said the activist appears to have escaped injury, but “we are considering various criminal charges. Munich police has zero understanding for political actions that put lives at risk”.

UEFA also slammed the botched stunt.

“This inconsiderate act – which could have had very serious consequences for a huge number of people attending – caused injuries to several people attending the game who are now in hospital and law authorities will take the necessary action,” European football’s governing body said in a statement.

The parachutist above the stadium. Photo: dpa | Matthias Balk

“The staging of the match was fortunately not impacted by such a reckless and dangerous action, but several people were injured nonetheless.”

The stunt was a protest against German car manufacturer Volkswagen, one of the sponsors of the European Championship, Greenpeace explained in a Twitter post.

“UEFA and its partners are fully committed to a sustainable Euro 2020 tournament and many initiatives have been implemented to offset carbon emissions,” said UEFA.

Greenpeace said they regretted any harm caused.

“This protest was never intended to disrupt the game or hurt people,” read a Twitter post on Greenpeace’s official German account.

“We hope that everyone is OK and that no one was seriously injured. Greenpeace actions are always peaceful and non-violent.”

“Unfortunately, not everything went according to plan.”

READ MORE: Climate activists rage as Germany opts for drawn-out coal exit