“Right now, too many cars are being made and we are selling them at ridiculously low prices and this can’t go on forever.”

“Right now, too many cars are being made and we are selling them at ridiculously low prices and this can’t go on forever.”

The boss of Italian car giant Fiat wants the EU to step in and help rescue Europe’s beleaguered automotive industry.

As carmakers struggle with falling sales, Sergio Marchionne called for intervention on a European level. He also wants individual companies and countries to stop making unilateral decisions which are not in the interests of a single market.

Marchionne, who also heads up American car firm Chrysler, drew parallels with what happened in the US industry when the economic crisis hit in 2007. Vehicle sales there slumped from 16 million a year to just 10 million and the government stepped in to bail out automakers.

Enforced Chapter 11 bankruptcies, where the state took control, allowed the carmakers to “cleanse out the old companies and to re-shape and re-size”, he said.

“The parallel with Europe is startling. People just aren’t buying cars. In Italy last year the market came down to the same number of sales as there were in 1979 – we have lost 33 years of volume growth. Car factories all round Europe are tooled up to deal with volume expectations which just have not materialised.

“I would like an intervention at a European level and a stop to the unilateral actions being taken in some countries at the expense of others. That is not how a single market should work.”

Marchionne said that the big volume makers are losing billions of euros a year and factory closures are already under way – Ford plants in the UK and Belgium, General Motors in Antwerp, PSA Peugeot Citroen in France and Fiat in Italy.

He added: “This is a painful process that often favours one market over another.”

Marchionne, as chairman of the European carmakers’ association ACEA, has been lobbying the EU but said he is being ignored. 

“The EU should act and provide support to help the industry restructure and build a growth agenda," he maintains.

“Right now, too many cars are being made and we are selling them at ridiculously low prices and this can’t go on forever.”

Marchionne also said he did not see the markets rebounding for some time, and certainly not in 2013.