There needs to be another round of consolidation of the motor industry worldwide or some companies will not survive, according to Fiat and Chrysler chief Sergio Marchionne.
He said: “You need to be a mass marketer or be strong in premium to make money, everything in between is perilous. Particularly in Europe it is patently evident that apart from overcapacity issues, the real problems have to do with economies of scale.
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“Make no mistake, without our alliance with Chrysler two years ago there was a danger that Fiat would have been marginalised. In Europe Fiat alone is not economically viable and the price competition in the region is hurting any attempt to make money.
“With Chrysler we have the opportunity to share development costs and we can run a number of key vehicles off the same basic architecture for both brands. The Dodge Dart we have unveiled at Detroit is based on the Alfa Giulietta. A car similar to this will be available in China in 2012.”
Responding to questions over rumours of a further Fiat-Chrysler alliance with PSA Peugeot Citroen, Marchionne said there had been no discussions but he did not rule out tie-ups with other companies if opportunities arose.
“But you have to be careful how you manage multi-brand strategies,” he said. “Ford has done well by bringing everything back under the Blue Oval with its One Ford strategy.”
He did confirm that the alliance is in discussion with its Turkish partner Tofas and the country’s government about a Turkish brand.
“It’s an interesting idea. But you can’t start a brand from scratch, you need a solid base to start from. We could certainly provide an architecture on which to base a vehicle but then the rest needs to be done locally.
“That includes the component sourcing, the vehicle body and styling etc. Then we would want to be very clear about which market sector such a car competed with and where else it might be sold outside the country. We don’t want to increase the competition.”
See also: US: Marchionne eyes ‘third partner’
