Auto supply to beat demand this year
The global auto industry must reduce factory capacity in order to survive, especially in Europe, Chrysler Group LLC CEO Sergio Marchionne said.business Updated: Jan 14, 2010 20:23 IST
The global auto industry must reduce factory capacity in order to survive, especially in Europe, Chrysler Group LLC CEO Sergio Marchionne said. World automakers can build 94 million cars and trucks a year. But that's 30 million more than it can sell, he said.
Bankruptcies and economic struggles have forced cuts in North America, but European manufacturers have not closed plants, often because they are paid by governments not to, he said. He predicted the global auto industry will be consolidated into five or six companies.
Marchionne also said Chrysler has not decided if it will challenge Congress' decision to require arbitration for 789 dealers whose franchises were revoked during the company's passage through bankruptcy protection.
Marchionne's speech was interrupted twice by protesters. One man yelled “Shame!” and Marchionne later said the man was protesting Fiat's plan to close a factory in Sicily. Another said her mother was killed by a defective Chrysler product.
Marchionne said Fiat loses money on every car built at the plant in Sicily. Marchionne said the company will survive this year by being cheap, saying it still has cash reserves of $5 billion to $6 billion.