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Marchionne: China Poses Threat to Big Car Makers

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Chinese auto makers have future plans to export autos to other parts of the world and pose an “enormous” risk to established car makers based in Europe and North America, Sergio Marchionne, the chief executive of Fiat SpA and Chrysler Group LLC, said on Wednesday.

Speaking at an auto industry conference here in northern Michigan, Mr. Marchionne said Western auto makers can’t count on dramatic growth in Asia to drive future prosperity, but also must make their North American and European operations more competitive.

Chinese auto makers currently “produce almost entirely for the enormous domestic market, but their future plans for the export market are significant,” he said. “Even assuming China were to export only 10% of what it produces, the risk we face in our home markets is enormous,” Mr. Marchionne added.

He added that auto makers like Fiat and Chrysler “cannot afford to be unprepared for the ascent of China” and “need to continue to work to make our industrial base more competitive, because the day of reckoning is inevitably coming.”

For many car companies, it has “become fashionable” to count on growth from Asian subsidiaries and ventures to provide “a natural offset to the underperforming nature of our European and American businesses.”

Still, he added, auto makers and labor unions in North America and Europe must “establish the foundations for a lasting renaissance of the automotive industry.”

Mr. Marchionne said he will change Chrysler’s board by month’s end and said he could retire sometime after 2015.

“There is going to be a guy after me, I guarantee you,” Mr. Marchionne said. “Don’t focus on the date, I would focus on the process.”

Via: WallStreetJournal.

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