Following VW dieselgate, FCA’s Marchionne believes industry consolidation is even more important

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Fiat Chrysler Automobiles NV chief executive officer Sergio Marchionne believes Germany’s Volkswagen AG and its massive diesel scandal have showed the world that industry-wide consolidation is desperately needed to lower costs. Marchionne, the outspoken chief executive of FCA and chairman of its soon to become independent luxury sports car maker Ferrari, said Fiat Chrysler will have a leading role in that consolidation and would still primarily partner with General Motors. He was talking on the sidelines of the initial public offering of the Italian-American company’s treasured Ferrari division. Taking Ferrari down the independence road would also help FCA become leaner as the proceeds would be used to repay some debt – turning the company into an even more promising partner. But so far both General Motors and other carmakers have rejected the proposals from the third largest US automaker and the seventh biggest in the world. Marchionne, which was surrounded by Ferrari supercars outside the New York Stock Exchange believes the entire automotive industry would “collectively pay the price” of the VW dieselgate scandal due to rising costs from emissions regulations compliance. “The analysis about the excess use of capital is still valid today” and needs to be addressed, he added. “Whether it is GM or some other solution going forward, it doesn’t really matter.” Regulators in the US, Europe and all over the world are looking into stricter emissions standards and testing procedures following VW’s admitted fitting of illegal software in 11 million vehicle sold worldwide since 2009. Via Bloomberg