Fiat’s Sergio Marchionne Accuses Volkswagen of Waging Price War image

Fiat’s CEO Sergio Marchionne accused Volkswagen, its German rival, of having a too aggressive pricing strategy.

Sergio Marchionne accused Volkswagen of choosing an aggressive pricing strategy when European auto industry is already struggling with tough conditions.

“It’s a bloodbath of pricing and it’s a bloodbath on margins,” he was quoted as saying by the International Herald Tribune on Thursday, July 26th.

Marchionne who is Fiat CEO and also head of the US car maker Chrysler, demanded the European Commission to help the auto industry deal with its huge overcapacity problems.

“What they should do is coordinate a rationalization of the industry across the producing companies,” he said. “The ones that really have not acted on this are the French and the Germans, who have not taken out any capacity at all.”

Volkswagen’s European market share increased from 22.6% in the first half of 2011 to 23.9% in the same period this year, taking into consideration that groupwide sales decreased 1.5% and the market fell 6.8%. This week the European car makers’ results are expected to mirror the region’s debt crisis, with Renault, Fiat and PAS Peugeot Citroen struggling with Mediterranean sales.