During the recent conference call on first quarter earnings, the Fiat Chrysler officials reiterated their pledge for deeper cooperation among the major players in the auto industry, in a bid to bring more industry consolidation.
Fiat Chrysler Automobiles chief executive officer Sergio Marchionne has reiterated its long-running idea that the number of global automakers should go down – with his own company showing weakness caused by rising industry costs and shrinking earnings margins. Marchionne even had at hand a detailed presentation of the reasons why “large scale integrations are required” inside the automotive sector, needed to support the continuous increase of the massive capital investments triggered by the production of greener, safer automobiles. “The capital consumption of this industry is unsustainable,” commented the top executive. The rapidly changing landscape of the auto industry is one of the primary reasons for Marchionne’s call for deeper cooperation, as the auto field prepares to bring vehicles that emit less harmful emissions and could soon become entirely autonomous.
Additionally, analysts and industry experts believe FCA’s rally cry also comes from inherited weakness – the comapny has a massively ambitious five-year growth plan that would see it jump fivefold in terms of profit – but before that happens the seventh-biggest automaker in the world is fighting to reach the financial health of bigger rivals such as Toyota, Volkswagen Ag or General Motors. Marchionne did concede there are inherited barriers to combining massive players, including unions and political views, and if the industry rivals don’t heed his concerns he might go towards technology companies – such as Google or Apple. The latter are both searching for ways to enter the auto business by delivering alternative business patterns to the traditional auto purchase.