European Auto Makers' Lobby Re-Elects Fiat Chief as President

By Matthew Curtin

Sergio Marchionne, the outspoken chief executive of Italian auto maker Fiat Spa (F.MI) and its U.S. unit Chrysler LLC, will serve another one-year term as the president of the European auto manufacturers' association despite a rocky previous 12 months in the role as the region's auto-making crisis worsens.

ACEA, as the association is known, said Friday its board of directors had re-elected Mr. Marchionne, whose top priorities will be pushing for a "meaningful and supportive European Union-wide industrial policy" for the car industry while continuing to make the case for "fair and balanced trade agreements."

In the past year, Mr. Marchionne's call for coordinated factory closures as part of an EU response to tackle the chronic over-capacity in the car industry with met resistance from Germany whose auto makers are benefiting from strong product line-ups and booming exports of premium cars. The disagreement led to a brief spat between Mr. Marchionne and executives at Volkswagen AG (VOW.XE), Europe's leading auto maker by sales.

In contrast to Volkswagen, Europe's other mass market auto makers--including Fiat, French rival PSA Peugeot-Citroen (UG.FR) and the European units of General Motors Co. (GM) and Ford Motors Co. (F)--are in various stages of shuttering capacity to stem their heavy losses in the region. Registrations of new cars in the EU have fallen 7.3% in the first 10 months of the year.

As ACEA president, Mr. Marchionne has also been a vocal critic of the EU's free-trade pact with South Korea, whose auto makers have taken a small but fast-growing share of the EU car market. His criticism of the pact gained some political support this year in France, which called unsuccessfully for the deal to be revised by Brussels.

The EU is in the early stages of preparing talks over a free-trade agreement with Japan, a far bigger producer of mass-market and premium cars.

"Independent studies have shown that this deal is a one-way street as far as the automobile industry is concerned," said Ivan Hodac, ACEA's secretary general said last week. "This has already been our experience with the free trade agreement with South Korea which entered into force last year."

ACEA cites research by Deloitte which estimates that an increase in EU imports from Japan wouldn't be offset by an increase in European exports to Japan. EU car exports could go up by a mere 7,800 units by 2020, compared with additional Japanese exports to the EU amounting to 443,000 units.

Write to Matthew Curtin at [e-mail]

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