The head of the car giant Fiat has warned that the European motor industry is facing an outlook that is far from rosy.
Sergio Marchionne said car sales have fallen for five years running and many marques are fighting for survival.
Speaking after the ratings agency Moody’s downgraded Fiat’s credit-worthiness he told euronews in Brussels: “We have been very clear on the strategy that Fiat has put together in terms of dealing with what we consider to be an inevitable drop in the Italian market that we are experiencing this year. We have not seen levels like this in nearly 40 years. And so we knew that markets were going to come down and we knew that there will be a large impact on the volume in Europe for Fiat.”
Another ratings agency, S&P, said it would take six years for European car sales to regain pre-crisis levels. In the interim, companies are still producing them.
“There are too many car plants in Europe trying to deal with a shrinking demand,” Marchionne went on. “We can redirect some of this capacity for export markets, but fundamentally there are large numbers of plants across the European context which are today not being utilized.”
Fiat also owns the majority of Chrysler, and though analysts believe the Italians are benefiting from the US car maker, it might not be enough to see off the problems in Europe.