Fiat and Chrysler CEO calls for business to embrace overseas opportunities
CBI Annual Conference told that dependence on domestic consumption is 'pure folly'
Sergio Marchionne, the Fiat and Chrysler CEO, today
urged businesses to embrace the opportunity of working in
territories beyond their domestic market at the CBI Annual
Conference.
He told the conference: "To continue to rely on domestic consumption to revive an ailing economy is pure folly."
Mr Marchionne highlighted the importance of managing a sustainable manufacturing business, adding: "I doubt there is a single European player today that can make money on the strength of the European market alone."
His speech came on the day that the CBI, together with Ernst & Young, launched an exports report that identified the possibility of growing the UK economy by £20bn.
Taking his own company as an example, he said: "Fiat was too small, too dependent on the small car segments and too handicapped by the inadequate business model in Europe to have had any hope of a future".
By going into partnership with Chrysler both car companies grew their market - and became the fifth largest automobile manufacturer in the world. Mr Marchionne also stressed the importance of finding new markets in which they could succeed.
"That was how Fiat developed in Brazil. The outcome of that strategic choice is that Fiat has become the largest carmaker in the Brazilian market and for many years now has been viewed as a local player."
Mr Marchionne told the audience of over a thousand businesspeople and senior politicians that if Fiat were to have continued investing alone in Italy, "the risks would have been enormous: large expenditures that are not shared, insufficient volumes and high unit costs".
However, he also warned of the importance of keeping involved in the domestic market or risk an unbalanced economy.
"We saw this happen in Britain in the 1980s when a conscious choice was made to shift from a manufacturing to a more service-based economy.
"But this didn't just simply lead to a decline in the industrial base - the equilibrium of the entire economic system was undermined.
"I feel I can say these things to a British audience, because these realities have been accepted. The current government is acting with determination to remedy these issues and to revive the industrial sector with the conviction that a strong manufacturing base is central and essential to a solid and sustainable economy."
Read the full speech here (pdf)
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