AMSTERDAM (Reuters) - Toyota (7203.T), Volkswagen (VOWG_p.DE) and Ford (F.N) are the only remaining potential merger candidates for Fiat Chrysler (FCHA.MI), since its attempt to join up with GM (GM.N) was rebuffed, Chief Executive Sergio Marchionne said on Friday.
Marchionne has long called for mergers of big players in the industry to help spread the costs of developing more technologically advanced cars that pollute less, but his preferred target GM has repeatedly refused to engage in talks.
“The door (on M&A) has never closed, the need to consolidate does not go away,” he said on the sidelines of a shareholder meeting in Amsterdam.
However, Ford promptly said it also has no interest in a tie-up with FCA.
“As we consistently have said, Ford has no plan or interest other than to continue to accelerate our One Ford plan, deliver product excellence and drive innovation in every part of our business,” the company said in an emailed statement.
Marchionne, whose term as chief executive at FCA is due to run out in 2018, said Korean carmakers were also among the big players in the industry and there would be sufficient synergies to justify a merger, but “the Koreans don’t get married”.
In the absence of a merger partner, Marchionne has been focusing his efforts on executing an ambitious investment plan centered on revamping its Jeep, Alfa Romeo and Maserati brands and eliminating FCA’s debt.
The CEO said he was open to the possibility of the company starting to pay dividends again before 2018 if the carmaker is first free of debt. FCA had net industrial debt of 5 billion euros at the end of 2015 and expects to be cash positive to the tune of 4-5 bln euros at the end of 2018.
Marchionne’s comments about industry consolidation follow a renewed pitch made for an alliance by FCA Chairman John Elkann a day earlier, who said a combination of FCA with one of the “big guys” could yield annual savings close to $10 billion.
“But you need two to tango and most of our competitors are busy with the great opportunities that technological disruption has to offer,” Elkann said in a letter to shareholders of Exor (EXOR.MI), referring to a focus on new developments such as car sharing and self-driving vehicles.
Exor is the investment vehicle through which Italy’s Agnelli family controls FCA.
Elkann said selling cars would still be a “massive industry” in 2030, by when new sales are expected to be worth $4 trillion, up from $2.75 trillion in last year.
“Boring old car makers need to figure out how to make this profitable,” he said.
Editing by David Clarke, Greg Mahlich