MILAN/DETROIT (Bloomberg) -- Sergio Marchionne had what he called a "once in a lifetime" moment in 2009 when President Barack Obama selected Fiat S.p.A. to save Chrysler Group.
As CEO of both automakers, Marchionne may now be having flashbacks as the Italian automaker now comes to depend on Chrysler.
The previously bankrupt U.S. company, which became majority owned by Fiat this year, is now helping to support its parent, as the European debt crisis depresses sales.
Chrysler is due to outpace Fiat's operating profit by 87 percent in the second half and the gap will likely continue in 2012, according to a Bloomberg News survey of analysts.
"Fiat would be very vulnerable now without Chrysler, with few industrial and financial options on its hands," said Emanuele Vizzini, chief investment officer at Investitori Sgr in Milan.
While the revitalization of Chrysler offers Fiat a cushion for Italy's downturn, Marchionne's turnaround of the U.S. company has deepened Fiat's troubles in Europe.
With the U.S. unit taking the majority of available development and management resources, Fiat has been left with aging models and eroding market share, putting Italy's largest manufacturer at the mercy of historically volatile Chrysler earnings.
"Long-term, neither Fiat nor Chrysler would have made it on their own," Marchionne said on Oct. 7 in Montreal. "Fiat was too small and too handicapped by an inadequate business model in Europe to have any hope of a future."
Profit predictions
Chrysler may post earnings before interest, taxes and one- time items, of 864 million euros ($1.18 billion) in the second half of 2011, compared with 462 million euros from Fiat's traditional operations, including profit from the Ferrari and Maserati brands, according to the average estimates of six analysts.
Trading profit for Chrysler, which was consolidated into Fiat results from June, may reach 1.91 billion euros next year, 77 percent more than Fiat's 1.08 billion euros. The turnaround at Chrysler hasn't helped Marchionne win over investors to his plan to create a global auto group to rival Volkswagen AG. The shares have fallen 40 percent in the last three months, the second-worst performer in the Bloomberg European autos index after France's PSA/Peugeot-Citroen.
"If Fiat is depending upon Chrysler, that's a bad bet because Chrysler is still a question mark," said Gerald Meyers, a business professor at the University of Michigan in Ann Arbor, Mich. "It will be two to three years before we know whether Chrysler is going to even be successful, much less sustainable."
Showing posts with label Fiat News. Show all posts
Showing posts with label Fiat News. Show all posts
Thursday, October 13, 2011
Wednesday, October 5, 2011
Fiat will build a 'baby' Jeep and Fiat derivative in Italy
TURIN -- Fiat will build a "baby" Jeep in Italy to sell in Europe and possibly also the United States, two company sources told Automotive News Europe.
The Jeep will be smaller than the brand's current entry SUVs, the Patriot and Compass. The model will be produced in Fiat's home plant of Mirafiori in Turin, alongside a similar vehicle for Fiat brand that will replace the Sedici and an Alfa Romeo subcompact car for sale in Europe and North America.
Fiat had initially planned to build in Mirafiori the replacement for the Jeep Compass and Patriot and an Alfa SUV that would have shared systems and components with the Jeep model.
The change of strategy implies that the single model to replace the Patriot and Compass and its Alfa sibling will be manufactured in the United States. Jeep currently builds the Patriot and Compass in Belvidere, Illinois.
Fiat declined to give details on which models will be built in Mirafiori as part of a refurbishment of the factory, but the automaker is developing smaller models to meet an increasing demand downsized vehicles, especially in Europe.
In a statement issued on Monday, Fiat, which controls 53.5 percent of Chrysler Group, said it will remodel Mirafiori to build the most updated version of one of its three main architectures on which different nameplates for its various brands will be produced.
Development of the manufacturing infrastructure will begin in 2012 and production of the first nameplate, a Jeep SUV, is expected in the second half of 2013, it said.
The architecture to be installed in Mirafiori is internally called SUSW. It is a wider, U.S.-compliant version of Fiat's European Small architecture, which will debut next spring on two small minivans that Fiat will produce in Serbia to replace the Idea and Multipla models.
Fiat's group executive council made the production decisions for Mirafiori at meetings on Friday and Saturday, reversing a plan first announced in December 2010 to install in Mirafiori the bigger CUSW architecture.
CUSW is a wider, U.S. compliant version of Fiat's European Compact architecture that debuted last year on the Alfa Giulietta compact hatchback.
The first model to use the CUSW architecture will be a Dodge compact sedan that will replace the Caliber and will be unveiled in January at the Detroit auto show.
Mirafiori currently builds the Alfa MiTo 3-door subcompact, as well as the Fiat Idea and Lancia Musa small minivans.
The Jeep will be smaller than the brand's current entry SUVs, the Patriot and Compass. The model will be produced in Fiat's home plant of Mirafiori in Turin, alongside a similar vehicle for Fiat brand that will replace the Sedici and an Alfa Romeo subcompact car for sale in Europe and North America.
Fiat had initially planned to build in Mirafiori the replacement for the Jeep Compass and Patriot and an Alfa SUV that would have shared systems and components with the Jeep model.
The change of strategy implies that the single model to replace the Patriot and Compass and its Alfa sibling will be manufactured in the United States. Jeep currently builds the Patriot and Compass in Belvidere, Illinois.
Fiat declined to give details on which models will be built in Mirafiori as part of a refurbishment of the factory, but the automaker is developing smaller models to meet an increasing demand downsized vehicles, especially in Europe.
In a statement issued on Monday, Fiat, which controls 53.5 percent of Chrysler Group, said it will remodel Mirafiori to build the most updated version of one of its three main architectures on which different nameplates for its various brands will be produced.
Development of the manufacturing infrastructure will begin in 2012 and production of the first nameplate, a Jeep SUV, is expected in the second half of 2013, it said.
The architecture to be installed in Mirafiori is internally called SUSW. It is a wider, U.S.-compliant version of Fiat's European Small architecture, which will debut next spring on two small minivans that Fiat will produce in Serbia to replace the Idea and Multipla models.
Fiat's group executive council made the production decisions for Mirafiori at meetings on Friday and Saturday, reversing a plan first announced in December 2010 to install in Mirafiori the bigger CUSW architecture.
CUSW is a wider, U.S. compliant version of Fiat's European Compact architecture that debuted last year on the Alfa Giulietta compact hatchback.
The first model to use the CUSW architecture will be a Dodge compact sedan that will replace the Caliber and will be unveiled in January at the Detroit auto show.
Mirafiori currently builds the Alfa MiTo 3-door subcompact, as well as the Fiat Idea and Lancia Musa small minivans.
Friday, September 23, 2011
Fiat to reach 58.5% of Chrysler by year end
MILAN (Reuters) -- Fiat S.p.A. expects to raise its stake in Chrysler Group to 58.5 percent by the end of this year after it achieves a preset performance target, the company said. Fiat currently owns 53.5 percent of the U.S. carmaker.
The final test is the development of a Fiat-based car that can get 40 miles per gallon.
The group, which reiterated its critical mass target of around 6 million vehicles by 2014, confirmed its 2011 group guidance which includes revenues in excess of 58 billion euros ($79.5 billion) and liquidity of around 18 billion euros.
On Monday, Sergio Marchionne, who is CEO of both Fiat and Chrysler, said the group had enough liquidity to help it weather the financial crisis.
Like other industrial heavyweights, Fiat has been hit by worries that a global economic slowdown would hurt its revenues.
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20110920/COPY01/309209917/1400#ixzz1Yo0Y5a8X
The final test is the development of a Fiat-based car that can get 40 miles per gallon.
The group, which reiterated its critical mass target of around 6 million vehicles by 2014, confirmed its 2011 group guidance which includes revenues in excess of 58 billion euros ($79.5 billion) and liquidity of around 18 billion euros.
On Monday, Sergio Marchionne, who is CEO of both Fiat and Chrysler, said the group had enough liquidity to help it weather the financial crisis.
Like other industrial heavyweights, Fiat has been hit by worries that a global economic slowdown would hurt its revenues.
Read more: http://www.autonews.com/apps/pbcs.dll/article?AID=/20110920/COPY01/309209917/1400#ixzz1Yo0Y5a8X
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