02.04.2011 MARCHIONNE SEES SALES UP THIS YEAR AND REVENUES RISING SHARPLY IN THE SLIGHTLY LONGER TERM

FIAT 500EV

The Fiat 500EV will be built at the Toluca, Mexico plant that assembles the American market Fiat 500 and will go on sale stateside next year. Exports to Europe of the 500EV are scheduled to get underway in 2013.

Fiat and Chrysler CEO Sergio Marchionne has made a number of claims this week relating to future rises in both group's revenues, improvements in European sales volumes this year, plans to tackle the Russian market alone and the expected losses on the Fiat 500 EV.

Marchionne told shareholders in Turin this week that he sees the combined revenues of Fiat and Chrysler Group to hit 100 billion euros ($141 billion) by 2014. He has already previously forecast that revenues at Fiat will increase from 35.8 billion last year to 64 billion by 2014, leaving the Chrysler Group to pitch in a third of the income.

At the same time Marchionne also claims that the slew of rebadged Chrysler Group models, as well as the new B-segment Lancia Ypsilon, will stem Fiat's declining European market share this year and cause an upsurge in the second half of the year. As well as the new-generation Ypsilon, which goes on sale next month, Dodge's Journey has been rebadged as a Fiat (Freemont) while Chrysler's 200 (Sebring) and 300 will also be rebadged as Lancia models, with the latter set to be the first out of the blocks and reviving the Thema nametag.

Although the European new car market is expected to remain difficult this year, Marchionne said: "Nevertheless, we project our market share will increase as a result of the new model releases programmed for the second half." It leaves Marchionne pretty much alone amongst European carmakers in predicting a year-on-year improvement in sales during 2012.

Marchionne also hinted that an IPO for the Chrysler Group might be put off until 2012 if the conditions aren't favourable. While its rivals GM and Ford both turned in profits last year, the Chrysler Group posted a US$652 million loss as it paddled away from the Chapter 11 bankruptcy process. Fiat currently owns 25 percent of the Chrysler Group and can take this to 35 percent with relative ease. It will be seen in coming months if the raft of recently refreshed models including Chrysler's 200 (Sebring), 300 and Town & Country, as well as Dodge's Charger and Jeep's Compass and Patriot, can all reconnect with customers and push sales and profits upwards.

Fiat also reiterated its commitment to go it alone in Russia this week after two failed attempts to hook up with a domestic partner. The most recent prospective joint venture talks with Sollers ended in February with the Russian carmaker instead turning to Ford. Fiat then said it would plod on alone and on Wednesday Marchionne reaffirmed this plan: "We are strongly committed to Russia," the Bloomberg news agency reported the Fiat CEO as saying. "We are evaluating a partnership with Russian companies." Quoting unnamed sources familiar with the matter, Bloomberg  said that Fiat had applied to the Russian government-underwritten development bank, Vneshekonombank, to finance the project.

Meanwhile Marchionne said yesterday that Chrysler Group will lose US$10,000 on each Fiat 5000EV (Electric Vehicle) it sells. The Fiat 500EV will be built at the Toluca, Mexico plant that assembles the American market Fiat 500 and will go on sale stateside next year. Exports to Europe of the 500EV are scheduled to get underway in 2013. "The economics of EVs simply don't work," Marchionne told Automotive News. "On the 500 that will begin selling in the US next year, we will lose over US$10,000 (per car) despite the retail price being three times higher (than the standard petrol engined version)." With the U.S. market Fiat 500 starting at US$15,500 this means the 500EV is likely to retail at over US$45,000. Marchionne has previously hinted that the 500EV would start at a much lower price and that the cost of batteries would likely account for half the windscreen price. By comparison, on the U.S. market pricing of Chevrolet's new Volt starts at around US$40,000 and Toyota's popular plug-in hybrid Prius kicks off at US$23,000. EV is another trend that Fiat has missed and it is now playing catch-up.
 

2011 Interfuture Media/Italiaspeed