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.
