The one-millionth fourth-generation Fiat Panda rolled off the production lines at the G. Vico Pomigliano d'Arco plant near Naples, Italy, during the fourth quarter of last year; this car has been the undisputed number one in Italy since 2012 and the best-seller in Europe in its segment since 2016.

Fiat Chrysler Automobiles (FCA) has reported earnings for the final quarter of last year and the full year with total global deliveries and revenues remaining almost unchanged on the previous year but with improved margins across all the business divisions leading to a record profit while debt was also significantly reduced.

FCA’s worldwide combined shipments of vehicles came in 4,740,000 units for last year, almost unchanged on the previous year, up by just twenty thousand units, while revenues at 111 billion euros for 2017 was also in line with 2016, down eight four thousand euros as all segments registered continued profitability.

Group margins were up to 6.4%, improving across all the units and that saw adjusted net profit double to 3.8 billion euros, including tax changes. Net industrial debut improved by 2.2 billion euros to 2.4 billion euros, undercutting analysts forecasts.

Those performances were driven by North America (Canada, the U.S. and Mexico) which now accounts for more that seventy percent of FCA’s revenues and 2,401,000 vehicles were delivered in the NAFTA region although that was down by 3% year-on-year as its U.S. market share fell to 11.7%.

Profits however grew substantially thanks to margins up by almost a full percentage point to 8% on the U.S. market as its strategy of adjusting the mix towards SUVs and pickup trucks at the expense of passenger sedans drove that profitability. The decrease in shipments was mainly due to lower fleet volumes in the U.S., primarily for Jeep and discontinued vehicles, but it was partially offset by increased shipments for the Ram and Alfa Romeo brands, Jeep Grand Cherokee and the new Jeep Compass.

Net revenues decreased 4% to 66 billion euros mainly due to lower shipments and negative foreign exchange translation effects, partially offset by a more favorable vehicle and channel mix while the adjusted EBIT increase was primarily due to that favorable mix, further purchasing efficiencies, lower warranty and advertising costs but partially offset by lower volumes, higher product costs for content enhancements, higher industrial costs due to capacity realignment plan and negative foreign exchange effects.

European market share (counting the EU28 plus the EFTA signatories) for passenger cars was up slightly to 6.6% but down slightly to 11.4% for light commercial vehicles. That increase in shipments for cars was primarily attributable to the Jeep Compass, Alfa Romeo’s Giulia and Stelvio, as well as the Fiat Tipo family. A total of 1,365,000 vehicles were shipped.

In Europe net revenues came in at 22.7 billion euros while adjusted EBIT of 735 million euros was up by more than one third and that increase was primarily from the higher volumes, a more positive vehicle mix and manufacturing and purchasing efficiencies but that was partially offset by negative net pricing, including weakness of the UK pound, and higher depreciation and amortisation costs related to new vehicles. Fiat also celebrated the one million fourth generation Panda to come off the production line during the final quarter of last year.

In South America FCA’s market share in Brazil contracted mildly to 17.5%, but was up slightly in Argentina to 12.2%. An increase in shipments – they were up 14% to 521,000 units – was mainly due to Fiat’s Mobi and Argo as well as Jeep’s Compass but was partially offset by the discontinuation of the Fiat Palio family.

Adjusted EBIT improved by 146 million euros to 151 million euros as net revenues in South America increased 29% to 8 billion euros due to higher shipments, favorable vehicle mix, higher net pricing, as well as positive foreign exchange translation. Adjusted EBIT increased mainly as a result of higher net revenues and lower Brazilian indirect taxes, partially offset by increased product costs primarily due to input cost inflation and depreciation and amortisation related to new vehicles

In the final quarter of last year FCA deconsolidated its Venezuelan operations at a loss of 42 million euros.

In the Asia-Pacific region FCA continued to struggle to gain traction with combined shipments of 290,000 vehicles and consolidated shipments of just 85,000 vehicles. The higher combined shipments data includes an increase in Jeep production through FCA’s joint venture in China while consolidated shipments decreased slightly due to reductions in Jeep imports to China but was partially offset by the launch of Alfa Romeo in the region and Jeep Compass production getting underway in India. Net revenues down were down 11% to 3.3 billion euros due to a fall in consolidated shipments and negative foreign exchange effects while an increase in adjusted EBIT was primarily due to insurance recoveries related to the Tianjin, China, port explosions and a more favorable mix but partially offset by the launch costs for Alfa Romeo and negative foreign exchange transaction effects.

Maserati enjoyed a good year just gone as its shipments rose to 51,00 thousand units, up 22% on 2016. The higher shipments – which came across all markets – was driven by a 131% increase in global sales of the Levante SUV but was partially offset by lower sales of the Ghibli and Quattroporte.

Maserati’s revenues were up 17% to 4.1 billion euros and that increase was primarily due to higher volumes, partially offset by negative foreign exchange effects. Adjusted EBIT was up an impressive 65% to 560 million euros with the increase mainly due to those much higher volumes as well as new industrial cost efficiencies but partially offset by negative foreign exchange effects.

The components sector – namely Magneti Marelli, Commau and Teksid – saw net revenues increase for a second straight year, in 2017 they were up 5% to 10.1 billion euros, and that reflected the higher volumes that were achieved across all three businesses. Adjusted EBIT which was up 20% to 536 million euros, increased mainly due to those higher volumes as well as from the industrial efficiencies that resulted from World Class Manufacturing initiatives at Magneti Marelli but partially offset by an unfavorable mix and net pricing. Strong Adjusted EBIT and margin growth for Magneti Marelli led the way thanks to increases in its lighting and chassis business lines.

FCA also picked up 49 million euros last year after it sold its long held publishing business.

FCA however has lowered its guidance for this year, suggesting profits and cash on hand will be at the bottom end of previously announced expectations. It now expected income of 125 billion euros this year, down from a former target of 136 billion euros while EBIT profits will be 8.7 billion euros, at the bottom end of its previous forecast of 8.7-9.8 billion euros, and adjusted net profit at 5 billion euros. It expects to cancel all debt this year and generate 4 billion euros in net cash.

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