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Fiat Chrysler CEO Sticks to 2014 Guidance

Fiat Chrysler CEO Sergio Marchionne said on Thursday he saw no reason at present to review the carmaker’s 2014 financial guidance despite tough European and Latin American markets, reported Reuters. After Fiat’s poor second-quarter results, analysts were widely expecting a cut in full-year guidance. For 2014, the auto group expects to raise operating profit, excluding ... Read More »

September 15, 2014
3 min to read


Fiat Chrysler CEO Sergio Marchionne said on Thursday he saw no reason at present to review the carmaker’s 2014 financial guidance despite tough European and Latin American markets, reported Reuters.

After Fiat’s poor second-quarter results, analysts were widely expecting a cut in full-year guidance. For 2014, the auto group expects to raise operating profit, excluding one-off items, by as much as 14 percent.

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“I have no (basis for) … suggesting I won’t (meet guidance),” Marchionne told reporters during an event in Balocco, northern Italy, adding that Fiat traditionally only reviewed its guidance once the third quarter was over.

“Europe is what it is, Latin America is having a rough patch. We are holding our own in Latin America. We do have a structural advantage on our competitors in Brazil because of our cost structure,” he said.

Marchionne said the third quarter should go well: “We are waiting for results for September, which is an important month. In America we are doing well.”

He reiterated the group had enough resources to fund its ambitious 5-year business plan and that a decision on any future capital raising will be taken in late October by the new board of recently merged Fiat Chrysler Automobiles N.V. (FCA) – formed after Italy’s Fiat took full control of its U.S. arm Chrysler.

FCA is due to list on Wall Street on Oct 13. The company has also submitted a request to list on the Italian bourse.

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Ratings agency Fitch on Thursday raised its outlook on the carmaker to ‘stable’ from ‘negative’ and confirmed Fiat’s ratings, saying the group’s profile had “strengthened, due to the increased integration of Chrysler into Fiat”.

“We expect integration to deepen further and to provide more synergies in the medium-term,” it said.

Fitch said it expected Fiat to refinance Chrysler’s debt in 2016, which would give it unrestricted access to capital resources of the U.S. unit and help finance its growth plans.

MORE FERRARIS

Marchionne is due to become the chairman of Ferrari after Luca Cordero di Montezemolo resigned on Wednesday after 23 years at the helm of the luxury carmaker. The resignation followed clashes over strategy and Formula One results with Marchionne.

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Montezemolo has wanted to keep Ferrari independent, while Marchionne has pushed to better integrate the business within Fiat to boost the group’s move into the premium end of the car market as it seeks to rival the likes of Volkswagen (VOWG_p.DE) and BMW (BMWG.DE).

“People should not underestimate the importance of Ferrari to the (Fiat) group. It is a big piece of what we are,” Marchionne said on Thursday.

He repeated that sales of Ferraris, currently capped at 7,000 vehicles a year to preserve exclusivity, could be raised gradually to keep up with demand from the super rich or the company would otherwise run the risk that “people will get tired of waiting … and will go buy something else”.

Despite a cap on sales, Ferrari’s first-half revenues rose 14.5 percent to 1.35 billion euros ($1.75 billion), while net profit rose nearly 10 percent. Ferrari deliveries are expected to increase by 5 percent this year, it said.

Marchionne has repeatedly excluded an initial public offering for Ferrari, but he said on Thursday the luxury carmaker was not crucial to FCA in the long term.

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“Do I think that they are essential to the configuration of FCA forever? The answer is no,” he said. “But they represent what I consider to be the best of what a carmaker can be.”

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