Chrysler to outpace Fiat’s operating profit by 87 percent in the second half of 2011

Article by Christian A., on October 12, 2011

The tables have turned. Previously bankrupt Chrysler is now helping out Fiat as sales drop due to the European debt crisis. Sergio Marchionne, the CEO of both Fiat and Chrysler, considers President Barack Obama’s decision in 2009 for Fiat to save Chrysler as a “once in a lifetime" moment in 2009. Fiat now comes to rely on Chrysler, which became majority owned by Fiat this year.

According to the analysts that Bloomberg surveyed, Chrysler is expected to outperform Fiat's operating profit by 87% in the second half and the gap is expected to continue in 2012.

Emanuele Vizzini, chief investment officer at Investitori Sgr in Milan, said that if Fiat didn’t have Chrysler, it would have been “very vulnerable” now since it doesn’t have plenty of industrial and financial options available to it. Marchionne's turnaround of Chrysler has made Fiat's troubles in Europe worse.

The U.S. unit is taking the majority of available development and management resources but Fiat is left with older models and a declining market share, making Fiat rely on Chrysler’s volatile earnings.

Last Oct. 7, Marchionne said that in the long-term, neither Fiat nor Chrysler would have made it on their own. He explained that Fiat doesn’t have much of a future as it is “too small and too handicapped by an inadequate business model in Europe.”

According to the average estimates of six analysts, Chrysler may have to post earnings before interest, taxes and one- time items, of 864 million euros ($1.18 billion) in the second half of 2011. On the other hand, Fiat's traditional operations, including profit from the Ferrari and Maserati brands amount to 462 million euros.

Topics: chrysler, fiat, profit

If you liked the article, share on:

Comments

Recommended

The primary suggestion of a 4x4 ute from French company Peugeot was first revealed in 2016. Fifteen months later, the production version is launched. Now, Peugeot is not shying away...
by - June 24, 2017
The new Jaguar E-Pace crossover will soon hold its official launch on July 13 and is expected to arrive at the showrooms by early next year. It couldn’t have come...
by - June 24, 2017
As prices of the original Shelby Cobra have skyrocketed into astronomical proportions, there are firms like Superformance that serve replicas to consumers who demand the same levels of performance at...
by - June 24, 2017
New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
In an interview involving Lamborghini CEO Stefano Domenicali and Automotive News, the topic about the Urus was thoroughly discussed. This super SUV is scheduled to make its debut later this...
by - June 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries