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

Are you a big fan of legendary boxer Mike Tyson, the former heavyweight world champion? Or are you a big fan of the iconic Ferrari F50? Either way, you will...
by - February 24, 2017
It seems that AM-RB 001 hypercar is not the only vehicle project that Aston Martin and Red Bull Racing has gone into. This time, don’t expect something as outlandish as...
by - February 24, 2017
The year 2018 marks the golden anniversary of Subaru of America. Of course, the company will celebrate 50 years of being at the helm of the brand’s crusade in North...
by - February 24, 2017
During car crashes and accidents, there are times that its occupants can’t get out easily. There are times when the only way to get out of that situation is to...
by - February 23, 2017
Could this be a special version of Ferrari’s much acclaimed LaFerrari? No matter how we look at it, the patent images for this sports car from Ferrari indicate its striking...
by - February 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