Fiat Chrysler Automobiles aims to more than double its profit by 2018

Article by Christian Andrei, on May 8, 2014

Fiat Chrysler chief executive Sergio Marchionne has unveiled a five-year plan that entails investments of EUR55 billion ($76.6 billion) to transform Alfa Romeo, Maserati and Jeep into global brands. Fiat Chrysler expects the plan to more than double its earnings before interest and taxes from EUR3.5 billion in 2013 to EUR8.7 billion in 2018.

Among Marchionne’s targets is increasing the group’s annual deliveries by 61 percent to 7 million vehicles in 2018. His plan also entails expanding model offerings and production capacity at Alfa Romeo, Maserati and Jeep to transform into global nameplates.

"Today we bring all the various pieces of the mosaic together," Marchionne said, adding that the new business plan represents a major break with the tradition of the past. The business plan is considered as material in Marchionne's bid to turn Fiat into a global company large enough to challenge the biggest carmakers in the world after fully acquiring Chrysler Group in January.

Both VW and Toyota are expecting to sell more than 10 million units this year. Reaching the 7 million sales figure should catapult Fiat Chrysler into one of the largest carmakers in the world. Fiat Chrysler will focus on Alfa Romeo, investing EUR5 billion in five to introduce eight new vehicles and hike deliveries more than fivefold.

Alfa Romeo is considered as potent enough to boost Fiat Chrysler’s profit by commanding higher prices than volume models with the Chrysler, Dodge or Fiat badges -- just like the Audi does for VW. Alfa, which will develop new rwd and fwd vehicles, targets to hike deliveries from 74,000 last year to 400,000 in 2018.

The marque will still assemble its models in Italy, with an eye to launch the new vehicles at the end of 2015. As part of the plan, Alfa will drop the current Mito compact.

On the other hand, Maserati – armed with over EUR2 billion in investment budget -- will aim to hike annual deliveries more than fourfold by 2018 to 75,000 and more than triple revenue to over EUR6 billion.

It will also eye to expand its model lineup to six vehicles, including the Alfieri sports car. Jeep, meanwhile, targets more than double deliveries by 2018 to 1.9 million SUVs and increase it global network to 6,023 by 2018.

The brand also targets to build at 10 sites in six countries. The Fiat and Chrysler nameplates also eye to posts deliveries 1.9 million and 800,000 million, respectively, by 2018.

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