Fiat cuts its European losses in the fourth quarter, CEO Sergio Marchionne says

Article by Christian Andrei, on January 31, 2013

Fiat has cut its European losses in the fourth quarter, CEO Sergio Marchionne said before the company releases its official results. He said however, that Fiat's 2013 results in Europe won't be considerably different from 2012. He also confirmed that Fiat has set a target to break even in Europe in 2015 or 2016. Previously, Fiat had predicted a loss of 700 million euros a full-year 2012 in Europe.

Fiat posted a loss of 500 million euros in 2011 in Europe. In the third quarter of 2012, Fiat posted an operating loss in Europe of 219 million euros for its mass market brands. The new-car demand in Europe decreased to its lowest in 17 years in 2012. This left a small hope for mass market companies as they attempt to reduce excess factory capacity and aggressive discounting that affect their margins.

Marchionne said that by decreasing Fiat's losses in Europe, it will be able to achieve full-year earnings in line with forecasts. Bloomberg surveyed four analysts who predicted that Fiat is estimated to post a group trading profit of 941 million euros. One year ago, Fiat posted 765 million euros in trading profit.

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