Fiat CEO to reduce 2014 targets to reflect current sales situation

Article by Anita Panait, on October 30, 2012

Sergio Marchionne, the chief executive of Fiat, is expected to revise his targets for 2014 when the Italian carmaker and its US subsidiary, Chrysler Group, release their results for the third quarter of 2012. Marchionne set a target in 2010 to sell 6 million cars annually by 2014, and he might not be able to say that he could achieve them during the release of results Tuesday.

According to analysts, Marchionne sales target will have to be reduced by around EUR15 billion ($19 billion). Giuseppe Berta, a professor at Bocconi University, remarked that Fiat’s CEO was too optimistic in 2010, noting that the carmaker and its Chrysler unit “can't grow by self-propulsion” to its six-million-car target. Fiat has said that losses in Europe are on course to reach EUR700 million, as the region is highly likely to post its biggest sales drop in almost two decades this year.

LMC Automotive quipped that it would be a challenge to achieve a quick turnaround since austerity measures in Europe are restraining demand to below pre-crisis levels until at least 2017. With this situation on hand, Marchionne will have to accept lower sales figures for 2012 than he originally anticipated.

According to a Bloomberg survey of 13 analysts, Fiat’s 2014 revenue, which includes sales figures from units Chrysler, Ferrari and Maserati, could be reduced to EUR89 billion, around EUR25 billion less than the 2010 forecast EUR104 billion. Fiat is also expected to fall short of its 2014 target by 1.6 million units, or 25 percent.

Researcher IHS Automotive is expecting Fiat to post 4.4 million units in sales in 2014 for the group, up from 4.1 million this year. HIS however expects auto industry to post a 1.4 percent decline in sales in Europe this year to around 917,000, in contrast to a 6.2 percent growth in North America to 2 million units.

Topics: fiat, ceo

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