Earnings before interest, tax and exceptional items of Fiat Group, Chrysler’s majority shareholder, has dropped by 23% in the first quarter to €618 million, due to difficult economic conditions on the European market and the costs of launching new models in the United States. Analysts expected a profit of €691 million. Revenue decreased by 2.3% to €19.8 billion.
Asked about Fiat’s listing in New York, Sergio Marchionne, chief executive officer of both Fiat and Chrysler, said: “It’s the most efficient capital market I can get my hands on.” Marchionne said yesterday in a call with analysts and investors: “We need to clean up our act and move it on from here. We will get better as we move through 2013.”
Fiat confirmed the annual profit target of €4-4.5 billion, more than the €3.81 billion achieved in 2012, although the European market fell by 9.7% in the first three months and is about to have a negative trend in 2013 for the sixth consecutive year.
The European car manufacturer which wants to take a 41.5% stake in Chrysler is making the effort to eliminate losses in Europe, which last year exceeded €700 million.
Chrysler profits fell by 27% in the first quarter to €593 million due to lower sales of Jeeps, before the release of new models.
Fiat shares dropped 1.2 percent or 6 cents today on the Milan stock market. David Arnold, Credit Suisse auto analyst in London advised his clients that “Guidance is overly optimistic, given the weaker than expected start to the year in terms of trading profit, particularly in the case of Chrysler.”
The plan of Fiat to eliminate losses in Europe is based on the launch of 16 luxury vehicles including an Alfa Romeo SUV a Jeep branded SUV and six new models at the Maserati division.
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