Fiat eyes Chrysler profits in 2 years
MILAN: The head of Fiat is confident he will make US car maker Chrysler profitable within two years, he said in comments on Thursday, after rescuing it this year in a landmark redrawing of the world auto sector.
"I can see us making money in the next 24 months" on a pre-tax basis, Fiat director Sergio Marchionne, who is also now chief executive of Chrysler, was quoted as saying by the Canadian daily Globe and Mail.
The maverick executive turned around Fiat's flagging fortunes from 2005 before clinching the takeover of the bankrupt US company in June. He has said he will unveil his five-year strategy to turn around Chrysler on November 4.
He was confident of making Chrysler an earner "because we have decided not to flog inventory, because we're disciplined about production, because we're going to try not to discount the vehicles," he said in the newspaper.
The report also said Marchionne aimed to float the new Chrysler on the stock exchange "some time after 2010," in order to pay investors who hold a majority share in Chrysler.
Marchionne told reporters last month at the Frankfurt motor show that he had found a "whole pile of surprises" when he took control of the bankrupt US firm in June.
"We were surprised by how little had been done in 24 months," he said. "I am now confident that we have the right plan and people in place."
He said Fiat had no plans to invest any money in Chrysler, in which it took a 20 percent interest under June's deal.
Shares in Italian Fiat jumped last week after analysts at US investment bank Morgan Stanley doubled their price outlook for the stock, saying Fiat would benefit from its tie-up with Chrysler.
They said Chrysler would enable Fiat to reduce costs and that it opened the potential of new streams of sales revenue.
The restructuring of the number three US automaker was orchestrated and backed financially by the US and Canadian governments after the world economic crisis sped up a decline in the US auto industry.
Fiat's 20-percent stake in Chrysler Group may rise to 35 percent and eventually to a majority stake as long as targets mandated by the deal are achieved and US government funds are repaid.
Although Fiat has not provided any cash for the alliance, it is to bring new technology to help Chrysler develop more fuel-efficient vehicles needed in the US and other markets, and will use Chrysler's sales network in exchange.
The Italian automaker thus gains access to the vast US market and can get closer to the economies of scale which Marchionne has said are necessary to compete in the global automotive industry.