By on April 2, 2014

marchionne

Should Sergio Marchionne’s Fiat Chrysler Automobiles be able to deliver on his expectations, the merged automaker will be able to move 6 million units annually, enabling FCA to become a player on the global stage.

The Detroit News reports Marchionne met before Fiat’s shareholders in the final meeting at the automaker’s Turin, Italy headquarters before FCA relocates to the Netherlands, stating what he expects out of FCA in the post-merger years to come:

By 2018, Fiat will be able to make more than 6 million cars. I don’t want to give any details of the plan, but we are going in that direction.

For 2014, Marchionne stated FCA aims to sell between 4.5 million and 4.6 million units on the strength of United States and Asia markets, collecting some $128 billion in revenues, and between $828.6 million and $1.1 billion in net profit. The goal of selling 6 million units has been an oft-mentioned one by Marchionne, who believes that the volumes necessary to achieve scale will only increase in the future.

Until then, his current goal is to have Chrysler and Fiat completely merged by the end of 2014, with a multi-year business plan to be presented in Detroit by May. Marchionne believes the new plan can be run “by purely financing on debt.”

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34 Comments on “Marchionne’s FCA Looks To Sell 6 Million Units...”


  • avatar
    mjz

    Must be all those Alfa Romeos they are planning to sell. Lol. Seriously, Jeep and Ram are doing well, now if they can get the car end going, they might be able to carry it off.

  • avatar
    bobman

    I think Sergio said FCA would have the capacity to build between 6 and 7 million cars by then. He also mentioned that it would be difficult to achieve 100% utilization, although, I’m sure, he would love to be able to say that he’s running at full capacity before retiring.

    A note to Sergio;
    You’ve been looking a little haggard in your most recent pictures. Take a month this spring and travel south. Enjoy the fresh foods and air in Campania, Calabria and Sicily. Relax a little and put some color back into your face. Quit smoking. “Fate a cura”. This sh!t will be here when you get back, you can take care of it then.

    • 0 avatar
      Lorenzo

      Sergio can’t take any time off. He structured Fiat and Chrysler so that he’s the cornerstone at the top of the pyramid, with everyone answering to him. That gave him job security, but it doesn’t make for a seamless transition when he leaves. He may have set himself up as the Louis XV of the auto business: “After me, the deluge.”

      • 0 avatar
        bobman

        I don’t think a direct replacement would be possible. I can’t see anyone having the type of control he commands. You know, when the negotiations were going on regarding the Chrysler takeover (2009), Radner wanted Sergio. I don’t think he cared who he worked for. Fiat was just a passenger in Sergio’ wagon. It’s going to be a difficult transition and, I believe, the Agnellis are very aware of that.

      • 0 avatar

        That’s always the case when you have overwhelming characters at the helm of companies. What happens many times is that the immediate successor is a short lived figure that paves the way for change, but because of that is fought tooth and nail. If he or she is competent, he eases the way for the second guy in the succession who can then carry on.

        It’s difficult at Fiat,but it will be at Ford and Renault-Nissan. The good thing for Fiat and Ford is that the family has shown to be attentive and willing to do what’s necessary. In this case a family business sometimes is better. I think Renault-Nissan will have a much harder time when succession comes as all the bridge building done by Ghosn could quickly come unraveled.

  • avatar
    olddavid

    His avuncular, sweater wearing “aw shucks” act is wearing thin. Methinks bobman has hit the nail on the head.

  • avatar
    highdesertcat

    Sergio has surprised lot of people AND the global auto industry. His Canadian-style of management is very different from that of his European, American and Asian counterparts. He is a credit to his adopted country.

    Too many experts have given Sergio up for dead or otherwise underestimated him, with the reversal of the Canadian plant expansion tax-break demands being but the latest.

    If I were a betting man, I believe Fiatsler shareholders can bank on Sergio, and make a lot of money in the process.

    • 0 avatar
      RobertRyan

      @HDC Agreed. Globally he has Ford in his sights and if he gets his 6 million he will be competitive with them.

      • 0 avatar
        highdesertcat

        RobertRyan, barring any unforeseen debacle, Sergio will get his 6 million, and then some. I’m sure he has plans to expand the markets for Fiatsler products to include places where no one has gone before.

        It wouldn’t surprise me if he targets developing markets with high-priced Fiatsler merchandise in order to increase brand awareness. I’m thinking Australia, New Zealand, South Africa and possibly Brazil, all markets that have a lot of consumer confidence (VIX) and consumers flush with money; you know, like China.

        This does not mean however that Sergio can totally put the “Fix It Again Tony” syndrome behind him in America, but I’m sure he’ll be careful to market Chrysler-branded products at the forefront in North America while pushing Fiat-branded products in developing markets. They may be the same goods, like Grand Cherokee in America or Masserati elsewhere for the same JGC. (Just an example)

        Just the Grand Cherokee alone is having a few glitches, further complicated by the recall for brakes for the 2011-2014 WK2 models. And the 4-banger Cherokee is not something I would call a good powertrain match-up. The 300 is getting extremely long in the tooth but the RAM is picking up the slack. So there still remains a little bit of polishing to do to make Fiatsler sparkle.

        • 0 avatar
          RobertRyan

          HDC,
          ” The 300 is getting extremely long in the tooth”
          It shares the so so poor build quality with the Wrangler(The Wrangler has bad on road dynamics as well). The Grand Cherokee has had technical problems here. FCA is considered as Jeep in Australia, FIAT/Lancia cars almost invisible. Same with 300c/Wrangler. Grand Cherokee 3 Litre diesel biggest seller with some 6.4 Hemi’s being sold.

          • 0 avatar
            highdesertcat

            RobertRyan, the 300 was quite advanced in its day because it used the old Mercedes suspension architecture.

            When it came out, that new 300 gave an excellent ride and better than average handling, as compared to the competition at that time.

            But since then Buick, Avalon and Taurus have actually improved their cushy and quiet ride and balanced handling to the point where they surpass the 300.

            The 300 design is also dated and the utilization of the interior passenger cabin space is no match for that of its competition.

            The Wrangler always has been a niche vehicle and is in a class all by itself.

            I have not seen even one diesel Grand Cherokee in my area. Lots of SRT8 and 5.7′s, though.

          • 0 avatar
            ExPatBrit

            “The Wrangler has bad on road dynamics as well!”

            Wind noise no powered hardtop, storage space and 3rd row seating .

            When they notice that, those Wrangler owners will be pissed!

          • 0 avatar
            RobertRyan

            HDC
            I know several Chrysler vehicles were built on Mercedes platforms,including I think the Grand Cherokee.

          • 0 avatar
            RobertRyan

            @ExPatBrit
            Reason the Grand Cherokee is very popular with Caravan towers

          • 0 avatar
            highdesertcat

            RobertRyan, yes, the current WK2 Grand Cherokee shares many similarities with the Mercedes ML-series. I bought a 2012 for my wife in Nov 2011 and it has been a flawless ride for her, with only the occasional hiccup, like the TPMS or Check Engine light coming on.

            However, that said, I am loathe to recommend the 2014 Grand Cherokee these since all three of my wife’s sisters traded their Highlanders for a 2014 Grand Cherokee in March or April of 2013 and have had nothing but problems with them.

            They were motivated enough by their bad ownership experience to write them up on blog.cars dot com/kicking tires under Grand Cherokee Recalls.

            So for me, we’re going back to the tried and the true and will trade our Grand Cherokee for a 2015 or 2016 Sequoia, more than likely the final vehicle my wife will drive into retirement.

    • 0 avatar

      Hey highdesertcat! Agreed, Marchionne, Ghosn and Mullaly have got to be the top execs in the business today. Ghosn has already done his joining of the hips of Renault-Nissan, Mullaly avoided the worst for Ford and his One Ford policy is being twitched and delivering results. Marchionne is a work in progress. His exploits so far have been amazing and though some of the public is impatient for new product, he’s cleaning things up behind the scenes and laying the groundwork for future, sustainable growth. I guess the jury will give its final verdict in the next couple of years.

      • 0 avatar
        highdesertcat

        Marcelo, your analysis and assessment is, as always, succinct and right on the money. That’s the way I see it too.

        Sergio does have some big hurdles to overcome in the form of the worldwide reputation of Fiat and the North American reputation of the former Chrysler and their crap cars.

        But Sergio also has a lot going for him with the treasure trove of vehicles that currently keep Fiatsler alive, namely the Jeep Grand Cherokee (worldwide) and the RAM pickup truck (primarily in North America and Northern Mexico bordering the US).

        If Sergio plays his cards right, he will probably get his 6 million, and more, within 3-5 years, unless something truly major causes a distraction caused by Chrysler-quality lapses, or bad PR like UAW workers smokin’ and tokin’ on the job. Hey, It’s happened. No reason to think it isn’t going on today. Nobody got caught. Yet.

        Just look at the debacle that GM is going through now after it became evident, and documents were found supporting, that GM engaged in misinformation, disinformation and obfuscation about several potential problems in their vehicles, and that a Department of the US government aided and abetted this deceit by failing to enforce the laws as they were written about unsafe vehicles. Where’s Ralph Nader when we need him? Some of these GM products were unsafe at any speed.

        Were this to happen to Fiatsler because of Chrysler cars, Sergio may be in an untenable position if he wants to get to that 6 million figure.

        Only time will tell, but I am rooting for Sergio even though our next SUV will be a Sequoia.

        • 0 avatar

          Yep, like always can’t say I disagree, though we do have differing views as to the relative merits of some cars. The important thing for “il americano” and FCA is that almost 17 million Americans will be buying new cars this year and a great many of them (more than at any other time in recent history) will be choosing FCA products. One can only cross one’s fingers and hope the cars are ready because if they are the future is bright for Fiat-Chrysler.

          • 0 avatar
            highdesertcat

            Yeah, that’s really good news for America and everyone in the global auto business trying to sell in North America. This rising tide raises all boats, so to speak.

            In my area, things are looking really, really good, economy wise. With America’s political situation pretty much at a standstill a lot more people are willing to stick themselves into debt for buying a new house or car, OR, for those who have money, are willing to take the money from under their mattresses and put it to use by pumping it into the economy.

            We recently jacked up the rents on all our rental homes and apartments in anticipation of the new mandatory minimum-wage increase that is widely expected to pass before Election Day in November, so the money is really rolling in now since our expenses have remained the same, so far.

            Hope things are just as bright for you in Brazil.

  • avatar
    gtrslngr

    Ahhh .. the delusional dreams of Stronzetto [ look it up ] Marchionne . He never fails to surpass even his most ludicrous prognosticating despite the fact that Alfa Romeo / FIAT / Maserati / Ferrari … and Dodge/Chrysler sales [ other than JEEPs and RAMs ] are in the toilet in the US – UK – EU – China – Russia and Brazil

    Ya gotta in a strange sense sort of love this guy . He never fails to out do himself when it comes to the negative . Stronzetto Marchionne and his ever present Madness . Always good for a bit of entertainment … unless of course you work for FCA or god forbid have stock in the company that is

    • 0 avatar
      bball40dtw

      I love the Alfa targets they always set. This was the year they were supposed to hit 500,000 units. Their best year in the last ten years was 160,000 units.

    • 0 avatar
      PenguinBoy

      “and Dodge/Chrysler sales [ other than JEEPs and RAMs ] are in the toilet”

      Really?? They seem to be doing just fine in North America, #1 year to date in Canada and #4 year to date in the US.

      http://www.goodcarbadcar.net/2014/04/canada-auto-sales-brand-rankings-march-2014-sales-figures.html

      http://www.goodcarbadcar.net/2014/04/usa-auto-sales-brand-rankings-march-2014-sales-figures.html

      “other than JEEPs and RAMs” I don’t see how you can exclude a company’s hot selling products when assessing their sales – it would be like saying “Honda sales are in the toilet [other than Civic, Accord, and CRV]”

      I don’t own a Chrysler product myself, but I have plenty of seat time in some of their recent products, and the improvements since 2011 are impressive, as is the sales growth achieved by the company under Marchionne.

      • 0 avatar

        They’re also doing just fine in Brazil where they remain the leader and though they have fallen, along with the rest of the market, they’ve fallen less than the market as a whole, so they’ve gained.

        In China, they had zero sales a decade ago so wherever they are now is an improvement. Seems like in India they have managed to maintain a presence and with small CUVs being all the rage there and their smalls CUVs just being readied, they could be gaining fast.

        In North America you outlined the situation.

        Yes, in the dump they are.

  • avatar
    romismak

    Well last year they sold 4.43m i think, so where he wants those additional numbers to get, yes rebounding Europe – but Fiat is not such big player, today it´s medium player not big not small, in NAFTA region Chrysler is strong and will get bigger, but not by much, in Latin America Fiat is alredy loosing share to asian groups, in China new JV for Fiat brand and Jeep brand, yes big opportunity, but still i can´t see where they want those additional numbers to get.

    2013 sales

    4.42m

    EMEA-Europe, Turkey, Russia, Middle east and Africa 875thousand PC + 250thousand LCV´s – 1.125m – they can go up to 1.3m i think with rebounding Europe, still growing Africa and GCC countries, but for example Turkey where Fiat is huge they start loosing to rivals in future.

    NAFTA – 2.147m – Mexico in 2013 was down, in future Hyundai will sell their cars directly so those hyundai´s badged as Dodge you can write off, and also competition will be more brutal with everybody having plants there, so i can´t see big upside in MExico, in Canada Chrysler alredy is doing 40+ months streak in market that is growing by little and is at peak level, so they can´t get much in Canada with their big market share right now, so in MExico+Canada they can´t really gain much

    in US there is still potential so i say from 1.8m in 2013 to 2.2m in few years in new US peak level being optimistic so let´s say NAFTA +410Thousand

    Latin America – 933thousands – Argentina was huge last year now market problems and competition so let´s say Argentina peaked, Brazil, well FIAT is No.1 there and last year they lost to competition, they can grow with market in next years but still it won´t be easy with everybody trying to get peace of cake away from Fiat and VW, so let´say Brazil +200t, in rest of Latin America basically Dodge and Jeep brands are as strong if not bigger than FIAT don´t see potential there, let´s say Latin America +200thousand

    China-India if they can deliver here so good, but don´t see it, yes JV for FIAT and JEEP brands should do fine, but still with everybody being in China they can´t go to far in volume, let´say China +250 thousand with Jeep factory there and Fiat having more models

    Now i include Alfa and Maserati being more volume premium brands +150thousand

    That´s +1.2m if i am optimistic – together 4.42m +1.2m that´s over 5.6m and i can´t see them getting over it

    • 0 avatar
      PenguinBoy

      “By 2018, Fiat will be able to make more than 6 million cars” – it sounds like he is planning to have the capacity to *build* 6 MM cars, not like he is expecting to *sell* 6 MM cars.

      Based on your analysis, it sounds like 5.6 MM units is achievable; if he plans for a capacity of 6 MM units that is about 93% utilization of his production capacity, which sounds pretty good to me.

      • 0 avatar
        romismak

        Well if capacity is issue than i think they can restart some of old ITA factories, they have huge capacity in Italy only, Fiat at his peak few decades ago was huge in Italy, also they will logically gain capacity with new JV plants in China + Brazil, but why he is talking about capacity makes no point, i mean capacity can be made easily but what point to have huge factory able to produce over half million cars annualy if you can´t sell them to people

    • 0 avatar

      Great analysis romsiak, thanks! I agree though I think they could pick up a point or 2 in Europe pretty fast. They are strong in Southern Europe, when and if S. Europe returns, they will “naturally” grow.

      In Brazil they have fallen, but the rest of the market has fallen more. All efforts here are in finishing the Goiana plant. When that comes on-line they’ll have added a lot of capacity and will expand their portfolio in South America. It will include a small CUV that would gain market share, something along the lines of a Viaggio which could finally give them a fighter in that market segment, besides a small city car aimed directly at the VW Up. They could even find space to make here the 500, one of the only cars in Brazil now that has no inventory.

      I think growing a little in Europe, gaining in the US, protecting their position in Brazil, gaining even if a little in China and India, they could get the 6 million.

      How are they going in Eastern Europe and Russia? Any chance of growth there? And Middle East and North Africa? Seems like those markets could grow fast in the next couple of years.

      • 0 avatar
        romismak

        I don´t know about Brazil, but last year BRAZ has fallen and FIAt too, we will see how much can Brazil grow, but i am not so optimistic about FIAt defending their share of 20% +, with more players, chinese coming there and everything – similar to Turkey where Fiat is huge i think used to be No.1 brand – Fiat, Renault, Ford big 3 in Turkey having plants there and now import brand VW is outselling them all and Fiat is relyying mostly on LCV´s in Turkey now, i think they are just 4th or 5th in passenger car market there.

        China has potential, but everyone is there, investing billions every year, so really it will be tough. FIAT with more models can be succesfull volume brand – but it will take years and never will be among biggest, Jeep is alredy succesfull in China with plant there Jeep should be big but still it´s specific brand SUV brand so question is how far they can go in total numbers. Fiat in Russia is joke, Jeep can be sucesfull there in future, Fiat maybe with LCV´s but as volume brand there are alredy other big automakers with their volume brands. Middle East and Africa – Jeep has potential but still it will take years, still don´t see them getting over that 5.5m until 2020 at least

        • 0 avatar

          Yes, it’s a tough market out there for sure. LCVs are important for them. With the Kombi gone, they stand to get more sales of those in Brazil. Though the market as a whole last year, commercial vehicles was up. That seems to me to be an indication that Brazil won’t disintegrate this year despite all the rhetoric you’ll hear because of the election.

          As to their position in the Brazilian market, I was surprised they held on like they did. They fell, but others fell more. The Grand Siena is selling surprisingly well, the Uno is holding on fine. The Palio sold more than I expected too. Bravo, Linea, Idea sell though hey need the Viaggio here fast. The Strada is a phenomenom.

          I think the Chinese have been curbed. They are not really growing all that fast. Hyundai seems to have hit the ceiling with the HB20 as has Toyota with Etios. The one growing in the market right now is GM gaining on everybody with Onix. The Up will surely be a hit for VW but it remains to be seen if that is at the expense of the market as a whole or just the Gol.

          Like I said, in Brazil, 2014 will be a wait and see year. 2015 is key for them and based on performance then, I think we’ll be able to see if they can manage to keep their 20%. Like you, I doubt it, but the question is, will it fall to 18, 15 or 10%?

          If you look over the history of sales in Brazil, the market is marked by stability. Even with the addition of new players, new cars, the market leaders are all basically the same. it’ll sure be interesting to watch.

          • 0 avatar
            romismak

            Well my point about Brazil was that if market for light vehicles will go up from those 3.55m to say 4.5m- how long it will take and how much will Fiat gain with their 1/5 of market they should gain those 200thousands but i don´t think so with others having new plants – new models and so on, yes chinese are not growing thanks to duties, they need to produce in BRA not just import anymore. Chevy is doing fine, last year they actually sold more than in 2012, VW was down even harder than Fiat, so i gues VW will also do their homework and improove, hold their market share, with Toyota, Hyundai, chinese, PSA, Renault-Nissan having plants, new products it will be really tough for Fiat and VW in future to had their 20% share like before

            But you are more informated about this i think based on your name you are from South America?

          • 0 avatar

            Yes, I’m Brazilian so I have an insider view, :). The Chinese have been kept out due to duties, but also market perception. They are just not there yet. The market here punishes too. You can’t just foist stuff on us if some of the things we value aren’t there. Ask Toyota with their Etios or even Hyundai. In the first case, it’s too ugly, in the HB20s case it’s just too overpriced and delivers the same as others.

            Btw, where are you from?

          • 0 avatar
            28-Cars-Later

            “The Chinese have been kept out due to duties”

            Duty on Chinese produced goods? That’s crazy talk…

          • 0 avatar
            romismak

            I am replying here, i don´t have Reply option on your last response , I´m from Slovakia, i thought you are Brazilian, but wasn´t sure that´s why i wrote South America to not make mistake about your natiaonality – i remember you writing something about Brazil few weeks ago so that´s why i though that when you have infos you should be from there. I like checking infos about automakers and sales stats from biggest markets and BRAZ is one of them always checking ANFAVEA website but obviously don´t have clue what people prefer like you do it´s nice to know some insides from someone who actually can see what people on the streets drive and want to buy and so on, so thanks for infos

          • 0 avatar

            Hey romismak! It’ll always be a pleasure to help you out and fill you in with any additional info you need. You’ll get some info filtered by my perspective but that’s only natural. I don’t know if you’ve noticed, but I’ve written many an article on the Brazilian market for TTAC and you can get a feel for our market there. Anyways, send Derek an e-mail and I’m sure he’ll forward it to me if you feel the need.


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