Detroit: Fiat Chrysler is launching a breakneck global growth effort built around its upmarket Alfa Romeo, Jeep and Maserati brands, and CEO Sergio Marchionne pledged to stay five years - two more than previously disclosed - to see the plan through.
In a 10-hour, marathon presentation to financial analysts on Tuesday, Marchionne outlined a long-awaited business plan aimed at reviving the company`s historic carmaking names and persuading investors it can overcome high debt, an uncertain market and past missteps to close in on industry leaders such as Volkswagen AG and Toyota Motor Corp.
"Today is much more than a new chapter. We are writing an entire new book," Marchionne said in his opening remarks.
Amid sometimes sceptical questioning about the goal of boosting sales by 60 percent and increasing net profit five-fold by 2018, Marchionne shifted between quoting philosopher Friedrich Nietzsche and spouting financial ratios at the company`s U.S. regional headquarters.
Besides an aggressive, belated push into Asia, Marchionne promised to increase North American sales by half as Chrysler broadens its lineup and the embattled Dodge brand digs in.
The carmaker kept its options open to finance the plan, but ruled out a share issue or divestments. One of the options was a mandatory convertible bond, but no decision has been made.
Fiat Chrysler said it would invest billions of dollars to build new models and ramp up output, predicting sales would surge to almost 7 million vehicles by 2018 from 4.4 million last year - a target some analysts thought highly ambitious.
"It`s definitely a tall order, but I don`t think we ever expected anything less from Marchionne in terms of the ambition," said Exane-BNP Paribas analyst Stuart Pearson. "Even getting half or two-thirds of the way to those business plan targets would be a positive achievement industrially - it`s then a question of what investors are expecting and what`s already priced into the shares."
Fiat shares have risen 44 percent, outpacing a 5.4 percent gain for the broader sector, since the Italian company announced a Jan. 1 deal to take full control of Chrysler and create the world`s seventh-biggest carmaker. The stock closed 1.2 percent lower at 8.47 euros on Tuesday.
The group, preparing to move its main listing from Milan, Italy, to New York as soon as Oct. 1, hopes its combined clout and profitable U.S. business can overcome European losses and propel it into the major league.
At stake are thousands of jobs, particularly in Italy where Fiat Chrysler plans to make all of the new Alfa Romeo models.
First Published: Wednesday, May 07, 2014, 09:56