Fiat Chrysler is Safe in Europe but Challenges Remain
It is the first time in Europe since 2007, that Fiat Chrysler Automobiles has generated a profit in the fourth quarter. Retooling of the idled factories in Italy, in order to export the Jeep Renegade small sport utility and other vehicles to the United States has proved beneficial for the company. The strategy has got a lift due to the fall of the euro against the dollar.
On Wednesday, the company's stock closed down 0.2 % at 11.56 Euros. Last year, FCA registered an increase of more than 60% in share price. The plan to spin off luxury unit Ferrari and Chrysler buyout helped in providing a boost to the company.
In 2013, Healthy sales of Jeep sport utilities and Ram pickups contributed only half of the company's overall profits and revenues.
For the payment of FCA's product renaissance, the profits need to spin from its North America operations. In North America, FCA has decided to spend less to launch new models.
During a conference call, chief executive of Sergio Marchionne said, "In 2015 ... we should see black numbers across all regions". He added that this year, recovery should be seen in Europe.
For the development of new Maserati luxury cars, sporty Alfa Romeos and Jeeps, the company will expend a capital of as much as 9.5 billion euros ($10.77 billion) in this year, said FCA.
In North America, 4% operating profit margins lag behind the Ford Motor Co. (F. N) and General Motors Co. (GM. N). Due to this, the company was under pressure in the recent quarters.
Richard Palmer, FCA financial director, said that in 2015, the operating profit margins of the company are expected to improve due to the lower expected recall costs and a more stable cost base in the last five years.
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