Group to return to profitability before 2019.
Sergio Marchionne’s scheduled retirement from the Fiat-Chrysler automotive group next year might be the light at the end of the tunnel for some. Many will remember him as the man that’s forcing Ferrari to build an SUV, or as the chap who’s left Lancia on life-support as it were, or the driving-force behind Maserati’s heinous Levante (which, admittedly, is selling well).
But for those who get their kicks looking at cash flow and profitability, he’ll be remembered as the exec who came from outside the industry and saved the Chrysler Group from bankruptcy.
Ahead of his retirement as the CEO of the Fiat-Chrysler conglomerate, the company is reporting very healthy numbers, in a trend that’s expected to continue towards the end of the year and effectively cancel the debt that the Fiat Group took on when it bought over Chrysler back in 2009.
In the first quarter of 2018, the company has seen a 5% increase in production over the same period the year earlier, as well as a similar raise in operating profit, which now rests at €1.6-billion (or $2.56-billion). Further, FCA reports a reduction of current debt to €1.3-billion ($2.08-billion) which puts it on the right heading to trounce its debt by the beginning of the fourth quarter.
And like a bonus of sorts, FCA says they’ll generate about €4-billion ($6.4-billion) in cash by the end of 2018. We wonder if the company will be granting Marchionne a parting gift…
FCA’s leaner operations bodes well for the company, as its American peers are doing the same. Ford has recently announced a massive culling of its home-market lineup, with only the Mustang and Focus Active set to soldier on unaffected. General Motors also completed a handover of its Opel and Vauxhall brands to French PSA Groupe last year.
Moving forwards, the company is expected to remove diesel mills from its marques, boosting efficiencies and dropping the average CO2 emissions for the company’s products. While thus far unconfirmed, it’s likely that FCA will make this move public in the coming months, perhaps during FCA’s mid-term plan announcement in June.
Stay tuned to CarShowroom for more updates as they come.
