FIAT lays out strategy to break-even in Europe by 2016
Plans to leverage traditional brands and optimize production capacity
2013/06/10
- Summary
- FIAT's plans: Brand strategies and moves in regional markets
- Restructuring production in European and non-European regions
- FIAT's model plans: FIAT 500 derivatives and products for luxury markets
- FIAT-Chrysler Group's financial performance
- Production Forecast by LMC Automotive: FIAT production forecast by country and by make
Summary
FIAT will commit itself to model development and enhancing production network tailored to luxury markets of high profit potential, aimed to reach break-even in European markets between 2015 and 2016.
To improve earning rates in European markets and maximize production capacities of its plants in Europe, FIAT will produce Alfa Romeo and Maserati in Italy and expand the product offering to compete in the high-end market. The company will expand production of export models for the U.S. market and also for the Asia Pacific market, a market with a potential of high growth.
As for the markets in Serbia and Poland characterized by cheaper labor, FIAT will produce the FIAT 500 Series and other low-priced compact cars.
In regions outside of Europe, FIAT will build a new plant in Brazil in 2014 at the earliest with an annual capacity of up to 200,000 units. In Mexico where the production of the FIAT 500 cars was transferred to Poland, FIAT will expand the production of the Chrysler-brand cars for the U.S. market. FIAT will restructure its local production and sales network in India and China.
FIAT-Chrysler's global unit sales in 2012 increased 6.1% year on year to 4.21 million units but the results in January-March quarter of 2013 fell 0.2% from the same quarter a year earlier to 1.02 million units. FIAT projects the total wholesale of the group (including Chrysler) to be 4.3—4.5 million units in 2013 and 4.6—4.8 million units in 2014.
LMC Automotive predicts the global sales of FIAT to decrease by 4.3%, to 1.95 million units in 2013. LMC Automotive states "most of the drop that FIAT Group is now enduring has come from the FIAT brand itself." However, positive growth starts from 2014, increasing 2.4% y/y and sales volume continues to expand to 2.73 million units by 2016.
Related Reports:
European OEM strategy: cost reduction and expansion beyond the EU (Apr. 2013)
North American International Auto Show 2013 (1) (Feb. 2013)
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