Though the U.S. half of the trans-Atlantic alliance may be still be struggling to turn itself around, Sergio Marchionne, CEO of both Chrysler and its partner Fiat, painted an upbeat picture for Italian shareholders, today, projecting that the two makers will boost revenues to 100 billion Euros – about $141 billion – by 2014.
The big bump will come on the Fiat side, said the Canadian-educated executive, with the Italian maker’s revenues expected to jump from 35.8 billion Euros, last year, to 64 billion, while Chrysler is projected to grow to 36 billion Euros. Marchionne has previously indicated his belief that Chrysler, which emerged from a brief bankruptcy nearly two years ago, will be turning a profit by then, as well.
But the chief executive also cautioned Fiat shareholders that he may have to go back on earlier plans to take Chrysler public again during the second half of 2011. During a question-and-answer session, Marchionne admitted, “I don’t know” if the long-discussed Chrysler IPO will happen this year or in 2012, stressing that the goal is to “be ready to be a public company again.”
The CEO has acknowledged closely watching how General Motors did during its own post-bankruptcy public offering. GM shares ultimately commanded $33 apiece, well above initial expectations, but in recent weeks that has dropped as low as $30.20 as investors fret about rising fuel prices and other concerns.
During the shareholders meeting, Marchionne underscored the benefits he expects the alliance to get by pairing Chrysler and Fiat brands, including the ability to expand both makers’ range of product offerings. Chrysler, meanwhile, is getting ready to press for new growth overseas, with new dealership agreements in development for emerging markets, such as Brazil.
Fiat took control of Chrysler – and was given a 20% stake in the troubled American maker – after the 2009 bankruptcy. Since then, the Italians have increased their stake to 25%, and Marchionne hopes that will reach 35% shortly, as his team meets a series of benchmarks, including the expansion of Chrysler’s global sales.
Ultimately, Fiat could raise its stake to 51% once it either pays off its government loans or finds alternate funding sources. Marchionne created a stir, earlier this year, when he complained about the high interest rate he is paying to the government, dubbing them “shyster loans.” Marchionne later apologized for the remark, which carries a tinge of anti-Semitism.
The 58-year-old Marchionne acknowledged that Fiat had a bit of a rough time, last year, sales declining 3.2%, largely due to the elimination of old car scrappage programs in Germany and Italy. But he projected that the new models developed with Chrysler should help recover lost share.
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