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Fiat Profits Plunge 55%

CEO Marchionne points to runaway incentives costs.

by on Jul.30, 2014

FCA CEO Sergio Marchionne said the automaker needed to have great results in the next two quarters.

Fiat says its second-quarter profits plunged 55% as the maker’s U.S. partner Chrysler struggled to move old product with new incentives, while the Fiat side of the company dealt with a slowdown in South America.

Fiat, which expects to complete its takeover of the U.S. maker in October, earned a net profit of 197 million Euros, or $264 million, for the three-month period ending on June 30, compared with 435 million Euros a year before. On an EBIT – or earnings before interest and taxes – basis, the numbers dipped to 961 million Euros, or $1.3 billion, from 1.1 billion Euros a year earlier.

Insight!

“We had a crappy first quarter, a halfway decent second, and we need to have outstanding quarters in the third and fourth,” Sergio Marchionne, CEO of both Fiat and Chrysler, said bluntly during a conference call. (more…)

Superstorm Adds Tailwind as November Sales Surge

No fiscal cliff for automakers.

by on Dec.03, 2012

VW -- which is getting ready to launch the new Beetle Convertible -- had its best November since 1973.

While Superstorm Sandy might have taken the wind out of the auto industry’s momentum in October, the storm’s aftermath appears to be have given sales a strong tailwind in November.

Analysts now estimate the industry could have gained as much as 100,000 sales last month that had been postponed because of the massive East Coast storm. And demand also appears to be picking up as motorists race to replace vehicles damaged or destroyed during the disastrous storm.

With consumers in a generally upbeat mood – reflected in strong Black Friday sales – preliminary estimates suggest November may have set an industry peak, with demand running as high as 15.1 million on an annualized basis.

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While General Motors reported a relatively modest 3% increase for the month, Nissan’s luxury brand Infiniti posted a 41.2% year-over-year gain. And Volkswagen had its best November since 1973. Other gainers included Toyota, jumping 17.2%; Ford, up 6%; Chrysler picking up 14% — with its Fiat brand jumping 123% — and the Nissan brand up 9.8%.

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Fiat Could Close Two Plants if U.S. Return Fails

Marchionne confirms Alfa still coming to the States.

by on Feb.27, 2012

Fiat's revival in the U.S. -- as well as its operations in Italy -- could depend on the reception Americans give to the Alfa Romeo 4C.

Despite a slow start, Fiat is still betting it can stage a successful return to the U.S. market – or else, warns CEO Sergio Marchionne.  The alternative would force the closure of two of the maker’s Italian assembly plants.

The good news for Fiat is that most of its plants outside Europe – and those operated by its American partner Chrysler – are operating at full speed struggling to keep up with demand as the global economy recovers. The problem is Europe, where a weak economy has depressed the automotive market and the only way to justify keeping Fiat’s five remaining plants in Italy open is to build up exports.

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But demand in the U.S. for the maker’s little Fiat 500 sedan barely reached half the initial 50,000-unit target last year and, during a media roundtable last month, Marchionne said he doesn’t expect to see it push much higher than 30,000 in North American this year.  But some analysts think even that will be a stretch and warn Fiat’s attempt to rebuild its U.S. distribution network will fail.

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New Product Should Help Fiat Overcome Initial Setbacks

J.Lo campaign paid off despite controversy, Fiat officials insist.

by on Jan.19, 2012

JLo's ads for Fiat took plenty of criticism - but increased brand awareness substantially.

There’s an old adage that there’s no such thing as bad publicity.  Just spell the name right.  That might be a matter of debate if you’re running for president, but it appears to be a valid contention for Fiat, which has been struggling to build momentum for its return to the U.S. market after a two decade absence.

Despite the controversy over the maker’s first national TV ads, featuring Jennifer Lopez, Fiat officials insist the campaign paid off, helping build awareness among potential buyers just as the Italian brand is preparing to roll out an assortment of new products.

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The line-up has been limited to variations of the initial Fiat 500 minicar – the performance-oriented Abarth edition set to hit showrooms in March – with a battery version to follow – but a new 5-door hatchback is in the works, along with yet another product that will markedly expand the Fiat brand’s range of offerings.

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Fiat Sales Target Cut in Half

Marchionne may “shift resources” from Italy to Detroit.

by on Jan.09, 2012

Chrysler and Fiat were "incredibly naive" in their sales forecasts, admitted Marchionne.

Chrysler is sharply scaling back its plans for the U.S. roll-out of the Italian Fiat brand following an unexpectedly slow launch last year, but Sergio Marchionne, who serves as CEO of both sides of the trans-Atlantic Chrysler-Fiat alliance, insists that the shortfall does not mean the Italian brand has failed in its bid to return to the U.S. market after a decades-long absence.

In a roundtable session with reporters during the 2012 North American International Auto Show, Marchionne said he expects to cut by roughly half the number of cars Fiat expects to sell in the U.S. until it can better establish itself with additional products beyond the pint-sized Fiat 500 that debuted a little over a year ago — admitting the initial forecasts were “incredibly naive.”

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In a wide-ranging conversation, the Canadian-educated executive also noted that given the ongoing problems with Europe’s economy – as well as resistance to change by Italian unions — he is given serious thought to moving more of Fiat’s headquarters operations to the U.S.

The one thing Marchionne said he has “not a single doubt about,” 30 months after Fiat helped pull Chrysler out of bankruptcy, is that “Fiat needs Chrysler as much as Chrysler needs Fiat.”

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Laura Soave, Fiat’s U.S. Brand Boss Ousted

Falls victim to sluggish sales.

by on Nov.22, 2011

Former Fiat marketing chief Laura Soave with the 500C during its New York Auto Show launch in April.

Automotive veteran Laura Soave has been forced out of her post as head of Fiat in the U.S. as the Chrysler Group LLC shook up the marketing effort behind the tiny Fiat 500 which has been suffering from sluggish sales since its public launch late last year.

Timothy Kuniskis, a veteran Chrysler Group marketing executive, was named to head of the Fiat Brand for North America, replacing Soave, who led the return of the Fiat brand for nearly two years. Soave, a veteran of top marketing jobs at both Volkswagen and GM “left the company to pursue other interests,” Chrysler said in a statement.

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In his new role, Kuniskis, will serve as Director for both the Chrysler Brand and Fiat Brand Product Marketing. That includes managing Fiat Brand sales, marketing, dealer network and service.

“Tim brings broad expertise and leadership in dealer operations and marketing where he has been already working with the team to shape the direction of the Fiat Brand,” said Sergio Marchionne, Chairman and CEO, Chrysler Group LLC, who personally made the announcement of the change in management.

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Fiat Turns to Gucci as 500 Falls Short in U.S.

Maker to add high-style model of minicar.

by on Aug.17, 2011

Two Italian icons come together as Fiat launches the latest version of its minicar, the 500 Gucci edition.

Fiat’s latest version of the little 500 minicar will make its debut on the runway rather than the auto show stage, the high-style Gucci edition debuting on September 8th during New York’s annual Fashion Week, a week ahead of the annual Frankfurt Motor Show where many of the maker’s other new product will be unveiled.

Attracting fashionistas will be critical for the Italian automaker which is in the midst of its re-launch in a U.S. market it had abandoned two decades earlier.  But despite the upcoming introduction of yet another version of the Fiat 500, investors are growing concerned that the maker’s American revival isn’t going as well as planned.

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Fiat shares fell by as much as 6% in Italy on Tuesday, reflecting mounting concerns about the sales shortfall for the 500 in the States.  Through the end of July, American motorists had purchased just 11,500 of the cars, making it increasingly unlikely Fiat can hit its 50,000 target for 2011.

Launched earlier this year in coupe form, Fiat revealed the convertible version of the minicar at the April New York Auto Show and will shortly add the Fiat 500 by Gucci, the most stylish – but also the most expensive version of the 4-seater yet.

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Chrysler/Fiat Could See Revenues Surge to $140 bil by 2014

Chrysler IPO could be delayed a year, Marchionne advises Fiat shareholders.

by on Mar.30, 2011

Fiat/Chrysler CEO Sergio Marchionne.

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.

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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.”

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Bucking Trends, Chrysler Builds A Broader Brand Portfolio

Fiat to meet with 600 potential new dealers.

by on Aug.13, 2010

Fiat will debut with the basic 500, then add models like this electric car. But can Chrysler support five different brands?

American automakers have been downsizing, especially when it comes to brands.

General Motors abandoned four of its eight North American marques as it emerged from bankruptcy, last year, and Ford Motor announced, earlier this Summer, that it would write off its struggling Mercury division after years of dithering over its role in the company.

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Global News!

Chrysler was one of the first to downsize its divisional tally, doing away with the once-powerful Plymouth brand, back in 1999.  So why is the smallest and most troubled of Detroit’s Big Three suddenly moving in the opposite direction?  Despite the near-collapse of its sales and market share since it began discussing the possibility of bankruptcy, in 2008, Chrysler is actually expanding its brand count, with a major launch due for late this year.

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