Fiat Chrysler Automobile N.V. finished the third quarter with record earnings both in North America and globally as production turned around from the steep decline brought on by the pandemic during the first half of the year.
The company reported an adjusted net profit of 1.5 billion euros, or $1.8 billion, an increase of 773% with Industrial free cash flows of 6.7 billion euros, or $7.9 billion, an increase of 281%, reversing the drain on working capital during the first six months of 2020. Revenue dropped 6% to 25.8 billion euros, or $30.3 billion, and the improvement in profitability reflected the company efforts to reduce costs and boost efficiency.
“This was a remarkable quarter for our group,” FCA CEO Mike Manley told analysts during a conference call. It was the company’s North American operations that led the way to the new high-water mark, posting double-digit margins of 13.8% thanks to strong pricing and product mix, FCA executives noted. Overall, the company’s margin was 8.8 percent.
The company was profitable not only in North America and Europe but also in Latin America, which has been a difficult region for carmakers over the past couple of years, FCA executives said.
“Our record results were driven by our team’s tremendous performance in North America. During the quarter, we unveiled ‘white-space’ products across many brands; launched the next chapter for our storied Maserati brand; confirmed our market leadership in Latin America; and continued the rapid pace of our global investments in electrification,” Manley said.
Manley noted, despite the pandemic, “Once again, our team has proven its extraordinary resilience and creativity, and, as we close in on the merger to create Stellantis, we are stronger and more focused than ever on our mission to deliver great value for all our stakeholders.”
In North America, FCA said the continuing consumer demand for Ram and Jeep vehicles, coupled with a disciplined approach on incentives and operational costs, generated a record adjusted EBIT or earnings before interest and taxes of 2.5 billion euros, $2.9 billion, and the aforementioned 13.8% margin.
Retail market share in the U.S. remained strong at 12.3%, while dealer orders stayed strong entering the final months of the year. FCA also unveiled three all-new vehicles to evolve and expand the Ram and Jeep portfolios, led by the Ram 1500 TRX pickup.
Manley touched on the long-awaited Grand Wagoneer saying that it marks FCA’s return to the luxury SUV segment; and, the Jeep Wrangler PHEV 4xe would lead the charge of the brand’s electrified vehicles as the most capable, technologically advanced and eco-friendly Wrangler ever.
In Europe and the Middle East and Africa, FCA posted market share gains in the European Union and United Kingdom for both passenger cars and LCVs and pricing began to improve. In addition, shipments to dealers began for the all-new full electric Fiat 500 and plug-in hybrid versions of the Jeep Renegade and Compass.
In Latin America, FCA maintained market-leadership, reaching an 18.0% share for the quarter with growth in key markets, driven by strong demand for the all-new Fiat Strada, the best-selling vehicle in Brazil for September. Maserati hosted its “MMXX: Time to be Audacious” event in September, which was designed to kickstart the brand, where it unveiled the all-new MC20 super sports car, as well as presented its plans to renew the entire product portfolio during the next four years. That new line-up is slated to include several new electrified options.
Manley also told analysts during the conference call that he expects to remain with the company after the merger with PSA is compete at the end of the first quarter of 2021. Completion of the merger will lead to the creation of Stellantis. Manley, however, isn’t expected to sit on the new company’s board of directors.