Chrysler saves Fiat profits
POSITIVE RESULTS: The Fiat-Chrysler alliance reached another milestone as group president, Sergio Marchionne (pictured here at the unveiling of the Fiat Panda) reported profits for the second quarter of 2012.
Fiat reported a net profit of $440-million (R3.634-billion) for the second quarter of 2012 on Tuesday, but said it would have lost nearly $303 million (R2.502-billion) without the contribution of the Chrysler Group.
Chairman and CEO Sergio Marchionne told analysts and reporters during a conference call on Tuesday, July 31: "The European market continues to show signs of weakness. It is highly unlikely that this market will recover in 2012."
The Detroit News reports Fiat has also been stung by a dramatic decline in European sales, particularly in its home market, Italy. Sales there have fallen to levels not seen since 1979.
HEAVILY DEPENDENT ON EUROPE
But losses in the European operation were offset by Chrysler’s strong performance in its domestic market. According to Detroit News, Chrysler reported a second-quarter profit of $436 million (R3.601-billion).
Fiat said it was profitable in the rest of the world as well, but remains heavily dependent on Europe where its shipments region dropped to approximately 301 000 units — a 13% decline over the same period in 2011.
Fiat's losses in Europe widened to $170 million (R1.404-billion), while its revenue in the region dropped 10% to about $6 billion (R49.6-billion), Detroit News reported.
Latin America is another key market for Fiat and while overall figures were down, performance in the region was boosted thanks to a Brazilian government stimulus programme launched in May.
Marchionne said: "We've seen significant ramp-up in daily volumes in Brazil. We're very much encouraged by what is happening in Latin America."
Although it remains a minor player in the Asia-Pacific region, Fiat also posted big gains there: shipments increased by 73% to approximately 26 000 units and revenue increased by 87% to $938 million (R7.748-billion).
Fiat's high-performance luxury brands, Ferrari and Maserati, posted positive results for the quarter, too.