Newly merged Fiat Chrysler Automobiles has today a nine brand portfolio – one that the CEO intends to keep – while industry observers disagree, considering the automaker too stretched.
The automaker is a very interesting company – today, the brand new entity of Fiat Chrysler Automobiles NV has a Netherlands registration, considers its global headquarters to be London, has a primary New York stock exchange listing and a secondary one in Milan. All the while, Fiat’s operation would still be headed from Turin, Italy, as is the tradition, while Chrysler’s business would be run from the US.
So, no wonder analysts and observers say that CEO Sergio Marchionne has stretched a little too far its business – with the five-year business plan calling for double-digit and even triple-digit sales increases at eight of nine brands.
“If it was not for Brazil, where it is the No. 1 brand, Marchionne should simply kill the Fiat brand,” says Philippe Houchois, a London-based auto analyst at UBS.
“I still think it could be Dodge or Chrysler, but not Dodge and Chrysler,” contends Arndt Ellinghorst of consultancy International Strategy & Investment in London.
Marchionne argues that the new strategy already sacrificed two brands – Lancia and SRT. The first would be confined to Italy only sales and just one nameplate and the latter would act as a sub brand to Dodge.
The analysts argue that in the current state, the automaker could soon lack the proper cash to cater for all the investments needed to achieve the planned sales and operating profit for 2018.
Via Automotive News Europe