Fiat Chrysler Automobiles signaled for its Milan-listed shares a drop to a 10-week low this Thursday, a day only after its CEO, Sergio Marchionne, asked for a large-scale industry consolidation.
To meet the increased demands for cleaner and safer vehicles, Marchionne renewed his appeal for decreasing the numbers of those involved in the global auto sector as to support the massive capital investment needed to meet the above mentioned requests.
Sources staying anonymous stated for Reuters that Marchionne was hoping in early April to get a deal to cover for FCA’s weaknesses but that he is struggling when it comes to finding a partner to do so.
This week, after FCA released weaker-than expected sales results for the first quarter of the year, Marchionne said that the purpose of a presentation FCA held this Wednesday was not to put the company for sale though.
Analyst at Evercore ISI, Arndt Ellinghorst, made a bold comment that “Marchionne is a shrewd operator and rightly investors have been asking what the purpose of yesterday’s presentation was. The answer is simple; he is looking to force a marriage for FCA.”
The stock for FCA fell 5.7% on Thursday with losses for the last two sessions depriving the automaker’s market capitalization of not less than $2.1 billion. Marchionne talked about the choice of consolidation and that it was not “a matter of life or death for FCA”, which led to analysts finding this reassuring, but also taking into account that the process might take longer than expected. They also believe that the best option for FCA would be a partnership with one of the brand’s Detroit collaborators but expressed doubts there would be any willing partners up for that.
By Gabriela Florea