In 2013 Fiat’s profits in Brazil, one of its biggest markets were hampered by the currency effects and government cuts on industry subsidies, but the new Fiat Chrysler Automobiles (FCA) says a new facility they are setting up there should aid its profit return after 2017.
The new FCA company, created in January by Chief Executive Sergio Marchionne in a $4.35 billion that set the stone for the seventh auto group in the world, forecast a lower profit for 2014 – hit by a massive slip in its Latin American market.
“I’m absolutely convinced that by 2017, which will be the first year of full production at the Pernambuco plant, we will return to making double digit margins in Brazil,” Marchionne told journalists at the Geneva auto show.
According to Marchionne, the new Pernambuco facility, set to start manufacturing in 2015, would produce cars better suited to the local market needs, like the small Jeep Renegade, which had its world premiere during the Geneva Motor Show.
In recent past, Brazil made up to a fifth of Fiat’s profit, which aided in balancing the European core market loses, but in the final quarter of 2013 the company had an 80% earnings fall as car sales incentives ended, input costs escalated and the currency effects hampered the region’s profitability.