Fiat expects first quarter earnings to drop as the US auto market cannot fully balance the loss in the European market.
Fiat CEO Sergio Marchionne said the automaker will keep its full-year target for growth in trading profit as it expects to make up for the decline in Europe in the first three months of the year.
“This won’t be a great quarter, but the important thing is that we’re confirming our 2013 targets,” Marchionne said, adding that “There’s no certainty when Europe’s sales crisis will end.”
Marchionne relies on Fiat’s US brand, Chrysler, to keep earnings up while he works at ending losses for Fiat in Europe, which has surpassed 700 million euro ($912 million) in 2012. If its hasn’t been for Chrysler, Fiat would have reported a 1.04 billion-euro loss in 2012, and this year it plans to increase trading profit to 4.5 billion euro from 3.81 billion euro in 2012.
Marchionne’s turnaround plan includes the introduction of 16 upscale vehicles, among which a small Jeep SUV, an Alfa Romeo SUV and six Maserati luxury vehicles. Although demand for Jeep vehicles continue to increase in the US, the automaker still confronts with ‘a volume gap,’ as plants keep stopping production to retool for the new models, said Marchionne.