According to people familiar with company’s plans, Fiat Chrysler Automobiles NV is holding back the launching of several new models because of the China’s auto market moderate pace.
The carmakers predict a slower increase rate in auto sales ahead for China, saying the country’s economic direction will not drive the same aggressive growth as before. Some analysts are forecasting the economy will expand at the slowest pace since 1990. Therefore, many auto companies had to adjust downward their projections and to reconsider their future intentions. They all have to readjust to China’s auto market demands as it will remain the biggest in the world. Fiat Chrysler is already changing its plans and the Maserati Alfieri sports car and an Alfa Romeo sport utility vehicle are among models that will not be introduced next year as the company previously intended, said people familiar with the matter, who asked not to be identified because the discussions are private. Instead, Fiat Chrysler wants to focus on the improvement of its best-selling cars, the Giulietta and MiTo compacts, the sources said. They have also revealed that Chief Executive Officer Sergio Marchionne is to present some investment changes in January, pertaining to the next two years.
Marchionne’s original plan was to make a 48-billion-euro investment over five years, but the plan will definitely have to be readjusted partly because of China’s slowdown and mainly because the company will lose the reliable profits generated by Ferrari NV. “After selling off the family’s silver, Fiat is still loaded with debt as Alfa Romeo is far away from generating cash,” said Ian Fletcher, an analyst at IHS in London. “While it’s a rational decision to step back from some projects and concentrate resources on the most important ones, the carmaker isn’t getting nearer to its 2018 sales target” of selling 7 million cars.