Fiat’s CEO Sergio Marchionne said the automaker plans to cut losses in the European market this year and expects sales to recover during the second half.
“We are dragging the bottom, but it’s the bottom” for industry sales in the region”, said Sergio Marchionne. “Pricing is not great, and that continues to be the most troublesome part of the European market.”
Marchionne plans to make Fiat’s brands profitable in Europe before merging the Italian automaker with Chrysler. Fiat predicted a 700 million-euro ($935 million) loss in Europe for 2012 and said that sales will break even no sooner than 2015. Analysts expect the auto market in Europe to contract for the sixth consecutive year in 2013, after in 2012 it reached its lowest level since 1995.
Mike Tyndall, a London-based analyst at Barclays, said: “The small-cars segment is going to be challenging, so life is going to remain tough for Fiat in 2013.” It will be “a year of transition, and in theory a year of spending,” for Fiat in Europe, he said.
Marhionne said that he will buy the rest of the stake in Chrysler and merge the automaker with Fiat, even if the minority shareholder the United Auto Workers Retiree Medical Benefits Trust plans to use some of its stock to stage an initial public offering in Chrysler.