According to a source close to the situation and a document seen by Reuters, Italian carmaker Fiat is likely to miss sales goals in Brazil this year and the next.
According to the internal document, Fiat SpA has decreased its forecast to selling 950,000 units in Brazil and Argentina this year, 5% lower than the previous 1 million prediction. Brazilian sales would be off in 2014 as well, according a person familiar with Fiat’s forecasts, as the market increases slower than the company expected.
“The figures are too optimistic for Brazil,” the person said, adding that Fiat’s budgets for 2014 and beyond have not been finalized.
“We do not expect that Fiat will reach its full-year 2013 guidance of a 1 billion euro trading profit contribution from Latin America,” said Commerzbank in a note on October 22.
Latin American sales have grown in importance for Fiat as its European deliveries have dipped further than the region’s six-year market slump. It now sells almost as many cars in Brazil and Argentina as it does in its home region, including Russia and Turkey, where it predicts it will deliver around 1.1 million units in 2013. Revenue from Brazil, the world’s fourth biggest auto market, and one that Fiat has controlled for 12 consecutive years, is around 25% of Fiat’s trading profit, allowing it to balance European losses.