Fiat Chrysler Automobiles will focus on its five-year investment plan, as a merger with General Motors is highly improbable, CEO Sergio Marchionne said.
The automakers’ costs are quite considerable if one takes into consideration the financial implications of the development of cleaner and more fuel efficient cars. Fiat Chrysler Automobiles is looking to share this burden with other automakers by trying to find a partnership to split the costs, but this plan was “not a matter of life or death” for FCA, CEO Sergio Marchionne said. “We are not choking. We are in relatively decent shape,” he told journalists last week following a shareholder meeting that approved the breakup of Ferrari from the group. Earlier this year, FCA made GM a proposal for an alliance between the two giants, but the deal was rejected. “This is not an indiscriminate dating game. I’m not willing to go with anybody to get it done,” Marchionne said. “We have been publicly rebuffed, we have been rejected and you cannot force these things. I don’t want to,” he added. “At the moment, we have no intention to do anything hostile.” Without giving further details, FCA’s CEO stated that less obvious merger candidates existed that could offer similar benefits. Marchionne said Fiat Chrysler’s future plans are to focus on its 52-billion-dollar five-year investment plan to develop and improve company’s brands.
But this plan will not be so easy to put into practice, as, according to people familiar with company’s plans, Fiat Chrysler Automobiles NV is holding back the launching of several new models because of the moderate pace of the Chinese auto market and, furthermore, FCA 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.
Via Automotive News