Last Five-Year Plan for Fiat Chrysler: Marchionne’s Legacy: Fiat Niche!

05/31/2018

Last Five-Year Plan for Fiat Chrysler Marchionne’s Legacy: Fiat Niche!

REUTERS

Fiat Chrysler boss Sergio Marchionne at a press conference in November 2017.

Grande Finale for Sergio Marchionne: The FCA boss will soon announce a new five-year plan for Fiat Chrysler Automobiles. It will be his last major step. Before he clears the field in 2019, Marchionne trims his company in the niche – and pushes Fiat further on the siding.

Locally, this appointment for Sergio Marchionne is a return to its roots – but hardly in terms of content: Tomorrow, the 65-year-old manager at the Balocco test site in Berlin, a new five-year plan for Fiat Chrysler Automobiles Show stock market chart (FCA).

It’s going to be one of Marchionne’s last major appearances to head FCA next year – and that was where he introduced his survival strategy for Fiat in 2004. And Fiat has survived under Marchionne’s wing – at least formally: With the acquisition of the US carmaker Chrysler, spin-offs and some financial acrobatics, the known for his daring sayings car manager has created a global carmaker, which deserves quite considerable and the Marchionne now well ordered handed over.

In the future, FCA should put even more emphasis on the niche brands in its conglomerate, as the news agency Bloomberg citing insider reports – and its former mass-market brands Fiat and Chrysler continue to cut back. For example, FCA is considering stopping the sale of Fiat cars in North America and the US – and offering Chrysler almost exclusively to the US market. In contrast, the group subsidiary Jeep is expected to grow strongly globally, the two Fiat-class daughters Maserati and Alfa Romeo are to be combined in a luxury unit in the future.

FCA did not want to comment on the Marchionne presentation to Bloomberg in advance. A few weeks ago, corporate insiders had previously posted exciting details in advance – which, if they are correct, should significantly change the Italian-American carmaker. According to the five-year plan for the years 2018-2023, FCA is set to grow, thanks largely to its off-road Jeep and pickup specialist Ram.

A global bet on the traction of Jeep

In addition, the automaker is considering merging the recently revitalized sports car brand Alfa Romeo and the luxury brand Maserati into a single entity in the financial reports. This could investors see as a first step for a possible spin-off of the two Italian luxury brands.

Marchionne is likely with the plan to leave his legacy in the car company. For at the FCA Annual General Meeting in April 2019, his successor will be elected.

On the Balocco test site, he should probably turn rhetorically some victory rounds. When Marchionne took over as Fiat boss 14 years ago, he had just saved the once-iconic brand from bankruptcy. Under his leadership, the value of the current Fiat Chrysler Group has increased more than tenfold.

In his latest plan, however, Fiat does not play much of a role anymore – from the volume business, for which Fiat stood for many decades, Marchionne retreats further. Instead, he prefers to focus FCA resources on promising niches – such as the US off-road mark Jeep. This should already provide today for 70 percent of the FCA profits, my analysts. Marchionne aims to further double Jeep’s sales volume by 2022 – strengthening Jeep’s presence in Asia, Brazil and Europe, and increasingly offering hybrid models. Last Jeep sold 1.4 million vehicles worldwide.

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