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Fiat Chrysler Will be OK if it Misses Lofty Targets: Marchionne

May 14, 2014
3 min to read


Via Reuters


Fiat Chrysler Automobiles (FIA.MI) Chief Executive Officer Sergio Marchionne said the company will be much stronger than it is today at the end of his plan to sell 7 million cars by 2018, even if it misses the targets he set forth last week.

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"The targets are the targets. But even if I miss it by 10 percent, from where I am today, it's like (the) midget and the Jolly Green Giant," Marchionne said at the dedication of a new transmission plant in Tipton, Indiana, on Tuesday.


His suggestion was that Fiat Chrysler would prosper, whether or not it falls a bit short of meeting some of his lofty goals.


The Green Giant, mentioned with a touch of humor by Marchionne, is the towering animated character with a deep "Ho, Ho, Ho!" long used to advertise a brand of canned and frozen vegetables produced by General Mills.


Last week Fiat shares fell 13.5 percent as Marchionne revealed a five-year plan that calls for the global sale of 7 million vehicles from 4.4 million in 2013 and a fivefold increase in net profit.


Many Wall Street analysts said they were concerned that Fiat Chrysler would be unable to meet the ambitious goals.

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Marchionne said the targets were to spur his troops to greater heights after the first five-year plan, from 2009 to 2013, that righted a near-bankrupt company to one that will be introduced on the New York Stock Exchange late this year as the seventh-largest car company in the world.


"People think I do these plans for the benefit of the capital markets. That is the irrelevant portion of the pitch.


"The exercise of leadership requires the setting of some pretty bold objectives. The house needs direction. The plan is a structure that provides direction. So don't quibble about whether I sell 400,000 Alfas or I sell 382,000."


The company also plans to sell 150,000 Alfa Romeo cars in North America by 2018. It now sells no Alfa Romeo models in the United States or Canada.


Fiat shares fell 3 percent on Tuesday to 7.25 euros, but are up 22 percent since the start of the year and the announcement that Fiat had sealed a deal to buy out Chrysler's minority owner.

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JEEP PRODUCTION


Fiat Chrysler may expand Jeep production in United States by expanding existing plants, Marchionne also said.


"It may require the expansion of some of our sites. I can't deal with the volumes at issue now."


U.S. sales of Jeep, Fiat Chrysler's SUV brand, increased 46.5 percent through April and existing Jeep plants in Toledo, Ohio and Detroit that make the profitable Wrangler and the Grand Cherokee are at production capacity.


"We're looking at issue," Marchionne said of getting more Jeep production in the United States.

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Fiat Chrysler has plans to make Jeep at a plants in China and Brazil, but not in India, Marchionne said.


Globally, by 2018, Fiat Chrysler plans to produce 1.9 million Jeep models. It also targets sales of 1 million Jeeps this year, up from 732,000 in 2013.

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