Sun, Jun 03, 2018 - Page 16 News List

Fiat Chrysler unveils plans for more electric vehicles

AP, BALOCCO, Italy

In his last major presentation as CEO of Fiat Chrysler Automobiles NV (FCA), Sergio Marchionne announced a big investment push to make more electrified cars, while acknowledging that traditional engines will continue to dominate production.

Unveiling the company’s plans through 2022, long after his planned retirement next year, Marchionne said that Fiat Chrysler will invest 9 billion euros (US$10.50 billion) as it tries to catch up in the market for gas-electric hybrids and fully electric vehicles without forsaking a core market that still wants internal combustion engines.

“Reducing our dependence on oil is one of the single greatest challenges that our society faces,” Marchionne told financial analysts as he presented the business plan, which will be a final legacy to the company he created through the merger of Fiat with then-failing Chrysler.

“At FCA, we believe there is no single solution, no magic formula, to solve this problem. We believe to achieve a quantum leap, the entire system — political, economic and industrial — needs to work together with the right measure of realism based on finding the appropriate balance between consumption levels, cost and efficiency,” he said. “At the same time, conventional internal combustion engines will continue to be in the vast majority of our production,” he said.

The day-long presentation focused on plans for the brands that drive revenue: Jeep SUVs, Ram trucks, and premium brands Maserati and Alfa Romeo.

CFO Richard Palmer said that by 2022, those brands would represent 80 percent of revenue, compared with 65 percent today.

Fiat expects to recover 65 percent of electrification costs through higher prices, Palmer said, adding that 15 percent of capital expenditures of 45 billion euros in the period would be invested in conventional engine technology.

Notably absent were the marquee brands: Fiat and Chrysler, which both represent the less-profitable passenger cars currently off consumers’ radar, particularly in the US, where Fiat Chrysler makes most of its profits, but also in fast-growing China.

Marchionne said that does not signal the demise of either brand, but means that their contribution does not change the overall numbers.

The Fiat 500 family and the Panda city car would contribute to electrification, with exports from European production sites to the US, while Chrysler remained a North American brand, focused mostly on minivans, he said.

The business plan is Marchionne’s grand finale, 14 years to the day after he was named Fiat’s CEO. His tenure has included landmark deals, Fiat’s merger with bankrupt US carmaker Chrysler and spin-offs the group’s industrial vehicle business and sports carmaker Ferrari.

The 65-year-old Italian-Canadian has said that his successor as CEO would come from within the company, but would not be named before next year.

In a break from fashion tradition, Marchionne unzipped a knit cardigan to reveal a blue tie — which he said was the first he has worn in a decade.

It was a gesture he had pledged if Fiat eliminated debt, which he said will happen by the end of the month.

Marchionne is famous for unfailingly wearing navy blue cashmere sweaters without a tie.

Debt is “a legacy that has dogged both Fiat and Chrysler for decades,” he said, adding that erasing it is “a significant milestone.”

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