“Oh, and we won the F1 Championship,” said Marchionne as he paused briefly on a brag slide showing the red Ferrari in question. “For the 15th time.”
Go deeper with GlobalData
He sort of apologised for slipping in the brag. But he was disingenuous. Just about every one of the 40 slides in his 3rd quarter earnings results presentation was a victory parade.
“Congratulations,” said one of the analysts as the time arrived to cross-examine the financial wizard of the auto industry, “on winning the world championship.”
“What about the financial results?” moaned Marchionne. “Oh, well, we are used to those,” came the dry reply.
Marchionne has good stuff to report because auto revenues have risen hugely in the third quarter and the year to date by 17% and 13% respectively. There was a shrewd question from the Morgan Stanley man. “How high are you running? Your global volume is up a third in two years. That’s faster than Toyota.” Manpower utilisation is 100%, the great man conceded. But the physical capacity is just 70% full.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataAnalysts have been encouraged to raise targets for the year (trading profit of EUR3bn rather than EUR2.7bn). However, when discussion turned to forecasts for next year, he pulled hard on the handbrake. The battle for Europe was tough, he said, as if we didn’t already know that with all players trying desperately to restore markets shares in what is effectively a flat market. “I am concerned about the competitiveness in Europe and we must watch the situation carefully.”
Fiat has been assisted more than most by rising fuel prices and greener consumers. It has the lowest average corporate CO2 rating on its fleet of offerings. He reckons that Fiat might be laying the ghost of gruesome quality and reliability. “All the work done over the last seven quarters is paying off in warranty.”
He is still admitting to the huge ambition of getting into the US. That sounded OK when it was first mentioned because the idea was to lead with Alfa Romeo. But Alfa has been a disappointment. While Fiat and Lancia have grown market share in European markets, Alfa has not. The recent model launches have been more pasta than pepperoni. Alfa must get its brio back and Marchionne has sent the product planners back to the drawing board.
“Three hundred thousand cars by 2010 is do-able and that would be the greatest benefit we could create from an autos division margin standpoint. Alfa is the hardest asset we have to work, and we have to see a full range of cars and we have to do it flawlessly.”
So if Marchionne is to announce his US strategy by March (and he said he would) it must be Fiat going to the US because Alfa is still half-baked. “The more I look at it, the more I realise that the Fiat Group has better strengths entering the US alone rather than through acquisitions,” he said. Now what acquisition might that have been Serge? Surely you weren’t considering putting Pandas with Jaguars and Land Rovers in their US dealer network? Just for a fleeting moment you were weren’t you?
Tell you what, if you beat McLaren next year as well, you can have the British brands with our blessing. They need a miracle man.
Rob Golding
