Fiat SpA’s chief executive reportedly said on Tuesday that the Italian industrial group’s struggling autos unit would post a profit in 2006 and meet or beat its target of a EUR317m trading loss in 2005.
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“We will make money in 2006. It is that simple,” CEO Sergio Marchionne told Reuters at the North American International Auto Show in Detroit, making a clear statement out of what Fiat officials had in the past expressed as a hope.
The news agency noted that Fiat Auto has been narrowing its chronic losses under Marchionne’s stern control. The business had a trading loss of EUR822m in 2004 and showed a EUR302m trading loss in the first nine months of 2005.
Asked about the division’s 2005 target, Marchionne reportedly said: “It is confirmed. Confirmed or better. We are closing the numbers now. I have no indications that we will not make it.”
Reuters noted that Marchionne aims to pull Fiat Auto back to profit by trimming costs and striking alliances with other car makers such as Ford and India’s Tata Motors.
Fiat is also launching new models, and Marchionne said the division was sure to hit its sales target of 360,000 new Fiat Puntos in 2006. The car was launched in September.
“The 360 (thousand) will be done,” he declared to Reuters, but said Fiat still had its work cut out for it to make a success of the Punto, its most popular model.
“We are happy that we have made this progress so far. It is an asset that needs to be worked because the B-segment is relatively competitive and we need to continue to work on that car,” he said. “I think it has got all the makings of a great car.”
According to the news agency, he acknowledged that returning Fiat Auto to profit is a major step in reviving Fiat’s fortunes.
“It is important for the group because it is the remaining part of reshaping the house,” he said. “We have started working pretty aggressively on the other parts of the portfolio. I was in Chicago yesterday and we have begun some pretty extensive reshaping of the CNH (agricultural equipment) activities.”
Truck maker Iveco is also honing its performance, Reuters noted.
“We are trying to turn this (group) into a powerhouse but it takes time,” Marchionne reportedly said. “There was some lethargy for a long period of time but we are trying to shake it up and move on.”
