Fiat Chrysler (FCA) has posted a 35% rise in fourth quarter net profit, boosted by strong business in North America.

FCA reported Q4 net profit of EUR1,578m (+35%) with adjusted net profit some 3% above the year earlier period at EUR1,537m.

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Adjusted EBIT for North America in Q4 was EUR2,062m, some EUR382m above the previous year and a record. FCA also posted a record Q4 North America margin at 10.0% (up 130 bps). There were also improvements in South America, Asia and Europe was profitable (but down).

Worldwide combined shipments of 1,165,000 were 1% down on Q4 2018.

However, CEO Michael Manley warned that disruptions due to the coronavirus outbreak in China could threaten production at one of Fiat Chrysler’s European plants within two to four weeks. Reports suggest that a critical component from a China plant could soon be in short supply.

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The strong Q4 results left FCA adjusted operating profit for the year at EUR6.67bn, slightly down on the previous year. just shy of its target of over EUR6.7bn. Its adjusted EBITDA margin came in at 6.2%, in line with its target of more than 6.1%.

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Worldwide combined shipments of 4,418,000 units were down 9%, primarily due to dealer stock reduction in North America, lower China JV shipments along with sales channel actions and discontinuation of products in EMEA, FCA said.

However, North America also boosted FCA full-year results, with a record adjusted EBIT for the region, up 7% to EUR6,690m and record margin, due to “favourable model mix, positive net price, industrial efficiencies, lower advertising costs and favourable foreign exchange effects”, FCA said. The profits boost was in spite of lower volume. Shipments in NA in 2019 were down 9%, “primarily due to dealer stock discipline”, FCA said. 

But the margin leap in NA (+50 bps to 9.1%) clearly reflected model mix and more sales of high margin trucks. FCA said the Ram and Jeep brands drove North American results as strong sales of the all-new Ram Heavy-Duty, Ram 1500 and Ram 1500 Classic resulted in record Ram brand sales in the US, up 18%.

The positive numbers augur well for the planned merger with PSA.

Manley said: “Last year was a historic year for FCA. We continued to deliver value for our shareholders and we took actions to thrive in the future by substantially strengthening our financial position, committing to key product investments and entering into a combination agreement with PSA.”

FCA also reiterated its plan to boost adjusted EBIT to more than EUR7bn this year.