On the day that its former CEO Sergio Marchionne passed away, Fiat Chrysler (FCA) posted quarterly results suggesting that new CEO Mike Manley and his management team face challenging conditions ahead.
FCA adjusted EBIT for the second quarter was posted at EUR1.655bn, 11% below Q2 of last year and below analyst expectations.
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New FCA CEO Mike Manley opened the results presentation with a minute’s silence in memory of Sergio Marchionne.
Manley told analysts that the company faces big challenges in China and was revising its 2018 profit forecast down with adjusted EBIT is expected at between EUR7.5-8.0bn from a previous forecast of EUR8.7bn.
FCA reported lower shipments from the China JV as a result of market decreases, particularly in the SUV segments, and increased competition from domestic brands in China. Net revenues in China decreased (adjusted EBIT was a loss of EUR98m) due to lower consolidated volumes, unfavourable mix and pricing actions resulting from changes to China import duties (cut, which led to higher incentives spending).
However, FCA Q2 vehicle shipments overall were up 6%, primarily due to increases in NAFTA and South America (where it was hit by adverse currency movements).
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By GlobalDataFCA confirmed the 2022 goals set out by Marchionne in his last investor presentation on June 1 which include a doubling of operating profit and big investment in electrification.
