Marchionne: Fiat will remain in Kragujevac

CEO of Fiat Chrysler Automobiles (FCA), Sergio Marchionne has revealed the company’s five-year-plan which, among other things, stipulates that Fiat will continue producing the 500L model in the Kragujevac plant while the production of Fiat Panda will be relocated to Poland.

Marchionne has also said that Fiat would become an electrified and urban car for Europe, a market facing strict emissions regulations that is creeping toward outlawing the diesel engine, and announced that, by 2021, the company would have completely stopped producing diesel cars.

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Fiat’s CEO has pledged that the company would invest around 9 billion euros in electrifying 30 models over four brands by 2022.

Marchionne gained control of Chrysler in 2009, the year Chrysler Group LLC filed for bankruptcy at the insistence of the Obama administration’s auto task force. On Friday, nearly a decade later, the FCA CEO took the stage in a tie, signaling that the Italian-American automaker would pay off its net industrial debt by 30th June.  

“We have pursued a disciplined and rigorous strategy to eliminate our net industrial debt, reversing a legacy that has dogged both Fiat and Chrysler for decades,” Marchionne said. “Having used the capital markets to help us transform into a viable global automaker over the first ten years of my tenure as CEO, reducing that debt has been one of our major objectives over the past five years.”

Now he says his mission is complete, and the promised plan his successor will inherit is already in motion. It aims to make FCA the most profitable automaker in the U.S. and achieve profit margins of 11 percent by 2022.

As the company’s CFO, Richard Palmer explained, Fiat intends to double its profits in the next five years through free cash flow (capital costs deducted) of 30 billion euros in this period. The plan is to distribute about 20 percent of profits in dividends, which would amount to about 6 billion euros in five years.

Management expects that, by 2022, the company’s EBITDA will be between 13 and 16 billion euros, a jump from 6.6 billion in 2017. However, last year’s figures did not cover the business results of Magneti Marelli, an auto-component manufacturer, which Fiat acquired recently. Fiat’s executives have also announced capital investments in the amount of 45 billion euros in this period, primarily in the development of electric and autonomous cars.

(Danas, 01.06.2018)

This post is also available in: Italiano

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