Italian-American car maker announces it has cleared more debt than expected in first quarter

Fiat Chrysler Automobiles could clear all debts this year if its efficiency-boosting measures continue to have the same effect.

The Italian-American car maker announced in its first quarter financial report that it had reduced current debt to €1.3 billion (£1.1bn) while raising its operating profit by 5% to €1.6bn (£1.4bn).

FCA produced 1.2 million cars in the first quarter of 2018 – a 5% increase on the year before. It achieved sales growth in all regions, with the new Jeep Compass and Alfa Romeo Stelvio listed as key contributors to the boost.

The company's capital spending was down by €900m in the first three months due to what it described as “programme timing”, but experts think it could hint at an upcoming boost of investment.

In the statement, FCA predicted that it could cancel its debt this summer before generating around €4bn in net cash by the end of 2018.

FCA boss Sergio Marchionne, who is standing down next year, has led the group through this recovery period by reducing FCA’s debts to make it more competitive against its US rivals, General Motors and Ford.

Both of those rivals have recently cut their costs. GM sold off its last European brands, Opel and Vauxhall, to the PSA Group in 2017, while Ford has just confirmed that it will be ditching the Fiesta and all saloons from its US line-up.

FCA looks set to ditch diesel from the Alfa Romeo, Fiat, Jeep and Maserati ranges in the coming months in a bid to further boost efficiencies. Although unconfirmed, reports suggest the decision will be announced in June as part of the group’s mid-term plan.

Our Verdict

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The Fiat 500 is a deserved success story for the brand, offering bags of style, a fine drive and low costs

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Comments
7

26 April 2018

"Alfa Romeo Stelvio listed as key contributors to the boost." wonder how many of the 1.2 million were Stelvio's and how many were cheap Fiat 500's?

typos1 - Just can’t respect opinion

26 April 2018

Well, the Stelvio sold around 4,500 units in Europe and 1,400 units in the US in the first two months of 2018, so it's not exactly a massive seller by any means, on either side of the pond. 

26 April 2018

"wonder how many of the 1.2 million were Stelvio's and how many were cheap Fiat 500's?"

Sales grew 5% year-on-year to 1.2 million, implying an increase of 55000 to 60000. With around 6000 stelvios sold that means 10% of their growth came from a single model, which means it was pretty significant, especially as it is probably a high margin model. They would have sold way more 500s, but that's a mature product which may not have contributed to growth at all if sales are flat year on year.

26 April 2018

You're comparing a new model against 50,000 sales of increased sales from existing models.

typos1 - Just can’t respect opinion

26 April 2018

Looking at the volume model range it shows...

 

26 April 2018
Mikey C wrote:

Looking at the volume model range it shows...

 

Hopefully Fiat's turn will now come - both the 500 and the Panda need updating although I'm not sure how you improve on the styling of the 500 when it was so right in the first place.  Remember that Fiat has a bit of history in coming up with a good design and then spoiling it at the first facelift.  Indeed, the previous Panda looks far sharper and more modern than the current one!

27 April 2018

Acquisition target for Geely, I would imagine.

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