NEW YORK (Reuters) - Sergio Marchionne is gearing up for a big year for his combination of Fiat SpA and Chrysler Group, but instead of next year it will be 2013.
That’s when the CEO of both companies will bring Alfa Romeo back to the United States, launch a slew of new Chrysler products and will have a chance of fully combining Fiat and Chrysler into one company. “The big year for us, for a variety of reasons, is 2013,” Marchionne said in an interview with Reuters Insider television.
Fiat now owns more than 50 percent of Chrysler, with the rest owned by the retiree healthcare trust affiliated with the United Auto Workers union. It is possible that Chrysler will have an initial public stock offering in 2013, Marchionne said, as the UAW seeks to cash out or reduce its shareholdings.
In a wide-ranging interview, Marchionne said he is “guardedly optimistic” that European leaders will make enough progress on the euro to bolster confidence in the currency’s future. “In the next 30 to 60 days, we should see the euro reacquiring credibility, (and) support in the international financial markets to move forward,” Marchionne said. European leaders are meeting this week to discuss steps to resolve the crisis.
Italy, where Fiat has five money-losing plants, has become the “eye of the storm,” but Marchionne said austerity measures introduced by new Prime Minister Mario Monti are positive steps. Meanwhile, Marchionne acknowledged, Fiat is waiting for more clarity on Europe’s currency crisis before pursuing further vehicle investment plans in the euro zone.
“These uncertainties have slowed down some of the processes that Fiat normally would have executed much faster for investments and for expansion activities in the euro zone,” Marchionne said.
Reuters Insider interview with Marchionne: link.reuters.com/bas45s
Chrysler has become Fiat’s chief source of strength this year, comprising two-thirds of Fiat’s third-quarter profit. It’s an ironic and dramatic turnabout from two years ago, when Chrysler declared bankruptcy and the United States government delivered the company into the hands of Fiat as the only alternative to an outright liquidation.
Since then, however, Chrysler has regained profitability and shared strongly in the rebound of the U.S. auto industry. Fiat, however, has been hampered by both the euro crisis and by rigid Italian labor laws that impede the sort of restructuring that has spurred Chrysler’s revival.
Marchionne said Chrysler’s performance should “exceed” Fiat’s this year, helped by the rebound in U.S. auto sales, which in November hit their best level in more than two years. Chrysler’s U.S. auto sales have leaped 25 percent so far this year, more than double the overall market’s 10.4 percent increase. Jeep is sparking Chrysler’s market-share gains in the United States.
Next year, Chrysler is launching the Dodge Dart, a compact car built on a Fiat platform that will compete with the Toyota Motor Co Corolla and Honda Motor Co’s Civic. The compact-car segment is a bread-and-butter category where Chrysler has been weak for years, but Marchionne said Chrysler is building “a lot of aspirations” into the new Dart — a name revived from its heyday in the 1960s and early 1970s.
But “the most substantial portion of the product portfolio renewal will happen in 2013,” Marchionne said. That year will bring several revamped Jeep models, including the possible revival of the long-dead Jeep Grand Wagoneer nameplate.
The company’s plan to relaunch the Alfa Romeo brand in the United States will attempt to build on the re-entry of the Fiat brand this year with an urban mini-car, the Fiat 500.
The American launch of the 500 has not gone well. Chrysler has sold less than 18,000 500s this year, woefully short of the 50,000 sales target. “To be perfectly blunt, the launch was poorly executed because we had a car way earlier than distribution was available,” Marchionne said. “We launched too early. It would have been a better launch in January 2012 than in January 2011.”
Reporting by Deepa Seetharaman and Paul Ingrassia in New York, editing by Matthew Lewis