Fiat SpA (F)’s head of sales, Andrea Formica, resigned after less than a year at the Italian carmaker after the company lost deliveries to competitors and remained unprofitable in Europe, its biggest market.
Formica, whose resignation takes effect Sept. 1, will be replaced by Lorenzo Sistino, head of the carmaker’s Fiat Professional light commercial-vehicle unit, a spokesman at the Turin-based manufacturer said, speaking on condition that he not be named in line with company policy.
“This is not good news,” said Wolfram Mrowetz, chairman of Alisei SIM in Milan, which oversees 200 million euros ($289 million), including Fiat shares. “It means Formica didn’t meet the expected results, as Fiat sales in Europe didn’t show any recovery.”
Fiat’s market share in Europe shrank to 7.2 percent in the first half of 2011 from 8.1 percent a year earlier as deliveries fell 13 percent to 530,228 vehicles. Fiat, which also owns U.S. carmaker Chrysler Group LLC, aims to recover market share in the second half with new models, including Fiat Freemont, a European version of Chrysler’s Dodge Journey sport-utility vehicle, and the Lancia Ypsilon subcompact.
Formica, who ran Toyota Motor Corp. (7203)’s sales in Europe before joining Fiat in September 2010, was previously chairman of Ford Motor Co. (F)’s Italian unit. He was in overall charge of Fiat’s namesake brand as well as worldwide sales of the Alfa Romeo and Lancia divisions and of Chrysler’s models in Europe.
The executive was replaced as Fiat-brand chief by Olivier Francois in a reorganization in July as the Italian company absorbed Auburn Hills, Michigan-based Chrysler. Formica also wasn’t included in the group executive council created to oversee the two carmakers’ operations.
Fiat fell as much as 1.9 percent to 4.15 euros and was down 1.7 percent as of 11:50 a.m. in Milan trading. The stock has dropped 38 percent this year.
The Italian company said today that it will introduce a convertible version of the Chrysler 200 model in Europe as the Lancia Flavia Cabrio.
Fiat doesn’t provide a regional breakdown of earnings. Chief Executive Officer Sergio Marchionne has said the company has been posting losses in the region while management was focused on buying Chrysler.
“In Europe, the outlook for small cars is tough, especially in Italy, where market demand is likely to remain under pressure by economic worries and fiscal austerity,” Brian Johnson, a Chicago-based equity analyst at Barclays Capital Inc., said in a note to clients Aug. 26 as he downgraded Fiat to “equal weight” from “overweight” with a target price of 5 euros.
Fiat increased its Chrysler stake to 53.5 percent in July. The Italian carmaker expects to hold 58.5 percent of the third- biggest U.S. automaker by the end of 2011, after getting 5 percent in return for developing a fuel-efficient car for Chrysler.
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