Fiat SpA (F), the Italian carmaker merging with its U.S. unit Chrysler Group LLC this year, is sticking to 2014 profit goals as growth at its Maserati luxury unit makes up for weakness in Brazil, its second-biggest market.
“At a group level, we’ll make 2014 targets, and this is not an issue,” Sergio Marchionne, chief executive officer of Fiat and Chrysler, told reporters in Venice, Italy. Maserati, the maker of the $66,900 Ghibli sedan, may receive orders for 40,000 cars this year, and the brand is “on pace for 75,000 deliveries in 2018.”
Fiat bought full control of Chrysler in January, and the planned merger is part of Marchionne’s decade-long effort to turn the Turin-based company into a carmaker big enough to challenge General Motors Co. (GM), Volkswagen AG and Toyota Motor Corp. (7203) Fiat is planning on trading profit, or earnings before interest, taxes and one-time items, of 3.6 billion euros ($4.9 billion) to 4 billion euros this year.
Meeting the goal hinges on reducing losses in Europe, “and depends on how Maserati performs,” the CEO said. “On the mass market, we’ve come down to the bone on spending. We can’t cut more, as there are structural costs to keep the machine working.”
Fiat was trading down 0.6 percent at 7.75 euros as of 4:18 p.m. in Milan, paring a decline of as much as 1.2 percent earlier today. The stock has gained 30 percent this year.
Marchionne, 61, plans to boost group deliveries 61 percent to 7 million cars by 2018, and increase net income fivefold in that period to 5 billion euros, with a wider offering of upscale vehicles, including new Alfa Romeo models built in Italy and Jeep sport-utility vehicles. Earnings growth this year is being held back by the auto market in Brazil, where four-month sales by Fiat and Chrysler dropped 5.6 percent.
“Now the soccer World Cup has absorbed all the attention, but the real problem are the elections” scheduled in October, Marchionne said. “We see a difficult year until the vote.”
Maserati will increase production of the Ghibli and Quattroporte sedans by about 20 percent by September to match demand, people familiar with the matter said this week.
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