What Soaring Sales Mean for Chrysler IPO Fight

REPLAY VIDEO
Your next video will start in
Pause

Recommended Videos

  • Info

  • Comments

  • VIDEO TEXT

Nov. 1 (Bloomberg) -- Edmunds.com's Michelle Krebs and Bloomberg's Mark Clothier discuss what soaring Chrysler sales mean for Sergio Marchionne's IPO fight. They speak with Adam Johnson and Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Right direction.

How much harder does this make it for sergio to do what he wants to do and buy it on the cheap?

He may want to buy it on the cheap, but he also wants the company to do well.

This is a good sign.

It is exactly where we thought they would need.

Their sales are coming from trucks and sport utilities.

That is where the profits are.

It is not exactly where analysts thought they would be.

It is where we thought they would be.

Obviously, he wants to sell as many cars as he can.

He is not going to underdeliver, but he might overpromise.

Analysts are always wrong to the downside because companies want them to be that way.

Maybe sergio wants analysts to be wrong on the upside so he can miss and get the cheaper ipo.

He has restated its couple of things in the prospectus.

He said there were problems with the cherokee role -- roll on the prospectus.

It seems like he is doing everything in his power to get it cheap.

He is clearly in an odd position.

He is the guy who would have to pitch the sales of potential investors.

He also wants to get the cheapest price possible.

I want to talk about the jeep cherokee problem.

That is why they came in less than analysts' estimates.

Most animists -- most analysts knew about the cherokee.

How big of a problem is it?

They had issues with the software.

A nine speed transmission.

Have you ever heard of a nine speed transmission?

Eight is top of the line.

They had issues with the software that helps fuel that and some other issues which caused delays and were problematic areas.

Did you have that already worked into your expectations?

Absolutely.

We watched it be delayed.

They were so deprived of product and technology.

They are behind in terms of product and facilities.

They have to leapfrog everybody else.

That is why we are seeing things like nine speed transmissions.

They have got to do something bigger and better.

They got rid of a lot of employees with institutional memory on launching products.

Gm has brought back retirees to help them do it.

It is a problem and it is a concern that they are not launching products better than they are.

The other concern is the fact that fiat bailed out chrysler a couple of years ago.

Now the tide has turned.

Whether you want to argue that sales should have been up 11% or 12%, fiat wants to siphon off the cash flow to try to improve fiat.

Can they get away with that?

I do not know if they can get away with it.

That is a big problem.

Chrysler does not make anywhere near what ford and gm do.

They have to invest in fuel efficient technologies, emission controls.

That will be a real challenge.

When i think about all of these companies, the cherokee is the only good product that stands out.

They have done well with the ram truck.

Why can't fiat make all of the cars?

They are not just doing poorly because europe is not buying cars.

Other companies are doing well in europe.

Ford and gm announced losses in europe that were almost nothing.

They are definitely having some product issues.

They brought in the 500 l in the u.s., which was reviewed for the well.

Fiat does not have the mass- market brand for the u.s. this is one that will be playing out over the next several weeks if not months.

This text has been automatically generated. It may not be 100% accurate.

Advertisement

BTV Channel Finder

Channel_finder_loader

ZIP is required for U.S. locations

Bloomberg Television in   change