Fiat to Focus on Jeep Expansion as Prospects for GM Deal Fadeby
CEO Marchionne says no hostile GM bid after getting `rebuffed'
2018 plan is crucial, while mergers are secondary, CEO says
Jeep will play a “central” role in changes to a plan to invest 48 billion euros ($52 billion) over five years, Chief Executive Officer Sergio Marchionne said at a shareholder meeting in Amsterdam on Thursday. That may mean scaling back a goal of rolling out eight new Alfa Romeo models by 2018 as part of a strategy geared to expanding the Italian-U.S. automaker’s sales by 50 percent to 7 million vehicles a year.
Product strategy has taken on greater importance for Fiat Chrysler as a deal won’t take place soon. Marchionne said his approaches to GM were “rebuffed” and he won’t try to force a merger with a hostile bid. While there are alternatives to his preferred partner, the search is “not an indiscriminate dating game. I am not willing to go with anybody,” the outspoken proponent of auto-industry consolidation said.
“You have to prioritize things in life,” Marchionne said. “The plan rules, aggregations come second.”
With a deal unlikely in the near term, Fiat Chrysler needs to invest its limited resources wisely. The company is strained by 7.8 billion euros in net industrial debt and is losing the steady profit generated by Ferrari NV, after shareholders on Thursday approved the spinoff of the supercar maker.
Fiat is delaying the introduction of several new models, including a Maserati sports car and a full-sized Alfa Romeo sedan, to adjust to flagging growth in China, people familiar with the matter have said. An Alfa Romeo sport utility vehicle is among vehicles that won’t go on sale as projected next year, said the people.
While Marchionne didn’t comment on specific models, he confirmed that he will update the group’s strategy in January. As a result of the changes, 2016 spending will likely be lower than planned, he said.
While Marchionne continues his pursuit of carmaking consolidation, Fiat is also looking to cooperate with technology companies, as Apple Inc. and Google explore entering the auto industry. Marchionne said that talks with potential Silicon Valley partners are ongoing and he expects cooperation in the future. He didn’t mention any companies by name.