Sept. 20 (Bloomberg) -- Fiat SpA Chief Executive Officer Sergio Marchionne said he targets a break-even result for the carmaker’s European business by 2014 and confirmed financial targets for this year, even as sales slow down in the region.
“We have actually dropped forecasts for 2011 car sales in Italy,” Marchionne said today in an interview in London. Italian government austerity measures “will ultimately impact 2012 volumes. Northern and central Europe is doing relatively well.”
Marchionne, who runs both Fiat and U.S. automaker Chrysler Group LLC, is struggling to boost European sales as Fiat posts losses in its biggest market and continues to lose ground to competitors. The company’s market share in the region shrank to 5.8 percent in August from 6.8 percent a year earlier as deliveries fell 7.6 percent. Marchionne in July promoted purchasing chief Gianni Coda to run the two carmakers’ European operations.
Marchionne, 59, said last week he may delay introduction of new models globally and won’t consider selling shares in sports- car specialist Ferrari SpA as markets deteriorate. A plan to buy the remaining stake in Chrysler is also on hold, Marchionne said Sept. 13 in Frankfurt. Fiat currently owns 53.5 percent of Chrysler and expects to get another 5 percent by the end of this year in exchange for developing a fuel-efficient model.
Fiat revised its full-year earnings targets in July after consolidating Chrysler from June 1. Fiat forecasts 2011 earnings before interest, taxes and one-time items, which it calls trading profit, of about 2.1 billion euros ($2.87 billion) and revenue of more than 58 billion euros. Fiat confirmed the targets today, according to a slide presentation posted on its website for an investor meeting in London.
Marchionne said today that Italy must “reinforce” its commitments to balancing its budget, as it must convince the rest of the world that it’s “serious.”
“The time for nebulous, unspecified and non-detailed commitments is gone,” Marchionne said after meeting investors. “The whole question about austerity is crucial,” he said, when asked what Italy should do to boost credibility after Standard & Poor’s lowered the country’s credit rating late yesterday.
Fiat rose as much as 6.7 percent and traded at 4.20 euros in Milan at 4 p.m., giving the company a market value of 5.1 billion euros. Fiat shares have lost 37 percent since the beginning of the year.
--With assistance from Joanna Starritt in London. Editors: Jerrold Colten, Robert Valpuesta
To contact the reporter on this story: Tommaso Ebhardt in Milan at firstname.lastname@example.org.
To contact the editor responsible for this story: Chad Thomas at email@example.com.