Fiat CEO sees ‘significant opportunities’ for auto partnerships

Bloomberg

Fiat Chrysler Automobiles NV’s CEO Mike Manley said he sees “very significant opportunities” to partner with other automakers on autonomy and electrification projects in the next two to three years.
Fiat is seeking to fix a business that is losing money in Asia and Europe while sales in North America, which generates the lion’s share of the company’s profits, are slowing.
Manley told analysts on a conference call he’s open to striking a deal with peers as European operations struggle with high labour costs at production sites in Italy and spending on electrification surges.
Manley, who succeeded Sergio Marchionne in July a few days before he died, is already expanding his collaboration on high-margin commercial vans in Europe with Peugeot-maker PSA Group. The CEO said he would “absolutely” consider using PSA’s electric-vehicle architecture as the automaker works to meet tougher emissions rules in the region. The company is exploring a partnership with PSA to collaborate on a “super platform,” Bloomberg reported earlier.
Fiat will spend $2 billion over the next three years on regulatory emissions credits to ensure it’s compliant as it rolls out a slew of new plug-in hybrid
and battery electric vehicles, whose appeal to consumers is still uncertain.
“I believe the next two to three years are going to yield very significant opportunities” to partner with other automakers, Manley said on an earnings call. “FCA will be playing an active, constructive role in how that future is defined.”
Manley said a new Jeep pickup and heavy-duty Ram truck will boost sales and profit margins in the second half of the year.
“The results are slightly below my expectations but they’re not a significant surprise,” Marco Opipari, an analyst with Fidentiis in Milan, said by phone.
Profit in North America fell as US deliveries slipped three percent in the first quarter, with only the Ram brand posting volume growth, though higher prices are bolstering results.
Manley warned that the first half of 2019 would be weaker than a year ago because the company is no longer benefiting from selling two versions of
its Jeep Wrangler — the latest generation and a now-retired predecessor model.
Fiat’s business in Asia lost money for the fourth consecutive quarter as vehicle shipments fell 30 percent in China.
The company announced a restructuring of Fiat’s Chinese joint venture with Guangzhou Automobile Group Co, consolidating sales operations and appointing new leadership to “more rapidly respond” to changes in the local market. Jeep brand sales have been a disappointment in China, which is experiencing its first auto sales slowdown in almost three decades.
Europe lost 19 million euros in the first quarter as volumes sank and the company continued to search for cost cuts as tougher emissions regulations force the automaker to spend more on electrification.