Fiat losses widen on Chrysler deal
MILAN (AP) — Fiat SpA’s deal to complete its purchase of Chrysler helped widen first-quarter losses, the Italian carmaker reported Tuesday following a daylong presentation in Detroit of its new five-year business plan for the combined automakers.
The Italian carmaker, based in the northern city of Turin, saw first-quarter losses widen to 334 million euros ($465 million) from 83 million euros last year, due to expenses related to the Chrysler deal logged in the first quarter.
Fiat CEO Sergio Marchionne reached a $3.65 billion deal in January to acquire the remaining 41.5 percent of Chrysler that was still owned by a union-controlled trust fund. The combined Fiat Chrysler Automobiles, which becomes official after a shareholders vote this summer, aims to join the top ranks of global automakers on the sales at Jeep, Alfa Romeo and Maserati -- which Marchionne sees as the carmakers’ brands with the greatest worldwide appeal.
Maserati already is pulling its weight, quadrupling revenues to 649 million euros in the quarter as sales of the Quattroporte and Ghilbli pushed volumes to 8,041 units from 1,304. Ferrari revenues rose 13 percent to 620 million euros on tighter volumes, part of a strategy to preserve the brand’s exclusivity.
The luxury brands, along with sales in North America and Asia, boosted group revenues 12 percent to 22 billion euros.
Despite higher volumes, profits in North America narrowed 4 percent to 380 million euros, with recall costs, research investments and higher depreciation eating into sales revenues. Earnings for Chrysler will be released at a future date.
Fiat’s European losses narrowed to 110 million euros, thanks to higher volumes as the European car market clawed back from record losses, while Latin American suffered due to the devaluation of the Venezuelan currency and an 11-percent drop in volumes as Brazil phased out incentives.
Net industrial debt increased to 10 billion euros from 7 billion euros at the end of 2013.
Shares in the combined company are expected to begin trading in New York and Milan by Oct. 1. The new company will be legally based in the Netherlands with a U.K. tax home while retaining traditional operational headquarters in Turin and Detroit.