Fiat Chrysler will make more electric cars
In his last big presentation as CEO of Fiat Chrysler before retiring, Sergio Marchionne announced a big investment push to make more electrified cars, while acknowledging that traditional engines will continue to dominate production for some time.
Unveiling the company’s plans for the next four years, Marchionne said Fiat Chrysler will invest nine billion euros ($10.5 billion US) as it tries to catch up in the market for gas-electric hybrids and fully electric vehicles, without forsaking a core market that still wants internal combustion engines.
“Reducing our dependence on oil is one of the single, greatest challenges that our society faces,” Marchionne told financial analysts as he presented the business plan that will be a final legacy to the company he created through the merger of Fiat with failing Chrysler.
“At FCA, we believe there is no single solution, no magic formula, to solve this problem. We believe to achieve a quantum leap, the entire system — political, economic and industrial — needs to work together with the right measure of realism based on finding the appropriate balance between consumption levels, cost and efficiency.”
“At the same time, conventional internal combustion engines will continue to be in the vast majority of our productions.”
The daylong presentation focused on plans for the brands that drive revenues: Jeep SUVs, Ram trucks and premium brands Maserati and Alfa Romeo. CFO Richard Palmer said by 2022 those brands with Fiat Professional would represent 80 per cent of revenues, compared with 65 per cent today.
Palmer said Fiat expected to recover 65 per cent of electrification costs through higher prices, while 15 per cent of capital expenditures of 45 billion euros in the period would be invested in conventional engine technology.
Notably absent were the marquee brands: Fiat and Chrysler, which both represent the lessprofitable passenger cars currently off consumers’ radar, particularly in the United States, where Fiat Chrysler makes more most of its profits, but also in fast-growing China.
The business plan is Marchionne’s grand finale, 14 years to the day after he was named Fiat CEO. His tenure has included landmark deals, including the Fiat merger with bankrupt U.S. carmaker Chrysler and the spinoffs the industrial vehicle business and sports carmaker Ferrari.
The 65-year-old Italian-Canadian has said his successor as CEO will come from within the company.
In a break from fashion tradition, Marchionne unzipped a knit cardigan to reveal a blue tie — the first, he said, he has worn in a decade.
It is a gesture he had promised if Fiat eliminated debt, which he said will happen by the end of the month. Marchionne is famous for unfailingly wearing navy blue cashmere sweaters and never a tie, no matter the event.
Marchionne said debt is “a legacy that has dogged both Fiat and Chrysler for decades,” and that erasing it is “a significant milestone.”
All new models for the Jeep, Maserati and Alfa Romeo brands launched in the next five years will have some version of electrified powertrains, while eliminating diesels, executives said. Truck maker Ram will limit its alternative powertrains to a high-end premium truck, the TRX, which will compete with Ford’s Raptor.