Fiat reported that its sales forecast for 2012 have fallen a staggering 500,000 units, adjusting the initial forecast from 2.7 million to a more modest target of 2.2 million units. Its Chrysler arm is forecasted to sell 2.4 million units next year.
Yet while forecasts have lowered, Fiat CEO Sergio Marchionne’s target remains high and maintains his ambition for 5.9 million total sales by 2014. By that measure, Fiat-Chrysler must gain an extra 1.3 million combined sales.
Massimo Vecchio, financial analyst at Mediobanka of Milan, Italy, says, “Marchionne’s 2014 volume target looks truly challenging, unless Fiat’s core markets can show a substantial rebound in the coming years, which looks unlikely now.”
While initial predictions made in 2010 for passenger car sales in the European Union plus Iceland, Norway and Switzerland were set at 14.6 million units next year, recent austerity measures will probably cause an adjusted decline to 13.4 million sales instead.
But more than economic anxiety, Fiat is also suffering from an aging product range, and is losing market share in Europe this year. Fiat’s market share within the European Union plus Iceland, Norway and Switzerland has fallen from 7.9 percent to 7.0 in just a year.
Morningstar’s automotive analyst, Richard Higert, adds his take, “Despite the probably downturn in Western European 2012 new vehicle demand, especially Italy, I think the company is expecting to benefit from the market onslaught it plans to unleash over the next three years with 35 new or significantly redesigned models, the bulk of which should come in 2013.”
Whether Marchionne’s leadership can lead Fiat back to stable profitability remains to be seen. In a previous article, Marchionne announced Fiat plans to slow investment and expansion activities amid shaky European economy.
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