Fiat Chrysler limits Covid-19 losses, sees much better H2
A small profit in North America helped Fiat Chrysler Automobiles (FCA) to limit losses from the Covid-19 crisis in its second quarter, and the car maker forecast a "much, much better second half" ahead of its planned 2021 merger with France's PSA Group.
The Italian-American maker of Fiats, Alfa Romeos, Jeeps and Rams said on Friday it slashed advertising costs and saw net prices rise in its key North American market, where it focused on retail sales over lower-margin fleet business.
It also cut capital expenditure across the group, and expects to reduce the total for the full year by €1.5bn (roughly R30,518,280,000) to €8bn to €8.5bn (roughly R135,567,200,000 to R144,135,350,000).
FCA posted an adjusted loss before interest and tax of €928m (roughly R15,746,953,600) for April-June versus a forecast €1.87bn (roughly R37,545,467,393) loss in an analyst poll compiled by Reuters.
Earlier in the week, Ford Motor reported a second-quarter operating loss of $1.9bn (roughly R32,222,005,000). General Motors had an operating loss of $1.2bn (roughly R20,350,740,000).
In North America, FCA made adjusted earnings before interest and tax of €39m(roughly R783,082,170).
Chief executive Mike Manley said production in North America was back to pre-pandemic levels, apart from plants in Warren, Michigan and Toluca, Mexico, which are being retooled for new products.
"We expect a much, much better second half," he told investors on a conference call.
Milan-listed FCA shares were up 1.5% at 13.10 GMT, having been little changed before the results.
Manley said the group planned to launch a series of new Jeep models next year, including a new Wagoneer and Grand Wagoneer, and a redesigned Grand Cherokee.
Asked about electric pickup trucks coming from its competitors, Manley said FCA was "very committed" to electrifying its vehicles, adding: "Pickup trucks is a key franchise for us. We're not going to sit on the sidelines."
FCA, which is set to tie up with Peugeot maker PSA to create Stellantis, the world's fourth largest carmaker, said an ongoing investigation by European Commission competition authorities was not expected to delay the merger timetable.
Despite the pandemic, PSA earlier this week delivered a profit in the first half of the year.
FCA said its industrial free cash flow was minus €4.9bn (roughly R98,396,092,431) in the second quarter, with a slightly lower cash burn versus January-March.
It finished the quarter with liquidity of €17.5bn (roughly R351,470,700,000). That does not include €4.5bn (roughly R90,402,390,990) still available on its loan facility. Ford had liquidity of $40bn (roughly R678,472,000,000), and GM $31bn (roughly R525,815,800,000).