Fiat changes name, disappoints with profits

MILAN, ITALY: Italian car company Fiat announced on Wednesday (29 January) it was changing its name to Fiat Chrysler Automobiles (FCA) after completing the purchase of US car manufacturer in a move that Fiat chairman John Elkann said "heralded a new chapter".

"A journey that started over a decade ago, as Fiat sought to ensure its place in an increasingly complex market, has brought together two organisations each with a great history in the car industry and different but complementary geographic strengths," he said.

"FCA allows us to face the future with a renewed sense of purpose and vigour," Elkann added.

The group statement said: "In order to establish a true peer to the major global automotive groups, in both scale and capital market appeal, the board has decided to establish Fiat Chrysler Automobiles N.V., organised in the Netherlands, as the parent company of the group."

The company said shares would be listed in New York and Milan and Fiat shareholders would receive one FCA common share for each Fiat share they hold. FCA will be resident in the UK for tax purposes.

Tenacious

"Today is one of the most important days in my career at Fiat and Chrysler," Fiat's chief executive Sergio Marchionne. "We have worked tenaciously and single-mindedly to transform differences into strengths and break down barriers of nationalistic or cultural resistance," he said.

FCA said it would continue with its same mission and keep its manufacturing plants in Italy and elsewhere around the globe, with no impact on headcount, amid concerns that Fiat would leave Italy.

However, Fiat produced a disappointing set of results for 2013 that failed to meet its forecasts, or analysts expectations. Fiat has waived all dividend payments as a result of the poor performance.

Fiat made a trading profit of €931m for the fourth quarter of 2013, less than the €1.5bn forecast by analysts. It also cut its 2014 forecast more than expected, to between €3.6bn and €4.0bn - down from a previous estimate of up to €5.2bn.

"The directors decided not to recommend a dividend payment on Fiat shares, given the company's desire to maintain a balanced level of liquidity following the acquisition of the minority stake in Chrysler Group," the company said in a statement.

Fiat's results have been hit by the plunge in sales on its domestic market and have been propped up by Chrysler's return following a bankruptcy procedure for the US car company.

Source: AFP via I-Net Bridge



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