The star of the global automotive industry is not GM or the general public. It is Italy's Fiat, because it most wants to change from an ugly duckling to a white swan. However, after paying a huge reorganization cost and reporting a loss of 590 million euros in the first half of the fiscal year, the ambitious plan for the expansion of Fiat's President Malchieu has recently taken a "bristle brake."
Loss of 590 million euros in the first half of the fiscal year
Fiat announced its performance report for the first half of the fiscal year last week. During the period, the group made a total loss of 590 million euros, compared with a profit of more than 1 billion euros in the same period last year. In the first half of the year, Fiat Group’s total revenue was 24.5 billion euros, a decrease of 23.8% year-on-year. The group’s operating profit fell from 1.9 billion euros in the same period of last year to 0.3 billion euros. For this fierce contrast, Fiat said that in addition to the provision of the residual value of inventory and rental vehicles, mainly the cost of restructuring.
The losses in the first half of the fiscal year mainly came from the first quarter, and in the loss of 590 million euros, the first quarter accounted for more than 400 million euros. The Fiat Group stated in its statement: “The global economic crisis continues to have a serious negative impact on the market demand of all groups of the Group, but compared with the first quarter, some markets have already shown signs of improvement.â€
In the vehicle manufacturing business, both Fiat and Iveco's sales both declined. Among them, a total of 1.06 million Fiat cars were sold, a year-on-year decrease of 12.6%. Affected by the overall downturn in the commercial vehicle market, Iveco's auto sales fell by a larger margin and only 47,000 vehicles were sold, a year-on-year drop of 60%.
Western European car sales were 630,000, down 12%. Fiat has a strong 65% year-on-year growth in the German market, making up for the decline in sales in Italy, France, the United Kingdom and Spain. In another major market, Brazil, Fiat’s market share has dropped slightly, staying at 24.5%, still the leading brand in Brazil. In the Western European market, Fiat Auto's market share reached 9.2%, an increase of 0.9%, maintaining the ranking of the fourth largest automaker. In the German market, market share even rose from 2% to 4.5%.
Fiat expects that the Group's global sales will drop by 20% in 2009, with a net profit of approximately 100 million euros. It is estimated that the annual restructuring costs will be approximately 500 million euros. On the second day of the financial report announcement in the first half of the year, the Fiat Group announced the issuance of 3-year, high-yield bonds worth 1.25 billion euros. The proceeds of the issuance will be used for general corporate operations and financing needs.
Malchonet contraction expansion plan
Fiat's performance made its president Malchoi no longer aggressive. It is Malchone's chance to use the economic crisis to make Fiat the loser who never made money to become the leader in the global automotive industry. Fiat not only purchased Chrysler in the United States, but also launched plans for the acquisition of GM Europe.
Malchoney previously believed that in the post-crisis era, an automobile manufacturer must survive to an annual production of 5.5 million to 6 million vehicles. But now he has changed his mind. His latest statement is that Fiat and Chrysler will achieve an annual output of 4 million cars. This output is enough, although Fiat will continue to pay attention to other (torture) cooperation opportunities.
Fiat's biggest advantage at present is small car technology. However, the industry believes that although Fiat acquired Chrysler, providing Americans with a small-car platform, it is still unclear how to return to the US market. Fiat and Chrysler, who are on two continents, are also challenging to achieve efficient cooperation under the leadership of a president.
Malchow had previously wanted to separate Fiat Auto from other businesses in the group, but the plan is also expected to be stranded.
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