August15

FCA’s 5-year Plan To Boost Global Sales by 59 Percent

FCA’s 5-year Plan To Boost Sales By 2018
FCA USA LLC, Fiat Chrysler Automobiles, Auto Recalls, Sergio Marchionne

2 years ago, CEO Sergio Marchionne admitted that the strategy is reliant on “near-perfect execution.” The five-year goal aims to boost global sales by 59 percent.

27 months since, FCA [also] “has had to march through a minefield of safety issues and recalls, sapping resources and causing unwanted distractions,” Automotive Newsreports.

FCA USA LLC is still facing a dealership lawsuit and a federal investigation and has had to “overhaul the way it reports monthly sales numbers, surrendering a key symbol of its post-bankruptcy resurgence: a 75-month streak of growing U.S. sales,” Automotive Newsfurther notes.

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However, Marchionne remains optimistic about achieving their goals.

“This leadership team believes that the numbers for 2018 are achievable,” Marchionne said after announcing a 25-percent increase in their Q2 net income.

On the other hand, investors aren’t quite as enthused — shares have gone down amidFCA’s assurance that it would be increasing its profit expectations to 5.5 billion euros for 2016.

In 2015, the NHTSA compelled FCA to sign a three-year consent agreement, which “included up to $105 million in civil penalties and mandatory actions that required sweeping changes to FCA’s recall processes,” Automotive News further elaborates.

Late last year, FCA booked “a $667 million charge to its global reserves to reflect the ‘current regulatory and recall environment.’” 

Amid Marchionne’s statement last week about the company finally being able to manage the recalls, FCA continues to be inundated with recall woes.

With only two years left in their five-year business plan, Marchionne is pushing the envelope even further, “in an effort to increase its profit margins.”

By early 2017, FCA “will end passenger car production to free up capacity to build even more high-margin Jeep SUVs and RAM pickups.”

“Just bear with us as we work our way through the details. But I think we’ll give you a better view at the beginning of 2017, as we launch into the second-last year of this plan and see whether we can bring it home,” Marchionne told analysts. Read more on this report from Automotive News

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