Fiat Chrysler became the third leading US carmaker this week to beat market expectations for results as the relative resilience in the company’s home market managed to limit the group’s losses.
Although the carmaker still fell to an overall €1bn loss in the second quarter, it scraped a profit in its North American heartland to defy gloomier market forecasts.
The results came hours after rival Ford beat expectations with a $1.5bn loss, and in the same week General Motors also bettered forecasts with a $758m loss.
FCA chief executive Mike Manley told investors the US market has been improving steadily each month since April.
“The reality is each day brings different information . . . the outlook is reflective of the fact there will be ups and downs,” he said.
The Jeep- and Ram-owner suffered a global sales drop of 63 per cent to 424,000 vehicles, with revenues declining 56 per cent to €11.7bn, as the global pandemic hit consumer spending.
In North America, the company’s only significant profit driver, earnings fell to just €39m, a decline of €1.5bn compared with the same quarter a year earlier.
Sales in the region fell by close to two-thirds to 225,000, though the group enjoyed a “significant” improvement in June.
The company, which is listed in New York and Milan, raised expectations for the North American market this year to 15m vehicle sales, up from 12.5m three months ago.
The fall in its US earnings was compounded by its struggling European and Latin American regions falling back into loss.
Maserati, the company’s luxury brand, slimmed its loss by €20m to €99m, while losses in Asia-Pacific deepened to €59m.
The company said the pandemic had “further underlined the compelling logic” for its €44bn merger with France’s PSA to become “Stellantis”, which is being investigated by European competition authorities and is expected to close next year.
Despite every carmaker bar France’s PSA posting losses for the months April-June as the pandemic hammered sales, the industry is quietly confident about the second half of the year in spite of the rising global number of coronavirus cases.
While some carmakers, including FCA, suspended financial guidance for this year, those that have kept their forecasts point to a small global recovery.
Volkswagen, which made a €1.4bn loss in the first half of the year, said on Thursday it expected to be profitable for the entire year.
On Friday, Jaguar Land Rover posted a loss of £413m for the quarter to June, and said it was on track to remain lossmaking in the three months to September.
Britain’s largest carmaker, which is owned by Tata Motors, also pledged to cut another £1bn from costs in the year to March 2021, raising its previous target of £1.5bn to £2.5bn.
In March, the group announced 1,000 job losses as part of generating £1bn in cost savings. On Friday the group added another £1bn to its cutbacks, but declined to give details on any further job losses.
Sales in the three months to June fell 42 per cent to 74,067 vehicles, with revenues down 44 per cent to £2.9bn.
Earlier in the week, JLR announced former Renault boss Thierry Bolloré as the company’s new chief executive, who will take over from Ralf Speth in September.
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