Fiat registers loss on Latin America

The President of Fiat, Sergio Marchionne, announced yesterday, during a teleconference about the results in the fourth quarter of 2013, that the automaker can produce models of the Jeep brand in Brazil in 2015, despite the fall in sales and profit in Latin America. The company's net revenue fell 23.4 percent in the region in relation to the four quarter of 2012, totaling € 2.22 billion.
The company finished the last quarter of the year with an operating loss of € 28 million in the Latin American market, where the result was influenced by the exchange rate and inflation, which increased its production costs. Fiat blamed the withdrawal of rebates in the tax on industrialized products (IPI) in Brazil by the drop in sales. The basis for comparison was also unfavorable, since demand was heated in the fourth quarter of 2012.
About the plant that Fiat is building in Goiana, Pernambuco, the automaker's Chief Executive admitted that the operation will be delayed. "The new plant will be ready in 2015," said Marchionne. The estimate was to start production this year. Sought, the Brazilian subsidiary of Fiat not manifested on the statements.
According to the published yesterday, sales of light commercial vehicles and suffered decline of 18% in the Brazilian market, to 188 million units in the fourth quarter. The country is the most important in Latin America, concentrating more than 80% of the volume sold in the region.
In January, said Marchionne, the Brazilian market has behaved well for Fiat the automaker remained in first place in the country, but its market share decreased 1.8 percentage point Brazilian to 21.5% in 2013.
In the opinion of the Executive, the prospects are good. Inflation, he said, will only represent a risk if the devaluation of the real against the dollar and euro strengthen. The exchange rate is crucial to the prices and, if the actual continue weakening, the cars will be more expensive. But, if the current scenario remain, the automaker designs achieve a double-digit operating margin until 2016-in 2013, the margin was 4.9% in the whole Latin America.
The accumulated 2013, Fiat reached € 9.97 billion in net revenues in Latin America, which represented a fall of 9.9% for 2012. The operating profit in the year retreated 52%, to € 492 million. The Fiat designs deliver of 4.5 million to 4.6 million cars worldwide in 2014, which presentaria an increase in the range of 3.4% to 5.7%. In Latin America, the expectation is that the group sale of 900 thousand to 1 million units. In 2013, 950 thousand vehicles were sold in the region.
Yesterday, the Group announced that, after buying 100% of Chrysler, will adopt a unique identity for the Organization resulting from the merger between the two automakers. This involves changing the corporate logo of the holding, which shall be represented by the acronym FCA (Fiat Chrysler Automobiles). The automaker acquired the 41.5% of the capital that still did not have the American automaker.
But the corporate change and global profit of almost € 2 billion in 2013-double recorded in 2012, against a tax credit--were not enough to divert attention from investors to worsening operating performance and the suspension of the payment of dividends. The automaker's shares fell 5.9 percent during the day.
Fiat expects an improvement in sales in nearly all regions of the world. In North America, the manufacturer foresees selling 2.4 million units, or 7.2 percent more. "We're not worried about the prices of our cars in the United States," assured Marchionne. (With international agencies)