Fiat-Chrysler (NYSE:FCAU) 5-Year Plan Due Friday

Fiat-Chrysler (NYSE:FCAU) 5-Year Plan Due Friday

Fiat-Chrysler (NYSE:FCAU) 5-Year Plan Due Friday

$FCAU, $RACE

Fiat Chrysler (NYSE:FCAU) boss Sergio Marchionne, 65 anni, is expected to outline new plans for electric and hybrid cars in a strategy presentation Friday, 1 June, aiming to ensure the world’s 7th-largest carmaker remains the Top performer in the worldwide automotive sector behind Ferrari (NYSE:RACE)

Mr. Marchionne will present FCA’s strategy to Y 2022, his final contribution to the company he turned around and multiplied in value through 14 years of canny deal-making.

Mr. Marchionne had long refused to jump on the EV train, saying he would only do so if selling battery-powered cars could be done at a profit.

Germany’s Volkswagen, Daimler, BMW and U.S. rivals GM and Ford have committed to spending billions of euros each in coming years to try produce profitable cars powered by cleaner fuels.

We expect a clear plan from Fiat-Chrysler for the next 5 years.

And that about 50% of the FCA fleet will incorporate some elements of electrification by Y 2022, while luxury marque Maserati may lead FCA’s electrification drive by making all new models due after Y 2019 electric.

‘Fiat-Chrysler is a gift auto sector investors, and Mr. Marchionne has a strong track record of creating shareholder value through spin-offs the Key examples are Ferrari, and CNH Industrial. And the pending spinoff of parts maker Magneti Marelli will boost the number, raising expectations of more deals to come.

We expect Fiat-Chrysler to focus on Jeep and Dodge plus adding Alfa Romeo to the luxury line with Maserati, and wind down Fiat marketing in the US. There are several new Alfa models on the road or coming in the near future.

Investors are pleased with what Mr. Marchionne achieved in North America, which now makes about 75% of the companies of profits.

Its retooled US plants are boosting output of lucrative SUVs and trucks, while ending production of unprofitable sedans.

The move got Fiat-Chrysler close to erasing the margin gap with its larger US rivals and set it on course to erase debt this year.

Mr. Marchionne has set in motion a similar shift in Europe, where Italian plants are being revamped to produce Alfa, Jeep and Maserati, while output of some Fiats is being shifted to lower-cost locations elsewhere or discontinued.

Mr. Marchionne multiplied Fiat’s value 11X since he took charge in June 2004.

The notion of a Maserati or Alfa Romeo spinoff are out of the question as they are the new flagship brands at Fiat-Chrysler.

The 2X’ing of Fiat- Chrysler’s stock in the last 12 months indicates that Mr. Marchionne doing a fine job and that he will had off a very strong company to his successor next year. And that the Agnelli Family is very pleased.

The Big Q: Will Mr. Marchionne wear a tie?

Symbol Last Trade Date Change Open High Low Volume
NYSE:FCAU 22.21 30 May 2018 1.29 21.6 22.38 21.5 7,774,200
HeffX-LTN Analysis for FCAU: Overall Short Intermediate Long
Neutral (-0.10) Neutral (-0.06) Neutral (-0.14) Neutral (-0.10)

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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