Fiat Chief Eyes Annual Sales of 7 Million After Chrysler Merger

Mar 31, 2014 8:26 am ET

March 31 (Bloomberg) -- Fiat SpA Chief Executive Officer Sergio Marchionne said the Italian automaker will have the potential to boost annual deliveries as much as 55 percent to 7 million vehicles following the merger with Chrysler Group LLC.

“We have the capability to reach that level of production,” the CEO said today at the automaker’s annual meeting in Turin. “We are equipped to go on the attack against the giants in our industry.”

Marchionne, who will unveil his strategic plan for the combined company in May, has said that automakers will need to sell in the magnitude of 7 million vehicles per year in the future to remain competitive. Fiat and Chrysler deliveries this year will total 4.5 million to 4.6 million vehicles, he said.

Fiat bought full control of Auburn Hills, Michigan-based Chrysler in January, and Marchionne plans to combine the manufacturers into a company registered in the Netherlands, with a primary stock listing in New York. His strategy is to transform the two regional players into a manufacturer with the scale to challenge General Motors Co. and Volkswagen AG.

The CEO estimates that the merged company, to be named Fiat Chrysler Automobiles NV, ranks as the world’s seventh-largest carmaker. VW, the world’s second-biggest auto manufacturer, is targeting sales of more than 10 million cars and trucks in 2014. Toyota Motor Corp. is the world’s No. 1.

Fiat rose as much as 26 cents, or 3.1 percent, to 8.50 euros and was trading up2.6 percent as of 2:25 p.m. in Milan. The stock has gained 42 percent this year, valuing the company at 10.6 billion euros ($14.6 billion).

Strategic Plan

The CEO will publish a business plan in five weeks detailing new models and financing once the merger is done. Marchionne, who had a target to list the combined company in New York by Oct. 1, said this month that the process may be delayed by 30 to 90 days.

With the purchase of the rest of Chrysler, all obstacles have now removed to the combination, he said today.

“Fiat and Chrysler have, in reality, already been operating for some time as a single entity,” the CEO said.

Today’s gathering is likely to be the last annual meeting that the carmaker holds in Italy since the manufacturer’s founding there in 1899. Future such sessions will be held in the Netherlands. Fiat’s investors will still hold an extraordinary meeting in Turin in the coming months to approve the combination, which is backed by the controlling Agnelli family.