Fiat Chrysler CEO Sergio Marchionne is well on his way to stripping the automaker of its significant debt while also growing profits and introducing improved new products, according to analysts and investors.
According to The Detroit News business editors Daniel Howes, Marchionne’s plan for FCA is going rather well. The publication reports investors raised the value of the automaker’s stock by 10.5 percentage points after it announced a 34 percent growth in profits during the first-quarter of 2017 – proof of the success Marchionne is having.
While some experts doubted Marchionne’s plan to kill off the Chrysler 200 and Dodge Dart and double down on SUV and pickup truck sales, it appears to be working out well. Consumers are continuing to buy profit-heavy SUVs and trucks at records rates and the cars FCA does push heavily, like the Dodge Challenger and Alfa Romeo Giulia, for example, have high margins relative to the 200 and Dart.
Marchionne was asked this week if he’d consider selling off FCA’s two most profitable brands, Jeep and Ram, to which he replied “yes.” The two could be worth more than $30 billion between them, however it would severely strip down FCA’s business and would leave it with just Dodge, Chrysler, Alfa Romeo and Maserati. Simplifying FCA’s business could be key to merging it with another automotive conglomerate, but it could be argued that without Jeep and Ram, two of its most desirable brands, no outside company would have much interest in FCA.
No matter his way forward, Marchionne appears to be on the right track. He and his crosstown rivals at Ford and General Motors also stand to benefit from a tax reform proposed by the Trump Administration designed to bolster domestic industries, which may further help Marchionne achieve his goals of making FCA profitable once again.