Traverse City Record-Eagle

Business

April 30, 2013

Fiat reports 1Q loss as sales slip in Europe, U.S.

MILAN (AP) — Weak sales in Europe and lower profits at U.S. partner Chrysler pushed Italian carmaker Fiat to a loss in the first quarter.

Fiat SpA on Monday said it lost 83 million euros ($108 million) during the first three months of the year, compared with a restated first-quarter profit of 35 million euros in the same period of 2012.

Profits at Chrysler LLC, which Fiat controls, dropped 65 percent in the first quarter. Shipments of its cars and trucks were down in preparation for new vehicle launches, such as the new Jeep Cherokee, which goes into production in the second quarter. Fiat’s European branch narrowed its losses to 157 million euros, from 207 million euros a year earlier.

Overall revenues were down 2 percent to 19.75 billion euros, as strong sales in Latin America and Asia and demand for its premium brands helped compensate for declines in North America and Europe. Revenues were down 3 percent to 10 billion euros in North America and 4 percent to 4.4 billion euros in Europe, where the financial crisis has badly hurt consumer spending.

“The rest of the year is going to be challenging,” Fiat and Chrysler CEO Sergio Marchionne told analysts. “We are fully aware these are unsettled markets.”

Fiat said it projects another 5 percent decline in European sales this year, and forecast sales in Italy would drop to 1.3 million, after contracting 20 percent to 1.4 million in 2012.

“We probably have not seen the bottom of this market,” Marchionne said, adding that the fact that Italy swore in a new government over the weekend and that Europe was turning away from austerity could help boost consumer confidence.

“I think the combination of all of this will determine a different tone, and the dialogue in Europe is going to be a lot more positive, and I think that is the first step for the recovery of the European market,” Marchionne said.

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