Fiat: Japan quake could cut European volumes

AP News
Posted: Apr 20, 2011 12:40 PM
Fiat: Japan quake could cut European volumes

Italian carmaker Fiat Spa says interrupted delivery of high-end radios and satellite navigation systems from Japan could result in a production drop in Europe of 50,000 to 100,000 units this year.

CEO Sergio Marchionne said Wednesday that most of the impact of the break to the supply chain _ due to last month's quake _ would be felt in the first and third quarters, and he expects a return to normalcy by October 2011.

He said suppliers were working "very effectively" for alternative supply bases for high-end electronics.

Fiat, which controls a 30-percent share of Chrysler, has previously said that the quake is expected to lift prices on some Chrysler models due to delays in component supplies. It will release more details when earnings are announced next month.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

MILAN (AP) _ Italian carmaker Fiat Spa on Wednesday said it returned to a profit in the first quarter, from a loss a year earlier, on increased sales of luxury brands and strong performance in the components business.

Fiat, which controls Chrysler with a 30 percent stake, made a net profit attributable to majority shareholders of euro29 million ($41.5 million) while revenues rose 7 percent to euro9.2 billion. Luxury brand Ferrari and the Magnetti Marelli components business saw double-digit gains.

Fiat's Group Automobiles, the unit which owns the Fiat, Alfa Romeo and Lancia brands, saw a 2.6 percent increase in revenues to euro7 billion.

The success of the Alfa Romeo Giulietta and light commercial vehicle sales like vans offset weaker sales for passenger cars, Fiat said.

It is the company's first quarterly earnings report since the January spinoff of the industrial unit, which makes trucks and farm and construction vehicles. CEO Sergio Marchionne said the spinoff would free up the vastly different businesses to pursue their own strategies and industrial tieups.

Shares rose 3.42 percent to euro6.48 in Milan trading.

Fiat SpA, which since the demerger is focused on cars, light commercial vehicles and related components, confirmed 2011 targets of trading profit _ or earnings before interest, taxes and one-time items _ of between euro900 million and euro1.2 billion on revenues of about euro37 billion.

Fiat SpA's trading profit rose 9 percent on the year while Fiat Group Automobiles saw its trading profit fall 15 percent as European volumes declined and investments in new models increased.

The car business shipped 245,300 units, down 11 percent on the year. Fiat saw its market share in Europe slide from 7 percent to 5.3 percent as demand for alternative fuel vehicles waned.

The luxury market, however, roared back to life. Ferrari sales in its main market of North America rose 3 percent to 452 vehicles, while in China they rose 3.7 percent to 153 vehicles.

Trading profit for components was up 45 percent to euro61 million a year earlier, thanks to strong results in the Magneti Marelli and Fiat Powertrain units.