Just two days ago, we reported that Fiat Group CEO, Sergio Marchionne, said that he would make the North American market Alfa Romeo’s top priority.
Now the Italian automaker’s boss admits that his company is facing huge troubles in Europe as in the first nine months of 2011, the company's sales decreased by 12% compared to the same period last year, with its share in the European market dropping from 8.2% to 7.3%.
Even in its home market of Italy, which used to be a stronghold, Fiat sales for the first nine months of the year have hit their lowest mark in the past 20 years.
Marchionne does not have any delusions that next year the situation will improve: “2012 will not be a great year for the European market”, he told reporters. “Since 2008, Italy has lost 700,000 cars, which for Fiat means a loss of 210,000 cars. There is no point in looking for new models”, he added.
With Europe being –at the moment- a lost cause for Fiat , Marchionne is looking overseas to compensate for his company’s losses.
Right now, the Fiat-Chrysler alliance's biggest profit contributors are the U.S. and Brazilian markets, and that’s where it will focus its efforts. Marchionne denied, however, reports that Fiat will leave Italy, despite losing money - and fast.
At this point, all of Fiat’s five Italian plants are loss making. The management wants more flexible labor deals and increased productivity, something the worker unions react to, with the FIOM metalworkers’ union organizing a strike on Friday.
“It’s a very bad idea”, commented Marchionne on the strike. “It’s certainly no way to encourage investments in Italy.”
Despite Fiat shares losing almost 30% of their value in the first nine months of 2011, Marchionne is not worried. “We have enough liquidity to deal with our requirements for quite a while," the group's boss. "The good news is part of our business is in good shape and generating cash… Europe is a source of concern.”
Now, you’ll never guess which part of "their business" he’s talking about…
Story References: Reuters
