Posted by Dale Buss on July 31, 2012 11:16 AM
Everything is coming up red, white and blue for Fiat these days — everything that's profitable, anyway. Once viewed as a long-shot and even an irresponsible lark by some, Fiat CEO Sergio Marchionne's investment in taking over Chrysler now looks more briliiant every day. That's especially so given what's befalling Fiat in Europe.
Chrysler has once again underscored its new chief's wisdom by reporting an $800-million turnaround in its bottom line during the second quarter. It's up from a year ago thanks to rising U.S. sales and stronger pricing. And for the year, Chrysler said, it expects an 18-percent revenue gain on continued strong increases in U.S. vehicle shipments.
"They are tearing the cover off the ball when it comes to volume, revenue and gaining market share," Richard Hilgert, an analyst for Morningstar, commented to the Wall Street Journal.
What's more, Chrysler continues to improve while Ford's progress has slowed and General Motors seems to be moving backward as Japanese rivals this year claw to recover U.S. market share that they lost last year. And Chrysler is making all this progress with a product portfolio that still has yet to be dramatically overhauled the way that GM and Ford have redone their vehicle lineups over the last couple of years.
Rather, Chrysler has been making much of its progress on the back of lower labor costs (cue strike speculation in Canada) and improvements in vehicle quality. The new Dodge Dart small car now moving into dealer showrooms is the only all-new car introduced under a Chrysler marque since Fiat took over in 2009. Once Chrysler introduces more substantial new products in the months ahead, it is likely to continue the momentum.
In the meantime, Fiat also got a dose of good news from the woebegone front in Europe, where eurozone difficulties, recession and lost consumer confidence have been plaguing sales, especially in the mainstream market. Fiat posted a narrower loss than a year ago, though largely because Marchionne cut investment in the region and delayed introduction of new models.
So despite what happens in the Olympics, Fiat executives can be forgiven these days if they're overheard muttering "USA!"