New Fiat Chrysler plan to put Marchionne to the test
By Agnieszka Flak
MILAN (Reuters) - Newly-merged Fiat Chrysler FIA.MI will unveil its long-awaited five-year plan on Tuesday, with chief executive Sergio Marchionne under pressure to show he can translate years of canny dealmaking into a thriving global autos business.
The 61-year-old has been at the helm of Italian carmaker Fiat for a decade, during which time he has won praise for a string of deals, including securing $2 billion from General Motors (GM.N: Quote) in 2005 for cancelling an option arrangement, and helping to rescue U.S. rival Chrysler from bankruptcy in 2009.
This year, he struck an agreement for Fiat to take full control of the now profitable Chrysler, creating the world's No. 7 carmaker and a platform for challenging industry leaders.
But amid all the dealmaking, Fiat has repeatedly missed sales targets as it delayed investments and made some bad design choices, and has seen its main European business lose share and plunge into losses during a six-year market slump.
Marchionne wants Fiat Chrysler to follow bigger rivals such as Volkswagen (VOWG_p.DE: Quote) by building global brands and strengthening its position in the fast-growing and high-margin market for premium cars.
He plans to revamp the luxury Maserati and upmarket Alfa Romeo marques, while building on the success of Chrysler's Jeep, and use all three brands to expand in Asia - the fastest-growing global car market, but a blind spot for Fiat Chrysler right now.
Investors are optimistic, sending Fiat shares up around 50 percent over the last six months to levels last seen in 2007, and boding well for the upcoming move of the merged group's primary listing to New York from Milan later this year.
There have been some early signs of success with the premium car strategy, and Marchionne has removed uncertainty over his future by extending his contract until at least 2017. Continued...