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Fiat Chrysler's Q3 profit boosted by strong North American earnings

MILAN, Italy — Fiat Chrysler Automobiles (FCA) reported a 17 percent jump in third-quarter adjusted operating profit on Tuesday, helped by a strong performance in its key North American market and improving operations in Europe and Latin America. The world's seventh-largest carmaker still makes the lion's share of its profits in North America, so improving, or at least maintaining, its margins there is a key focus. The carmaker reported an 8 percent adjusted operating profit margin in the region, up from 7.6 percent a year ago, despite a drop in sales and shipments. "FCA's profitability in North America remained strong in the quarter despite a weakening market there," a Milan-based analyst said. FCA's profitability compares with an 8.3 percent North America margin reached in the quarter by bigger U.S. rival GM , showing CEO Sergio Marchionne making progress towards his goal of closing the margin gap with GM and the company's other U.S. rival, Ford, by 2018. The company's confirmation of its full-year outlook also pushed shares higher, a trader added. The stock was up 2.8 percent by 1129 GMT, outperforming a 1 percent rise in the European auto index. FCA has been retooling some U.S. factories to boost output of sport-utility vehicles (SUVs) and trucks while ending production of some unprofitable sedans to strengthen profitability as the U.S. car market comes off its peak. The company said a drop in North America shipments due to lower fleet sales and discontinued models was partially offset by higher deliveries of Ram trucks and two models from the Alfa Romeo stable: the Stelvio sport utility vehicle and Giulia sedan. Profitability also improved in Europe, helped by sales of the Stelvio and the new Jeep Compass, and Latin America, while margins at Maserati remained strong at 13.8 percent due to strong demand for its first SUV, the Levante. In a later conference call, investors are looking for hints on the new strategy to 2022 which the company promised to unveil early next year. Chief Executive Sergio Marchionne said earlier this year that FCA would streamline its portfolio and that components businesses, including Magneti Marelli, would be separated from the group, possibly via a spin-off. While FCA confirmed its targets this year, doubts remain about its exposure to a weakening U.S. market, recall costs and potential fines over emissions after it was targeted by European and U.S.

Chrysler extends fuel tank warranties on LX cars, NHTSA ends probe

The National Highway Traffic Safety Administration has ended its investigation of 153,817, 5.7-liter and 6.1-liter Hemi V8-powered 2006 Chrysler 300, Dodge Charger and Dodge Magnum models after reports of stalling. Chrysler has responded by granting a lifetime warranty on the fuel tanks for these vehicles.
NHTSA received 299 reports of engines stalling while the models were stopped or driving at low speeds, and began an investigation. The government agency found that the control valve shutoff float in the V8s' 19-gallon fuel tank could malfunction if the fuel had too high of an ethanol content. In many cases, the valve would break in the open position, allowing the tank to be overfilled, which would then cause the cars to stall. However, there were no accidents reported, and the vehicles could be restarted immediately.
There will not be a recall on these vehicles because, "the condition represents a low risk to motor vehicle safety and is adequately addressed by Chrysler's extended warranty," NHTSA said to The Detroit News.

Hellcat no help to Fiat-Chrysler's bottom-of-the-pile mpg average

What, you expected the "fastest muscle car ever" to help fleetwide fuel economy? Nope, don't think that's going to happen. That means Fiat Chrysler will likely to continue to languish at the bottom of the heap when it comes to fleetwide fuel economy among the largest automakers serving the US, especially as the automaker starts to sell its Dodge Challenger SRT Hellcat. A few hundred Fiat 500E electric vehicles aren't going to turn the trend around. See, Chrysler has once again finished at the bottom of the list when it came to fleetwide fuel economy among automakers for 2014 model-year vehicles, according to a preliminary study by the US Environmental Protection Agency. Chrysler and Fiat had an average of 21.1 miles per gallon. That substantially lagged the overall 24.2 mpg average, but it was an increase from the company's 20.9 mpg average last year and the 20.1 mpg average two years prior. For 2014, General Motors had the second-worst fleetwide fuel economy at an even 22 mpg. Fiat Chrysler does say it's working on improving its fuel economy, according to Automotive News. The company plans on making its inline-four-cylinder and V6 engines smaller, and will sell more vehicles with eight- and nine-speed transmissions. Heck, there's even a plug-in hybrid version of the Chrysler Town & Country minivan in the works for late 2015, and the company can tout fuel-efficiency gains with the Chrysler 200 and Jeep Cherokee. We would be remiss if we didn't note that, compared to its muscle-car forefathers, the Hellcat actually performs pretty well at the pump. Last month, word got out that the 2015 Challenger Hellcat, equipped either with a six-speed manual or an eight-speed automatic transmission, got a combined fuel economy of 16 mpg. Heck, the automatic-tranny version got 22 mpg on the highway. And that's for a car with 707 horsepower and a 10-second quarter-mile time. Still, with the pedal floored, the car can burn a gallon and a half of fuel per minute. Ouch.