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Stellantis reports surprising 2020 results, is 'off to a flying start'

MILAN — Low global car inventories and cost cuts should boost Stellantis's profit margins this year, though a shortage of semiconductors and investments in electric vehicles could weigh on results, the newly-formed automaker said on Wednesday. The forecast came as Stellantis, created by the January merger of Peugeot-maker PSA and Fiat Chrysler (FCA), reported better-than-expected results for 2020 that sent its shares up around 3% in morning trading. "Stellantis gets off to a flying start and is fully focused on achieving the full promised synergies (from the merger)," Chief Executive Carlos Tavares said in a statement. Stellantis is the world's fourth largest carmaker, with 14 brands including Fiat, Peugeot, Opel, Jeep, Ram and Maserati. It said 2021 results should be helped by three new high-margin Jeep vehicles in North America and a strong pricing environment there. The U.S. market has driven profits for years at FCA and starts off as the strongest part of Stellantis. The group's guidance assumes no more significant lockdowns caused by the global COVID-19 pandemic, which shuttered auto plants around the world last spring. Stellantis should also get a lift as its starts to implement a plan aimed at delivering over 5 billion euros a year in savings, without closing any plants. Tavares has also pledged not to cut jobs. But a pandemic-related global shortage of semiconductors, used for everything from maximizing engine fuel economy to driver-assistance features, could hurt business. Auto industry executives have said the shortage should ease by the second half of 2021. Stellantis said its "electrification offensive" could also weigh on results this year. Automakers are racing to develop electric vehicles to meet tighter CO2 emissions targets in Europe and this week Volvo joined a growing number of carmakers aiming for a fully-electric line-up by 2030. Stellantis plans to have fully-electric or hybrid versions of all of its vehicles available in Europe by 2025, broadly in line with plans at top rivals such as Volkswagen and Renault-Nissan, although Stellantis has further to go to meet that goal. The carmaker is targeting an adjusted operating profit margin of 5.5%-7.5% this year. That compares with a 5.3% aggregated margin last year: 4.3% at FCA and 7.1% at PSA excluding a controlling stake in parts maker Faurecia, which is set to be spun-off from Stellantis shortly.

Is your new-car warranty good at the race track?

We've all heard the horror stories. Your buddy knows a girl that was dating a guy whose best friend's brother once broke his brand-new, recently purchased performance car while making runs at a drag strip or laps at a track day, and the manufacturer wouldn't cover the repair under warranty. True story? Urban legend? Complete crap? Yes, no, maybe. One thing's for sure: Automotive warranties have always come with caveats. In 1908, an ad in the Trenton Evening Times clearly stated: "All Ford Cars Guaranteed for One Year." Although it changed over time, by 1925 the Ford New Car Guarantee only covered 90 days on material and 30 days on labor, and it clearly stated that that there was "No guarantee whatever on Fan Belts, Glass, Bulbs, Wiring, Transmission, Bands, Hose Connections, Commutator Shells, Rollers, Spark Plugs or Gaskets." Whether or not Ol' Henry would pay to fix your Model T if you broke it shaving a tenth off your lap time at the local board track seems to be lost to history. We're guessing no. But what about today? Do new-car warranties in 2017 cover cars when they are driven on race tracks? We researched the warranties of 14 auto brands to find out, and the answer is yes, no, maybe, depending on the brand, in some cases the model, and whether or not your car is modified from stock. Acura has been out of the high-performance car game for a number of years, but jumps back into the party in 2017 with its hybrid-powered $173,000 NSX supercar. And Acura's warranty, as well as Honda's, clearly states that it does not cover "the use of the vehicle in competition or racing events." View 33 Photos So we asked Sage Marie, Senior Manager of Public Relations for Honda and Acura. "If the car is stock, the warranty covers it on a track just as it does on the street. No question," he told us. "However, if the car is modified, say with slick tires or other components that would put higher stresses on the vehicle's parts and systems, then we would have to investigate the circumstances further." Marie went on to say the same would be true for any Acura model or Honda vehicle, including the new 2017 Honda Civic Si. This became a common theme. Chevrolet actually started this practice with the fifth-generation Camaro on the high-performance ZL1 and Z/28 models.

Fiat Chrysler and Peugeot boards meet to finalize merger

MILAN/PARIS — The boards of Fiat Chrysler Automobiles and Peugeot will meet separately on Tuesday to discuss finalizing an initial agreement for a $50 billion merger to create the world's number four carmaker, sources said. A source close to FCA said the two companies could announce the signing of a binding memorandum early on Wednesday, followed by a conference call to explain further details later in the day. The two mid-sized carmakers announced plans six weeks ago for a tie-up to help them deal with big challenges in the industry, including a global demand downturn and the need to develop costly cleaner cars to meet looming anti-pollution rules. Ahead of the meetings, entities representing the Peugeot family, Etablissements Peugeot Freres (EPF) and FFP, unanimously approved a proposed memorandum of understanding for the planned merger, a source familiar with the situation said. FCA and PSA have said they would seek to finalize a deal by year-end to create a group with 8.7 million in annual vehicle sales. That would put it fourth globally behind Volkswagen, Toyota and the Renault-Nissan alliance. PSA's Carlos Tavares will be chief executive and FCA's John Elkann — the scion of Italy's Agnelli family, which controls FCA through their holding company Exor — chairman of the combined company. The group will include the Fiat, Jeep, Dodge, Ram, Chrysler, Alfa Romeo, Maserati, Peugeot, DS, Opel and Vauxhall brands, allowing it to serve mass and premium passenger car markets as well as those for trucks and light commercial vehicles. Related Video:       Chrysler Dodge Fiat Jeep RAM Citroen Peugeot