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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.

Ram with a Hellcat V8 coming? Could be, but let's review the evidence

While Fiat-Chrysler has gradually been stuffing bigger V8s into everything it can, one brand that hasn't received any SRT or Hellcat love is Ram. This, despite showing a Raptor-fighting TRX concept with a detuned engine in the fall of 2016. But according to Allpar, there may be a Ram 1500 coming in the near future with the fabled supercharged V8, and at full power. Interesting theory, but let's take a closer look. The two bits of evidence the site points out are (a) an anonymous inside source saying a vehicle is in development, and (b) a displayed time in Ram press photos. If you look closely, some of the Ram interiors show the time 7:07 on the infotainment display. This corresponds with the Hellcat engine's 707 horsepower. Allpar further speculates that the vehicle will be Rebel-based due to a preponderance of the number in Rebel interiors. This wouldn't be the first time FCA has hinted at a future model's power via infotainment time, either, as it did so with the Challenger Demon. View 6 Photos There are some holes in this theory, though. We went back and looked at the press photos of the interiors, and the 7:07 time shows up on Bighorn Rams, too. And not every single Rebel interior has the time. There's at least one that shows the time 8:29, which appears on various other Ram interior shots. Also, while FCA did manage to make a full-time all-wheel-drive system for the Grand Cherokee Trackhawk to stand up to the Hellcat's ferocious power, we doubt that drivetrain would be used in a Ram, since it's a much different application. The final nail in this theory's coffin might be that the head of Ram Trucks communication told us that the times in the images are a "complete coincidence" and that "this theory is all speculation." All things considered, we think the odds of a Hellcat-powered Ram reaching production soon, particularly an off-road version like Allpar suggests, is pretty iffy. We wouldn't rule out some sort of Hellcat-powered Ram completely. At the very least, putting a Hellcat V8 into a two-wheel-drive Ram for a street truck would make loads of sense. It would be less expensive to develop compared to a Raptor competitor, it wouldn't have any existing competition, and it could capitalize on the history of the Viper-powered Ram SRT-10 from the mid-2000s. And as we've seen, FCA has no problem stuffing absurdly powerful V8s into everything it can, from Charger to Durango to Grand Cherokee. So, don't count on a Hellcat-powered Ram yet.

FCA goes all-in on Jeep and Ram brands on cheap gas bet

It's no surprise that as SUV and truck sales remain strong in the wake of unusually cheap gas, Jeep and Ram sales are taking off. What is a surprise is that FCA CEO Sergio Marchionne thinks that cheap gas will be a "permanent condition," and feels strongly enough about it to change up North American manufacturing plans. Jeep appears to be the biggest beneficiary of the product realignment. In addition to increasing the sales estimates for the brand worldwide upwards to 2 million units a year by 2018, the brand will get a flood of investment for new product and powertrains. Consider the Wrangler Pickup to be part of the salvo, as well as the Grand Wagoneer three-row announced in 2014 as part of the original five-year plan. The Wrangler four-door will get at least two new powertrains, a diesel and mild hybrid version, in its next generation. That mild hybrid powertrain may utilize a 48-volt electrical system like the one that's being developed by Delphi and Bosch – which the suppliers think will be worth a 10 to 15 percent fuel economy gain at a minimum. Down the road, in the 2020s, the Wrangler could adopt a full hybrid system. The diesel powertrain is planned for 2019 or 2020. The Ram 1500 is also pegged to receive a mild hybrid system, again potentially based on 48-volt architecture, sometime after 2020. Lastly, Jeep and Ram will take over some of the production capacity of existing plants. The Sterling Heights, MI, plant that builds the Chrysler 200 will now build the Ram 1500; the Belvidere, IL, facility that produces the Dodge Dart will take over Cherokee output; the big Jeep facility in Toledo, OH, will be used for increased Wrangler demand. In 2015, according to FCA's numbers, car and van demand went down by 10 percent, but SUV demand went up 8 percent and truck demand 2 percent. Considering that these are high-margin vehicles, FCA can't ignore the math. FCA also won't build any new factories to supplement production to meet demand, but instead are reshuffling production priorities. Think of it this way: FCA is gambling on cheap gas being a permanent part of our lives, at least into the 2020s. By doubling down on SUVs and trucks, the company stands to win big, unless a spike in gas prices changes the landscape. FCA isn't talking about a Plan B, so they're all in. It'll be interesting to see how this plays out.