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Killing the Dart and 200 might lower FCA's fuel economy burden

Killing the Dodge Dart and Chrysler 200 could allow FCA US to take advantage of an intriguing quirk in the next decade's fuel economy regulations. By increasing its ratio of trucks versus cars, the automaker might not need to worry so much about hitting the more stringent efficiency rules. At first thought, it might seem harder for an automaker with a ton of trucks to meet the government's mandated 54.5 mile per gallon corporate average fuel economy for 2025. However, every company doesn't need to hit that lofty figure, according to The Detroit Free Press. The exact target varies by the product mix between trucks and cars. "While passenger car and light truck categories have separate CAFE targets, it's still true that more trucks versus cars in a company lineup means a lower combined CAFE target," Brandon Schoettle, Project Manager Sustainable Worldwide Transportation at the University of Michigan Transportation Research Institute, told Autoblog. "While passenger car and light truck categories have separate CAFE targets, it's still true that more trucks versus cars in a company lineup means a lower combined CAFE target." FCA US' current product blend has 80 percent pickups and CUVs, which means the company stands to benefit from a lower fuel economy target. It might not seem entirely fair environmentally, but this is a great move from a business perspective. The new CAFE rules aren't set in stone, according to The Detroit Free Press, but potentially taking advantage of the regulation is just one more reason to cut the Dart and 200. Modern crossovers also aren't gas guzzlers like older SUVs, which could make it easier to hit the fuel economy target. "Utilities offer practicality and versatility that cars do not, and now, built on car architectures, they do not penalize consumers on fuel economy as they once did," AutoTrader Senior Analyst Michelle Krebs told Autoblog. Schoettle warns that FCA is still making a gamble by killing the small sedans. "Depending on the previous sales volumes and how much these vehicles might have exceeded their specific CAFE targets, it's possible that these cars helped earn CAFE credits for FCA that they could bank for future use," he said. "Future sales breakdowns [car vs.

Fiat Chrysler shares get a boost after revised Stellantis merger deal with PSA

MILAN — Shares in Fiat Chrysler (FCA) rose sharply in Milan on Tuesday after the car maker and French partner PSA revised the terms of their merger deal, with FCA's shareholders getting a smaller cash payout but a stake in another business. FCA and PSA, which last year agreed to merge to give birth to Stellantis, the world's fourth largest car manufacturer, said late on Monday they had amended the accord to conserve cash and better face the COVID-19 challenge to the auto sector. Milan-listed shares in Fiat Chrysler rose almost 8% by 1000 GMT, while PSA gained 1.5%. Under the revised terms, FCA will cut from 5.5 billion euros ($6.5 billion) to 2.9 billion euros the cash portion of a special dividend its shareholders are set to receive on conclusion of the merger. However, PSA will for its part delay the planned spinoff of its 46% stake in car parts maker Faurecia until after the deal is finalized. That means all Stellantis shareholders — and not just the current PSA investors - will get shares in a company which has a market value of 5.8 billion euros. Based on Stellantis' 50-50 ownership structure, FCA and PSA respective shareholders will each receive a 23% stake in Faurecia. Analysts welcomed the 2.6 billion euros in additional liquidity for Stellantis' balance sheet as well as the increase in projected synergies to more than 5 billion euros from 3.7 billion. There was also further reassurance as the two companies confirmed they expected the deal to close by the end of the first quarter of 2021. "All told, the two players emerge as winners," broker ODDO BHF said in a note. "Of the two, FCA might be a bit more of a winner in the short term given the structure of the deal and the numerous payouts to shareholders to come in the quarters ahead (potentially close to 5 billion euros versus the current capitalization of around 16 billion euros)." The special dividend for FCA shareholders had proved contentious after Italy offered state guarantees for a 6.3 billion euro loan to the company's Italian business. "These announcements should, at last, end the debate over the financial terms of the merger, which had become a big topic and was still penalizing the two groups' share performances," ODDO BHF said. PSA and FCA said they would consider paying out 500 million euros to shareholders in each firm before closing or else a 1 billion euro payout to Stellantis shareholders afterwards, depending on market conditions and company performance and outlook.

FCA posts $716m profit in 2014, has big plans for 2015

In practically every metric, Fiat Chrysler Automobiles announced growing worldwide earnings for 2014 in its latest financial release. The automaker sold 4.608 million vehicles globally for the year, a 6-percent jump, and total revenue grew 11 percent to 96.090 billion euros ($109 billion). Profits before taxes also increased by 161 million euros ($182 million) from last year to 1.176 billion euros ($1.3 billion). However, net profits did tumble by 1.319 billion euros ($1.5 billion) to a total of 632 million euros ($716 million). These figures put FCA slightly ahead of what some analysts expected. According to Automotive News, the company's adjusted earnings before taxes and interest of 3.651 billion euros ($4.1 billion) beat a forecast figure of 3.4 billion euros ($3.9 billion). Regionally, Europe is showing signs of a comeback. FCA lost 109 million euros ($123 million) there in 2014, but that was almost a triumph compared to the 506 million euro ($573 million) loss in 2013. According to Automotive News, North America played a major role in the company's success, accounting for 55 percent of its revenue. While these annual figures show growth, FCA is even more optimistic about its prospects in 2015. The company is forecasting shipments of between 4.8 and 5 million vehicles worldwide next year. It also estimates earnings before interest and taxes to reach 4.1 billion and 4.5 billion euros ($4.6 billion – $5.1 billion). You can read FCA's full results in PDF format, here. While this release focuses on worldwide figures, FCA US, previously known as Chrysler Group, announces its US results on February 3. News Source: Fiat Chrysler Automobiles, Automotive News - sub. req. Earnings/Financials Chrysler Fiat FCA fiat chrysler automobiles