Suggestions of a possible sale of Fiat Chrysler Automobiles’ (FCA) prestige Alfa Romeo and Maserati brands have emerged in the wake of downward-trending share prices which has been erroded by the possibility of a recall of Dodge and Ram vehicles for a transmission rollaway problem.
Among FCA’s brands, the FCA Italy group, comprising Fiat, Lancia, Alfa Romeo, Abarth, and Fiat Professional, has struggled to match the sales buoyancy of the more successful FCA US Group, particularly Jeep and Ram and their range of SUVs and pickup trucks.
According to Forbes, news of the speculative sale of FCA’s luxury brands, coupled with an expected Trump-era sales boom in the US could lead to a turnaround in FCA’s stock price, despite no confirmation of any changes to Fiat Chrysler’s product portfolio.
Financial industry analysts are now reporting that FCA CEO Sergio Marchionne’s concerns about shareholder returns could lead to a shake-up of the company’s assets to turn the tide on mounting corporate debts, despite improvements in reported earnings.
At present Fiat Chrysler faces US$7 billion (AU$9.7 billion) of debts as of the third quarter of 2016, and is presently under investigation by the US National Highway Traffic Safety Administration following complaints of vehicle rollaways Dodge Durango SUVs and Ram 1500 pickups built between 2013 and 2017 affecting one million vehicles.
FCA is also feeling the pressure from a massive airbag wiring recall in the US (not related to the global Takata airbag recall) with as many as 1.9 million vehicles affected.
Rumours of the sale of Alfa Romeo come as the brand embarks on a product resurgence, with the BMW 3 Series-rivalling Giulia set to launch locally next month, and the brand’s first SUV, the Stelvio revealed at the recent LA motor show before hitting showrooms later in 2017.
Similarly Maserati has added an SUV to its lineup with the Levante, boosting earnings for the brand from €12 million (AU$17.4 million) in 2015 to €103 million (AU$149.7 million) at the end of this year. In spite of increased earnings the company faces mounting pension costs, triggering speculation that Alfa Romeo, Maserati, and component supplier Magneti Marelli could all separated from FCA and offered for sale.
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