FCA - Product Plan (Notizie - Riassunto a pag. 1)

[pennellotref]

Conference call

 

http://seekingalpha.com/article/4014733-fiat-chrysler-automobiles-nv-fcau-q3-2016-results-earnings-call-transcript?part=single

 

Tratti salienti:

 

Cita

Fiat Chrysler Automobiles NV (FCAU) Q3 2016 Results - Earnings Call Transcript

........

Patrick Hummel - UBS AG (Broker)

Yes. Good afternoon, gentlemen. Two questions, please. The first one, can you give us an update on where we are and in terms of potential disposal of your supplier businesses? There was obviously some news from Samsung that negotiations are being delayed due to their Galaxy Note 7 issue. And then there was some additional news on Comau, some interest from Shanghai Electric. I was just wondering if you can comment on where we are with those two assets, or in general, whether we should expect a closure of a deal in the fourth quarter for any of those businesses.

Sergio Marchionne - Fiat Chrysler Automobiles NV

 

.......

In terms of your opening remarks about asset disposal, just to be clear, I have never, to the best of my knowledge, ever indicated that either one of the assets that you made reference to are for sale. I've never made reference to a particular deal with Samsung, nor would I be courageous enough to suggest that Samsung is having issues with batteries as it connects to the 7 series. I think those are internal issues of Samsung and I'm sure they'll resolve them.

From our standpoint, I can only tell you that as it is true for most businesses, there are a continuous number of approaches that are made into the house from a variety of sources that are potential interest in other sales or combinations of some of our assets. Those discussions do continue from time to time. Based on what I know today, there is nearly 100% certainty that no deal will happen in Q4 of this year.

..........

Martino De Ambroggi - Equita SIM SpA

Okay. Then on Alfa, I didn't see any update on Alfa Romeo.

Sergio Marchionne - Fiat Chrysler Automobiles NV

It's going well. The fact that we have not – that we haven't isolated it doesn't – there's nothing nefarious about this. We're in the process now of rolling out the Giulia on a global basis. It's not happened in the U.S. yet. It will come to the U.S. in Q4 of this year. As you know, or you may know the car has received a number of awards it's been recognized as one of the best technical launches that have – that this group has ever carried out in its history. So I think you need – it will get traction of the market and starts getting distribution, it will be in China hopefully in Q1 of next year, Q1 or Q2. And so it's an ongoing story. We have a big launch coming up in Q4 of this year with the first UV off the same architecture being launched. Hopefully, we'll see it in Los Angeles. And then it will be available for rollout in Q1 of next year. So the plans are going as expected. I am incredibly pleased. I am telling you honestly, apart from the fact that I think the cars that we have launched are bar none probably the best vehicles we've built in a long time.

 

But I'm encouraged by the versatility of the architecture that was planned at the time in which the Giulia was launched. I think it's proved out to be all and more than we expected and I think its utilization across a wide range of applications within the group is probably the most beneficial thing we've done from a technical development here in a long time and I think its ramifications are yet to be seen. But I think we now have the basis on which we can build a phenomenal rear-wheel, all-wheel-drive environment which may spill over in some forms even as far as Jeeps. So I am delighted. But other than that, I have really nothing to add. Let's watch and let's see what happens at the end of the year.

........

Alberto Villa - Intermonte Sim SpA

Okay, thanks. Second question is on the passenger car agreement, you are planning to have in the U.S. market, is there any update on that and did you change any plan considering maybe a different view on the market development going forward for passenger cars in North America or is still on the (43:09) agenda?

Sergio Marchionne - Fiat Chrysler Automobiles NV

No, look, it's still on the agenda. I have nothing to announce because we haven't finalized anything. But I remain – I mean, the only reason why we have looked at the passenger car market with some degree of skepticism is because of the pricing power associated with our position and I think we find a cost-effective solution to our objectives, then I think we will execute it. And I think our distribution network is quite capable of turning that into a successful venture.

But this is a market which is now – and I'd have to go back and look at quarterly performance, but I think it's been coming down now in terms of relevance in the U.S. market for a number of sequential quarters and I think we need to recognize that this is not a fashion shift from passenger cars into utility vehicles and pickup trucks. I think there is a structural change and I think we've adapted our industrial footprint to reflect what we consider to be a permanent change and I think we need to rely on the economies of scale and capital deployed and invested by others to give us the desired objective. But it's a matter of time we will find somebody.

Alberto Villa - Intermonte Sim SpA

Okay. But put another way, if you don't reach an agreement, is that changing your targets in any fashion or not materially?

Sergio Marchionne - Fiat Chrysler Automobiles NV

To be perfectly honest in the scheme of things given our objective of making €9 billion by 2018, I think, it would be a rounding error if we found that. That's not really the big issue. I think the important thing for us was to preserve the uniqueness of the rear-wheel-drive offering that we have across fundamentally four brands which are Alfa, Maserati, Dodge and potentially Jeep. And I think that that solution has been nailed down internally by focusing on the (45:13) architecture which underpins the development of Alfa. And as long as that's been secured and I think it continues to deliver as we expected and I think our search for a front-wheel-drive passenger car solution to deal with very much of American problem has got limited impact on our ambitions.

............

Stephen M. Reitman - Société Générale SA (Broker)

.........

And secondly, question on Alfa Romeo. Just again if you could talk a little bit about the ramp-up. From what I can see it still seems to be running at relatively low levels from its own plants and I can understand that you haven't done the U.S. launch yet.

But it seems to me that – it looks to me the production of the Levante is actually higher on a monthly basis at the moment. And of course the – but I guess the volume aspirations on the Giulia are significantly greater than they are for the Levante. So when can we expect to see Giulia production getting to sort of like a cruising rate consistent with your targets for Alfa Romeo's volumes? Thank you.

Sergio Marchionne - Fiat Chrysler Automobiles NV

Yeah. I mean the cruising rate for the sedan without station wagon is probably between 75,000 and 100,000 a year. I can tell you right now the Levante is an ambition, even a full capacity utilization is over 40% of that number.

Stephen M. Reitman - Société Générale SA (Broker)

Yeah.

Sergio Marchionne - Fiat Chrysler Automobiles NV

So – and I mean I wish you're right that I was producing Levante at a faster clip. But I made better money on the Levante than I do on Giulia. But I think Giulia is going through a different process. You understand that Maserati has an established distribution network and something that we've built up between 2010 and now is the reason why both the Quattroporte and the Ghibli have been historically successful.

I think that it's walking into sort of established hands in terms of distribution and I think the – Richard made reference to the fact that we got 18,000 orders in-house. We probably got as many for the Giulia, I just don't know enough today given the fact that most of the attention is focused on the U.S. and the introduction of the vehicle for the U.S. market which remains its key main markets for distribution. And so, I think the best thing we can do is give you a better update when we get together for Q4. 

.......

Philippe Jean Houchois - Jefferies International Ltd.

I know there is a slight point of contention between you two so that's why I am asking. Okay. The other question is more generally if you can give us a view on the industry in general, at what point do you think this industry is going to start to write down its investment in combustion engine as a result of the loss of value-add as we downsize engines and a growing electrification of powertrain.

Sergio Marchionne - Fiat Chrysler Automobiles NV

That is by the way a phenomenally difficult question to answer for two reasons. One, I think that the transition from the current state to a future state is not going to – and I am talking about the next decade and anything – famous last words, but the ability to call transition in the next decade. We are going to go through a phase where I think combustion will not lose its relevance in its entirety but where I think electrification will combined with combustion to provide solutions to the OEMs. And so I do not think that combustion engines will lose their appeal, they will lose their relevance, but they will not lose the usefulness in terms of the portfolio.

I think whoever thinks that electrification will actually replace the bulk of the automotive market, I think, is probably being overly optimistic. It will take time to transition and the transition will include combustion. And I think that given our runway, the write-down will happen naturally as a result of normal write-down processes. I mean, now these assets have got long lives on our books and I think they will just come off through natural depreciation.

Philippe Jean Houchois - Jefferies International Ltd.

At the same time if you look at it differently, in terms of value added or if you shrink the size of your engine and you end up buying more and more of the value-adds from suppliers to meet CO2 and other emission regulation, your value-add goes to zero and that normally if you do an asset impairment that should lead you to write down your asset base. Am I wrong in thinking that way?

Sergio Marchionne - Fiat Chrysler Automobiles NV

You're probably not. But I think you are doing two things, one, you are overestimating the speed of change and secondly, you are overestimating the size of the asset build that's happening here, and we are not talking about numbers that are that large.

The problem that you raised, by the way, is a more – is truly significant from a strategic standpoint because what's buried in your question, I hope, is the fact that the real essence of an OEM, it is the definition of what we do for a living is on the table because if you're right, and I think you are in the mid to long-term, then I think we need to be able to redefine our core skills to reflect a much higher level of disintermediation and production than we have had so far. Because the only thing that's really left in our hands and that we've managed in a very proprietary way is combustion.

 

And so the issue is a much deeper question and it only reinforces the debate of being – that I started, that's probably being going on even before I started on utilization of capital in an industry which is going through a phenomenal set of transformations. And I think we need to think about that long and hard as we work through the next phase of development for the business because the relevance of brands is on the table. It is undisputed in my mind for brands like Ram, Jeep, the premium brands. It is a much more difficult analysis to carry out on the long-term for what I would call more generic brands, which I think are prone to being commoditized and I think that that is a much bigger question that we need to deal with.

And I don't have an answer at the end of this quarter for you on that question. I'll just try to focus on making as much money as I could and warning to make sure that we execute on our plan. But your question is well taken and maybe we can have a discussion over a beer on that issue anytime you like.

.......

Charles A. Winston - Redburn (Europe) Ltd.

......

And the second question is just in the LATAM region. Industrial costs, big step-up again, again as we started seeing the currency move, if the BRL remains at these levels, are you going to be able to get back into profit in that region?

In other words, these – are the new models in Pernambuco going to be enough to offset what still looks to be at least at current exchange rates quite a vicious FX impact on the input cost side? Thank you.

Richard Keith Palmer - Fiat Chrysler Automobiles NV

.......

Your second question on Brazil, I think we're building a product portfolio for Jeep in Brazil localized there to be able to be competitive notwithstanding the impacts of exchange and clearly in normal market circumstances I think we would be making strong margins as we have in the past out of the installation that we put into Pernambuco. The real impact of the real obviously is as the volumes in Brazil go down, our ability to export into the rest of Latin America is tougher than obviously it would have been. So that is clearly a negative impact in the scheme of things on our profitability in Latin America given that we would have volume in Latin America outside of Brazil. But I think to answer your question, we can make money at these levels of exchange. Our focus is clearly to launch the third Jeep in Pernambuco and continue to run that installation to basically help us to return to breakeven and positive in the beginning of next year.

So that is a feasible target obviously for us to start to make the sort of margins we have historically made in Latin America we need to see some improvement in the Brazilian market conditions which we've seen fast turnarounds in Brazil in the past of double-digit CAGRs off lows. And so I think we're optimistic that we can see a recovery in the Brazilian market in the beginning of 2017.

 

Charles A. Winston - Redburn (Europe) Ltd.

Yeah. Thank you.

Sergio Marchionne - Fiat Chrysler Automobiles NV

Just to shed some light on this. I mean I've been listening to Richard explain this. You need to understand in the absence of a startup in Pernambuco, our South American operations would've been in a loss. But I think the more worrisome part of about being in a loss is that we would have deprived consistent with what most other people are doing, we would have deprived South America of any new product launches during the time of the crisis.

And I think the Pernambuco solution allowed us to do two things. One is to modernize the architecture, secondly to introduce Jeep in the market. And I think as we have seen in Argentina, which has recovered at an incredible rate from several years of crisis certainly based on my last interface with the authorities in Brazil which was no older than a month ago. My indications that I think we've hit rock bottom, months of presidential issues has been resolved that I think that there is – there appears to be consensus, at least the political level about moving the agenda forward, and I would not be surprised if we saw the beginnings of a – the slight recovery in Q4 this year, hopefully better performance in 2017.

Having said this, I think we are – we, as a group, are better off having done what we've done, because of the benefit on the rest of the region as a result of the startup of the plant.

......

Richard Hilgert - Morningstar, Inc. (Research)

Thanks for taking my questions this morning and good morning to everyone, and good afternoon. Just to follow on a little bit on the electrification question posed earlier. My question was more centered around given the company's current spending situation and capital investments that it's intending, and given the industry's seeming to now be accelerating more towards that electrification, I wonder if there's been any plans or thoughts put into changing over to an additional electrified powertrain approach. I understand that hybrid is one way to go, but it seems like with Daimler, making a commitment to battery capacity now just announced this week, Volkswagen's announcements earlier about its commitment into battery electrification, things are accelerating on the full electrification side?

Sergio Marchionne - Fiat Chrysler Automobiles NV

I'm not sure that it's fully accelerating on the full electrification, it certainly is accelerating on the electrification side, and I think that based on our assessment, we strongly have the resources and have worked on projects that will make these a reality certainly within the same timeframe that both of our German competitors have announced.

The great thing about – the great thing – the bad thing and a great thing about electrification is that most of it will rely on components being provided by suppliers to the industry and not by us. The single largest drawback to electrification to us as OEMs is that we're no longer in control of the components side; all batteries will be made by others.

And so it's really a question of capacity and access to that capacity, everything else including the technology associated with providing electrical powertrain is within our reach and certainly supplemental by the relevant Tier 1 supplier. So I am not concerned about that becoming a disadvantage to FCA, I think we are going to have a long debate about the rate of change associated with what's happening here. I think we need to be very careful about not being – not being overly optimistic about the rate of change. Having said this, I think we need to be prepared and the reality is that we have the first – the only minivan in the marketplace that is fully hybrid. So I have – I think we need to be careful about sort of believing the headline. The real substance of this market at least for this year and next year is going to be to remember something else and resources are being devoted to the development of alternative powertrains at a rate which is comparable to some of the other OEMs.

 

Richard Hilgert - Morningstar, Inc. (Research)

Okay. Very good. My second question has to deal with the quality of the product coming out it seems like the last three years there's been some personnel changes and recognizing the consumer reports what they call a quality issue might not necessarily be from an engineering perspective a quality issue. But just curious what's the managerial approach to now locking in a better way of improving what's coming out in the product portfolio. You talked a little bit about the launches of the Giulia and how well that's been. Is there some implementation of an approach that this will transfer from Giulia to other model launches going forward?

Sergio Marchionne - Fiat Chrysler Automobiles NV

Without getting involved into our intimate entrails of the way in which we run the business, I can only tell you there is a selection of the leader that we put in place that was carefully thought through. I think the – he has been well-trained and running both purchasing on a global scale and North America manufacturing over the last seven years. So he understands the problem from both implementation side in terms of manufacturing and the acquisition side in terms of supplier choices for the group. The more important thing to me I think we've – we have now externalized the benchmark evaluation process to other people. I think this was very much of an inside exercise. It was a – it was always done using internal parameters.

I think we've learned the hard way that external valuations are perhaps more relevant to the way in which we look at quality from an internal standpoint. That's been put in place. They governed the launch of the Alfa Giulia, but more importantly governed the launch of the minivan. And I think they were very instrumental. These third-party agencies were very instrumental in bringing about suggestions and changes to the way even in which the product was configured and initially to make sure that we met customer expectations. And I do expect that that benefit will work its way through the rankings.

I think we have had to learn the hard way that perhaps having engineers although not necessarily associated with either designer or manufacturing, assess the quality of the work of other engineers may not have been necessary the best way out. We've learned the hard way. We've moved away from this. I think we're in a much better place now than we've been in a long time.

[cliffemall]

Ho tradotto alla pene di segugio o Sergionne ha affermato di avere per le mani ad oggi ordini per 18000 Giulia (ovvero lo stesso numero di Levante, sempre ad oggi)?

[stev66]

diciam che è interessante il fatto che lui dia la velocità di crociera di Giulia tra le 75.000 e le 100.000 unità anno. Dice che gli ordini sono più o meno quelli di Levante ( 18.000 ) ma non lo sa di preciso* perchè ad oggi la sua attenzione è focalizzata sul mercato Americano.

 

18.000 ordini vuole dire 4/5 mesi per la consegna , vista la produzione di 4000 unità al mese.

 

 

 

 

* balla colossale, ovvio.

[nubironaSW]

Mi sembra di capire che per 'Giorgio' ci possa essere anche un futuro in Jeep.....

 

But I think we now have the basis on which we can build a phenomenal rear-wheel, all-wheel-drive environment which may spill over in some forms even as far as Jeeps. So I am delighted. But other than that, I have really nothing to add. Let's watch and let's see what happens at the end of the year.

 

E che non sia previsto nient'altro fino a fine anno. Da nessuna parte si parla di Giulia Station Wagon. ergo non capisco che minchia si inventano i giornalettari....

 

[pennellotref]

8 minuti fa, nubironaSW dice:

Mi sembra di capire che per 'Giorgio' ci possa essere anche un futuro in Jeep.....

 

But I think we now have the basis on which we can build a phenomenal rear-wheel, all-wheel-drive environment which may spill over in some forms even as far as Jeeps. So I am delighted. But other than that, I have really nothing to add. Let's watch and let's see what happens at the end of the year.

 

E che non sia previsto nient'altro fino a fine anno. Da nessuna parte si parla di Giulia Station Wagon. ergo non capisco che minchia si inventano i giornalettari....

 

In realtà della station wagon ne parla il famigerato Ciferri su Autonews. Citando i soliti insiders anonimi, il medesimo la dà per sicura entro la fine del 2017. IMHO.........Può essere la prima volta in vita sua che Ciferri ci azzecca parlando di Alfa ...... 

 

http://europe.autonews.com/article/20161026/ANE/161029902/alfa-will-add-a-giulia-wagon-to-boost-european-sales

 

Cita

TURIN -- Alfa Romeo will launch a station wagon version of its Giulia sedan in Europe to help boost sales of the key model, people briefed on the matter told Automotive News Europe.

Neither Alfa nor its parent Fiat Chrysler Automobiles have commented on whether the Giulia will get a wagon version but the sources said it will be launched late next year.

There is no word whether the wagon will be sold outside Europe including in the U.S. where wagons are less popular than in Europe.

The Giulia has been in sale in mainland Europe since May and in the UK since this month. It was the fourth best-selling midsize premium car in September (see table below).

"The Giulia sedan is doing reasonably well but without a wagon it is not competing in the largest portion of the midsize premium segment," said Felipe Munoz, an analyst at JATO Dynamics market researchers.

Wagons account for 42 percent of sales of premium midsize cars in Europe, compared with 33 percent for sedans, Munoz said.

Marchionne pleased

Fiat Chrysler CEO Sergio Marchionne said is pleased with the Giulia and he expects its U.S. launch to help boost sales. The sedan received a number of awards that recognized it as "one of the best technical launches that this group has ever carried out," he said on Wednesday on a call with analysts to discuss FCA's third-quarter results.

Marchionne expects annual global sales of between 75,000 and 100,000 for the Giulia sedan.

He said the Giulia sedan will go on sale in the U.S. by the end of the year and "hopefully" in China in the first or second quarter next year.

Marchionne said he is encouraged by the versatility of the Giorgio architecture that was created for the Giulia.

FCA can use the architecture to build a "phenomenal" range of rear- and all-wheel-drive cars, which may even expand in some form to the Jeep brand, he said.

The architecture proved to be "all we expected and more," Marchionne said. "I think its utilization across a wide range of applications within the group is probably the most beneficial thing we have done from a technical development in a long time," he said.

Marchionne confirmed that the Stelvio, Alfa's first SUV, will debut next month at the Los Angeles auto show and likely will go on sale globally in the first quarter of next year. The midsize model also uses the Giorgio platform and will be a rival to the Audi Q5 and BMW X3 competitor. It will be built in FCA's Cassino plant, Central Italy, which also manufactures the Giulia and the Europe-only Giulietta compact hatchback.

Alfa sold 5,105 Giulia sedans in mainland Europe in the first nine months, putting it in fifth place in its segment behind the Mercedes-Benz C class, BMW 3 series, Audi A4 and Jaguar XE, according to JATO data. All these models except the XE have wagon variants. Jaguar has no plans to offer an XE wagon.

In September, the Giulia did better, moving to fourth place with 1,718 sales. Sales will improve now that the car is available in the UK, Europe's second-largest market after Germany.

 

 

Mercedes C class leads

September midsize premium sedan sales in Continental Europe with % change
Mercedes C class 4,300 -16% 
BMW 3 series 3,033 +11% 
Audi A4 2,091 +55% 
Alfa Romeo Giulia 1,718 New 
Jaguar XE 845 -26% 
Volvo S60 503 -19% 
Lexus IS 340 +28% 
Infiniti Q50 209 +32% 

Nine-month midsize premium sedan sales in Continental Europe with % change
Mercedes C class 35,568 -16%
BMW 3 series 24,931 +8%
Audi A4 23,803 +76%
Jaguar XE 8,709 +117%
Alfa Romeo Giulia 5,105 New
Volvo S60 4,981 -8%
Lexus IS 2,755 -7%
Infiniti Q50 1,635 -1%

Source: JATO

 

Modificato 26 Ottobre 2016 da pennellotref

[nubironaSW]

Ciferri non va considerato nemmeno di rimbalzo....

 

[cliffemall]

49 minuti fa, stev66 dice:

diciam che è interessante il fatto che lui dia la velocità di crociera di Giulia tra le 75.000 e le 100.000 unità anno. Dice che gli ordini sono più o meno quelli di Levante ( 18.000 ) ma non lo sa di preciso* perchè ad oggi la sua attenzione è focalizzata sul mercato Americano.

 

18.000 ordini vuole dire 4/5 mesi per la consegna , vista la produzione di 4000 unità al mese.

 

 

 

 

* balla colossale, ovvio.

se ho capito bene quello che mi vuoi dire, Marchionne rimarcando quelle cifre ci sta dicendo che Giulia sta camminando verso l'obiettivo prefissato (75k-100k), ben sopra il Break Even point.

 

*ovvissimo

28 minuti fa, nubironaSW dice:

Mi sembra di capire che per 'Giorgio' ci possa essere anche un futuro in Jeep.....

 

But I think we now have the basis on which we can build a phenomenal rear-wheel, all-wheel-drive environment which may spill over in some forms even as far as Jeeps. So I am delighted. But other than that, I have really nothing to add. Let's watch and let's see what happens at the end of the year.

 

E che non sia previsto nient'altro fino a fine anno. Da nessuna parte si parla di Giulia Station Wagon. ergo non capisco che minchia si inventano i giornalettari....

 

beh oddio, parla apertamente di lancio di nuovo modello Alfa nel Q4 del 2016 (Stelvio) e di commercializzazione nel Q1 2017, che è quello che sappiamo un pò tutti.

[Jazzboy]

12 minutes ago, pennellotref said:

..Può essere la prima volta in vita sua che Ciferri ci azzecca parlando di Alfa ...... 

 

Ciferri (forse) non ci ha preso solo l'ultima volta, scrivendo che la Giulia sarebbe stato l'ennesimo flop di Alfa. A sua discolpa aveva l'esempio degli ultimi trent'anni di gestione torinese, neppure io avrei scommesso un ghello su un successo commerciale della Giulia, fra l'altro ancora tutto da dimostrare vista la giovane età.

[pennellotref]

Adesso, Jazzboy dice:

Ciferri (forse) non ci ha preso solo l'ultima volta, scrivendo che la Giulia sarebbe stato l'ennesimo flop di Alfa. A sua discolpa aveva l'esempio degli ultimi trent'anni di gestione torinese, neppure io avrei scommesso un ghello su un successo commerciale della Giulia, fra l'altro ancora tutto da dimostrare vista la giovane età.

L'ultima sparata di Ciferri di qualche mese fa era che la Giulia Q avrebbe debuttato in Eu alla fine del 2016 nella migliora delle ipotesi.....

[Jazzboy]

36 minutes ago, pennellotref said:

L'ultima sparata di Ciferri di qualche mese fa era che la Giulia Q avrebbe debuttato in Eu alla fine del 2016 nella migliora delle ipotesi.....

Beh...

Se tuttora leggiamo di linee di produzione  rallentate  "per migliorare la qualità" (il che va letto come le linee non sono a punto, quello che esce non è sempre come dovrebbe essere" ), se ad intervalli regolari leggiamo della messa a listino di accessori inizialmente previsti ma non disponibili al lancio (schienale abbattibile, cruise adattivo,...), se i report della stampa al lancio parlavano univocamente di un modello eccellente dal punto di vista stradale ma con qualche timido accenno all'elettronica di bordo con una messa a punto da completare, vuol dire che il debutto è stato quantomeno un pelino anticipato (avranno avuto i loro motivi...)  e che avrebbe fatto comodo  ancora qualche mese per presentare un prodotto definitivo, o quasi. Se Ciferri parlava di fine 2016, ovvero fra un paio di mesi scarsi, direi che non siamo poi distanti da quel valore.