At the time where Renault and major US manufacturers launch for new global alliances, Fiat intends to remain faithful to its strategy of "targeted agreements."
In addition to the sale of 51 of its financial branch to Credit Agricole, the Turin yesterday announced a series of agreements to deepen its relations with its foreign partners Severstal and SAIC. Two years after his arrival at the head of the group, the Managing Director of Fiat, Sergio Marchionne, is says more and more as the key to the recovery of the automotive branch, on debt reduction. Some observers believe however that Fiat Auto must significantly increase its market share in Europe (7.6 today) before fully confirm its recovery.
For the first time in five years, Fiat Auto sold over a million of vehicles ( 17.5 by volume) in the first half. With the volumes of the new models (Grande Punto, Panda, Lancia Ypsilon...), the automotive branch, senior officer of the great financial crisis of 2002, displays current positive (EUR 88 million) for the third consecutive quarter. In the first half, the current result is EUR 145 million (against a loss of 217 million euros a year earlier), for a bi-annual turnover of EUR 11.8 billion, an increase of 22.2.
Maintenance of targeted alliances
30.7 Of the market in the first half, of Fiat Auto has passed the 30 in Italy and claims 7.9 of market share in Western Europe (6.6 a year earlier). Based on these performances, the Turin Group has revised upward its objectives for the whole of the year, with a common outcome of 250 million euros for Fiat Auto (EUR 200 million initially) and a net result, excluding exceptional of 800 million (versus 700 million) for the entire group.
In terms of industrial alliances, a year after her divorce settlement with General Motors (GM), doped in 2005 results in him to accept compensation of EUR 1.55 billion unexpectedly break, Fiat remains faithful to its strategy of targeted agreements inspired by the "model" PSA Peugeot Citroën. Contrary to some expectations, the Turin constructor has not yet announced significant strengthening of its cooperation with the Indian Tata Motors. But the hypothesis of a consolidation of the remaining links valid, because all foreign partners of the Turin constructor (Suzuki, Ford, PSA Peugeot, Severstal, SAIC...), Tata is the only one to have obtained a seat on the Board of Fiat. However, Fiat yesterday announced two new agreements with Chinese SAIC in industrial vehicles (Iveco) and Diesel engines, and another with Severstal to build its Ducato in Russia utility. In January 2006, Fiat and Severstal had already concluded an agreement for the local Assembly of Fiat Palio and Albea.
Despite the net recovery of its results in the first half, some analysts remain cautious about the prospects for rebound of Fiat in the medium term. According to a recent study by Merrill Lynch, Fiat Auto could still suffer from a "marginal profitability" of its operations in Europe and a poor retention of dealers. The unionist Luigi Angeletti, Secretary General of the UIL, he believes that Fiat is "on track", but will be drawn from case that once reached 10 of market share in Europe, which is 300,000 cars more sold than there is now.
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