Fiat Chrysler surprised analysts on Wednesday by maintaining their profit expectations for 2019.
Things in the automotive market aren’t going too well. Lots of car brands are posting losses and revised profit forecasts amid a slowdown in demand for vehicles. Total vehicle sales in the United States were down almost 4% in June, and July isn’t looking any better. Most carmakers are trying to put on a brave face, but regulatory uncertainty, tariffs, and overall softening of demand are putting a damper on most brand’s outlooks.
But not Fiat Chrysler. Once again, the rock star Italian/American carmaker reported strong second-quarter earnings that will help sustain profits throughout the year, led by their particularly strong Ram pickup brand in North America. Although US shipments of new vehicles were down 12% for FCA, increased shipments of Ram pickups and a greater share of the North American pickup market made up for the loss.
CEO Mike Manley also had to deal with the elephant in the room, that being the failed merger between FCA and Renault. Last month, it seemed that Fiat Chrysler would merge with French carmaker Renault to become one of the biggest automotive companies in the world, but things fell through when France and global alliance partner Nissan didn’t provide their blessing to the union.
Rather than continue talks, FCA pulled out of negotiations. Manley told analysts during Wednesday’s call that a merger would have been nice but it was by no means necessary for FCA’s survival.
"We are open to opportunity," Manley added, leaving the door open to future mergers with other companies. "I have no doubt why there still would be interest in it,” he added.
Fiat Chrysler expects their adjusted earnings before interest and tax to remain at $7.5 billion. Good performance in Latin America, as well as positive profits in Europe, Africa, and the Middle East, helped maintain their forecast, although the brand still struggles in Asia Pacific.
Maserati is still FCA’s most struggling brand, with Manley saying sales were “disappointing,” but no mention of selling the marque was made. Jeep, meanwhile, maintained its momentum thanks to the arrival of the new Gladiator mid-size pickup.