FCA announces big growth in income, profits and sales for the last financial year.

Fiat Chrysler Automobiles met its full-year guidance as strong results from North America and improving operations in Europe managed to offset persistent weakness in Latin America, the company said in a press release.

The world's seventh-largest carmaker, which moved its primary listing to New York in October and is due to spin off luxury unit Ferrari later this year, reported operating profit adjusted for unusual items of 3.65 billion euros ($4.1 billion).

This compares with a guidance range of between 3.6 billion-4 billion euros and an analyst forecast of 3.4 billion euros, according to Thomson Reuters SmartEstimate.

Net income was 632 million euros ($617.4 million).

Revenue rose 11 percent to 96.1 billion euros ($109 billion), while net debt at the end of last year rose to 7.7 billion euros, up from 7 billion at end-2013.

For this year, FCA forecast operating profit, excluding unusual items, of between 4.1 billion-4.5 billion euros, while revenues are seen rising to around 108 billion euros. Worldwide shipments are seen rising to around 4.8 million-5 million vehicles, up from 4.6 million last year.

This year, FCA is expected to increase spending as it pushes ahead with a 48 billion euro expansion plan meant to boost the carmaker's global sales by 60 percent to 7 million cars between 2014 and 2018 and increase net profit fivefold.

The carmaker has begun turning the corner in Europe and may even break even in the region at an operating level this year as a focus on premium vehicles for export starts to pay off. In 2014, FCA trimmed its operating losses in Europe to 109 million euros from 506 million the previous year.

Along with other mass market producers, FCA was hit by a six-year slump in European car sales, from which the region is only slowly recovering. It has forced FCA to increasingly rely on its U.S. operations for profit. The North American business contributed just over half of FCA's operating profit and 55 percent of revenues last year.

FCA US sales rose 16 percent to 2,090,639 vehicles last year. The overall U.S. market rose 6 percent during the same period.

FCA shares have risen more than 60 percent last year, lifted by Fiat's buyout of Chrysler, the merged firm's move to Wall Street and its announcement of the Ferrari spin-off. The stock hit a high of over 12 euros this week on expectation that the strong dollar would become a major boost for the company in coming months.

FCA memo to employees

The following is a letter from Fiat Chrysler CEO Sergio Marchionne to employees, obtained by Automotive News:

Dear Colleagues,

Capping off an historic year, during which we made the transition to a single, global organization, FCA today released its preliminary 2014 financial results that report strong performance in line with our expectations. These results are testimony to your continued commitment to our values, the ability to maintain focus on our key objectives and our determination to build a truly special group.

We shipped 4.6 million vehicles in 2014, an increase of 6 percent over the previous year, with NAFTA, APAC and EMEA all contributing to the growth and the Jeep brand setting an all-time annual record with global sales of more than one million units.

The increase in shipments, together with a better product mix, drove revenues 11 percent higher to €96.1 billion, with increases in all regions but LATAM, where weak market conditions continued.

EBIT (Earnings Before Interest and Taxes) increased 7 percent to €3.2 billion. Excluding unusual items, EBIT totaled €3.7 billion, with strong improvements for APAC, Maserati and EMEA, which returned to profitability in the fourth quarter, an indication that we are turning the corner in the region as our focus on producing premium vehicles for export begins to pay off.

FCA posted a net profit of €632 million for the year. Excluding unusual items, net profit was €955 million, which represented a slight improvement over the prior year.

We will remember 2014 as a momentous year that included the formation of FCA (now the world’s seventh-largest automaker), the debut of our shares on the NYSE, our return to the U.S. equity markets, record sales for both Jeep and Maserati and the return of Alfa Romeo to North America after a 20-year absence. We also presented an ambitious five-year plan to grow our business and continue building an extraordinary enterprise that has the potential to enrich us at both the industrial and the human levels.

We have already begun 2015 with the same momentum. Based on positive results for the new Jeep Renegade and Fiat 500X, earlier this month we announced plans to add 1,500 new jobs at the Melfi plant, where we have already invested more than €1 billion in production of the new models. At the North American International Auto Show in Detroit, we unveiled the all-new 2015 Alfa Romeo 4C Spider, another step on our way to reinvigorating Alfa Romeo and making it a true global brand. We also introduced the new 2015 Ram 1500 Rebel and announced the new Ram 1500 EcoDiesel HFE, which remains the most fuel-efficient full-size pickup in North America.

This is just the beginning of a new year filled with opportunities for continued growth together with the challenges of an incredibly competitive landscape.

Let’s continue to dream big and take accountability for achieving our targets so that this time next year we, as a team, can look back with pride at the progress we have made as we continue this remarkable journey.

Old defunct brands from GM will not be making a comeback anytime soon !

General Motors CEO Mary Barra, at the recent Automotive News World Congress, said the company doesn’t miss any of the brands that were discontinued during the company’s 2008-09 bankruptcy and restructuring -- Saturn, Saab, Hummer and Pontiac.

You can take that to mean that none will ever be revived by GM, at least while Barra is in power.

But that doesn’t mean displaced customers of two of the brands -- Hummer and Pontiac -- have nowhere to go.

Fiat Chrysler Automobiles is building a lineup that would be a natural home for displaced Hummer and Pontiac customers.

Looking at Jeep’s staggering global growth and the worldwide explosion in popularity of SUVs and crossovers, you have to think a Hummer customer’s first choice would be a Jeep. (Don’t forget the two brands shared the same basic seven-slot grille.) GM no longer has a dedicated brand of rugged off-road vehicles.

But I see the biggest migration of GM customers to coming from Pontiac -- and going to Dodge.

“Dodge is the American performance brand,” Tim Kuniskis boasted during a presentation of Fiat Chrysler’s new five-year plan in May.

Kuniskis, CEO of Dodge, is trimming and recasting the brand’s lineup to focus on performance -- putting its tires squarely on the turf that transformed Pontiac into a performance powerhouse in the 1960s.

Pontiac’s performance image, spawned by such cars as the GTO, Firebird, Super Duty Trans Am and others, lasted well into the 1980s. It was in the midst of being reborn when GM killed the brand in 2009.

Dodge’s Grand Caravan minivan is about to join the midsize Avenger sedan in automotive history books. And by 2018, Kuniskis says, Dodge will have seven performance-oriented nameplates. That plan is already in motion with the outrageous new 707-hp Challenger and Charger SRT Hellcat muscle cars, and the V-10 Viper sports car.

I asked Kuniskis if Dodge will actively pursue Pontiac fans with direct mail appeals, discounts and other tactics, since GM no longer has a brand dedicated to performance vehicles.

“The Dodge brand is open to any buyer who is looking for performance,” he said. “Every Dodge vehicle is designed to deliver that visceral feel that reminds buyers why they fell in love with driving in the first place, and we’re open to any buyer who is looking for that feeling, regardless of the brand they’ve previously driven.”

I don’t want to give you the impression that GM no longer cares about performance cars and Pontiac customers. Cadillac is largely about luxury and tire-shredding performance. At the North American International Auto Show, Cadillac showcased the new CTS-V, a 640-hp road rocket.

And Chevrolet has some interesting cars, such as the SS, which is a new version of the discontinued Pontiac G8 sports sedan, and the Corvette and Camaro. But GM has no mainstream brand purely devoted to performance or even with a strong performance image.

Even if Dodge does capture a good share of Pontiac buyers, success is not guaranteed, says AutoPacific analyst Dave Sullivan.

For one thing, GM won’t give up Pontiac customers easily.

GM spokeswoman Ryndee Carney says GM consistently communicates with Pontiac customers, alerting them of new GM models and offering loyalty incentives to stay with GM. The company won’t disclose or quantify how successful it has been at retaining Pontiac customers, Carney said.

U.S. buyers have many performance vehicles from which to choose.

“When you look at other performance models -- the Ford Focus ST, the Raptor, BMW’s M series, Audi’s S and RS models -- none of those automakers dedicate a whole brand to performance,” Sullivan says. “There is a limited market for go-fast stuff. Look how many Accords, Camrys and Altimas sold last year.”

Sergio Marchionne, CEO of Fiat Chrysler, is not known to have a lot of patience. But he may need it with Dodge.

Says Sullivan: “It’s going to take a few product cycles, maybe 10 or 15 years, to fix memories of the Caliber and Journey.”

Richard Truett

REPORT HERE