As third quarter reports come in, there is good news for the 7th largest car maker. Fiat Chrysler’s operating profits are up! Community Chrysler and other Fiat and Chrysler dealerships were a bit concerned after a $421 million loss last year due to recalls and other issues. There were port explosions in China that caused a major loss of vehicles which, in turn, affected the year’s profits. However, Fiat Chrysler has rebounded remarkably, and 2016 has been a year of major growth.
Beating Analysts’ Expectations
Analyst expectations had predicted that Fiat Chrysler would earn .39 cents per share this year; however, the third quarter report shows earnings of .47 cents per share. Analysts were overshooting on sales numbers with expectations of 27.5 billion Euros while the company ended up with 26.8 billion Euros.
U.S. Market Offers Potential
The U.S. market is an important one for Fiat Chrysler, and their offerings here have been diverse and expansive. Jeep, RAM, and Dodge all fall under the FCA umbrella, and their numbers have been skyrocketing. The Fiat Chrysler partnership has been dipping a toe into several different areas. Besides Jeep, RAM, and Dodge, there are also Ferrari and Maserati projects in the works. Let’s hope they aren’t overextending themselves due to this little boost in operating profits.
Gambling Against the Odds
Being a car maker is a huge gamble. There are many instances where one small thing could derail the profits for an entire year or more. Fiat Chrysler had been steadily gaining ground against more popular carmakers like Ford and Chevy until the devastation last year. Now they find themselves back at the bottom of the dog pile and having to climb back up.
Some companies advise that when you have something that works leave it alone. Others are all about diversity, mergers, projects, and expansion. Whether this choice pays off or not may not be clear for several years.
Toyota, for example, has dumped millions of dollars into green technology; for them, this has already shown to be a profitable investment. Yet, for Fiat Chrysler to play with luxury Maserati and Ferrari vehicles? The jury is still out as to whether that will be a wise investment. In the European market those may be successful ventures, but, here in the U.S., the Fiat Chrysler name is synonymous with average daily driver cars.
The Coming Year
With the 4th quarter ongoing, it remains to be seen whether Fiat Chrysler will continue this upswing, but, optimistically, there should be continued growth and profit as long as there are no major disasters. Analysts are adjusting their predictions for the 2017 year based on these surprising 3rd quarter reports.
Is Fiat Chrysler going to become a top contender? With the right strategy, it is entirely possible, at least in the U.S., thanks to their Jeep, RAM, and Dodge lines. The incredibly popular SUVs, trucks, and sporty cars like the Challenger are going to keep Fiat Chrysler in the game for quite a while.
Come down to Community Chrysler today and see why Chrysler dealerships are the best place to find your next new or used vehicle!