Despite the global economic downturn, Italian automaker Fiat said on Friday that it expected to meet its target for 2009 with a trading profit of over one billion euros.
''We are convinced that from an economic and global standpoint we have bottomed out and will now begin to rise,'' CEO Sergio Marchionne said at Fiat's annual stockholders' meeting.
''The initial indications of a turnaround are visible in all leading world economies, while the first concrete signs of a recovery will materialise in the second half of the year, starting in the United States, then in Asia to arrive in Europe towards the end of 2009,'' he added.
Also on hand at the stockholders' meeting was Fiat Chairman Luca Cordero di Montezemolo who agreed that the situation on the market was beginning to improve, in part thanks to recent government incentives to boost car sales.
In Italy, he said ''all sectors of the automobile industry are feeling the first positive effects of the incentives. We are witnessing an upturn for the market and a renewal of the fleet of vehicles on the road''.
The government last month issued a decree offering incentives to scrap old vehicles for new, less polluting ones. The incentives expire at the end of the year.
''Our group is taking full advantage of this opportunity also thanks to the ample array of products which are friendly to the environment, like methane-run engines for which we are the world leader,'' Montezomolo told stockholders.
Looking at Fiat's performance during the economic downturn, Montezemolo observed that ''despite the sharp drop in demand on a world level, the results of our group in 2008 were significant and demonstrated how Fiat is a healthy and competitive company''.
''The deterioration of market conditions in the last quarter of the year did not keep us from posting our best trading profit ever, the highest in our 100-year history. All sectors demonstrated their great ability to react and adapt,'' the Fiat chairman said.
Marchionne explained that Fiat was in a better position than other automakers to weather the economic crisis because ''we had already embarked on a policy of innovation and did not wait for a crisis us to dictate change to us''.
''This has placed us in a position to take the first step towards putting order in a confused market and to play a leading role. Our objective is to do everything possible to protect our marques, our business and our way of doing business,'' the CEO added.
Fiat, Marchionne observed, ''has the ability and the determination today to meet the challenges which face us and to continue to build something which is new and long lasting''.
CONSOLIDATION WILL LEAVE NO MORE THAN SIX GLOBAL PRODUCERS.
Turning his attention to the automobile industry in general, Marchionne said that ''the first big problem which the auto industry must tackle is overproduction. It is evident that rationalization is necessity''.
''Fiat does not live in another world. The problems which other automakers are facing are the same that we must deal with,'' he added.
''The whole automobile industry needs to be restructured on a world level. More than likely over the next 24 months we will see a consolidation of the market which in the end will leave no more than six global producers'' Marchionne told the shareholders.
In this framework the CEO observed that Fiat's proposed partnership with American automaker Chrysler ''will bring great benefits to our company''.
''This alliance will not involve any financial investment by Fiat and not will entail accepting any of Chrysler's debts. It is based on the logic of reciprocal interests. It will give us a stake in Chrysler and access to new markets, while the American carmaker will have competitive platforms for fuel-efficient vehicles with cutting-edge motors, transmissions and components for which our company is a recognised leader.'' he added.
The partnership will also give Fiat access to Chrysler's assembly plants as well as its sales and service networks in North America, which are necessary for the Italian automaker's goal of bringing Alfa Romeo back to the US market and introducing its popular new Fiat 500 city car there, both of which need to be produced in the US to be profitable.
