TURIN, Italy (AP) — Fiat and Chrysler CEO Sergio
Marchionne said Monday that the automakers will have the capacity to
produce 6 million cars a year once they combine their forces.
Marchionne
aims to complete the legal merger of Fiat and Chrysler by the end of
2014 to create Fiat Chrysler Automobiles, the world’s seventh-largest
automaker, and will outline a new multi-year business plan in Detroit in
May.
"With the initiatives we will announce in May, 6 million is
accessible," Marchionne told the last Fiat shareholders’ meeting in the
Italian company’s historic headquarters in Turin.
The carmakers
delivered 4.4 million cars last year, and Marchionne said the combined
automakers aims to sell 4.5 million to 4.6 million this year, mostly on
the strength of the U.S. and Asian markets.
Marchionne had long
said that a carmaker needs to hit a production threshold of 6 million
vehicles a year to be profitable in the increasingly crowded and
competitive global market. But he has shied away in recent years from
forecasting that Fiat Chrysler might achieve that level as sales in
Europe bottomed out in the economic crisis.
Marchionne, who has
been running Chrysler since it emerged from bankruptcy nearly five years
ago, won a hard-fought deal to buy the last remaining stake in January,
clearing the way for the merger.
Fiat Chrysler Automobiles will
have its legal headquarters in the Netherlands and fiscal headquarters
in Britain. Shares will be traded in New York and Milan.
Marchionne
said it would be "disingenuous" if he did not recognize the emotional
aspects of merging two automakers with distinct histories.
"The
truth, however, is that our strength today derives from the union of
these two realities, from the fact that each will conserve its own
identity and will make available its own strongpoints," Marchionne said.
As
is customary at Fiat, individual shareholders in the company, many who
have attended meetings for decades, were allotted five minutes each to
address management. Shareholder Giovanni Antonini asked if Fiat Chrysler
would organize charters to Amsterdam to attend, saying "I would be
sorry not to participate anymore."
Marchionne’s response: No.
The
CEO told shareholders that he is in talks with Russia’s largest bank,
OAO Sberbank, on a joint venture to produce Jeeps in the first phase.
Fiat and Sberbank signed a letter of intent for the venture in 2012, but
no progress has been announced.
He confirmed 2014 targets of 93
billion euros ($128 billion) in revenues for the combined automaker,
with net profit at between 600 million euros and 800 million euros.
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