Fiat Chrysler CEO focuses on goals amid tech doubts
Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne said he’s focusing on the Italian-American carmaker’s five-year strategy as the auto industry grapples with its biggest-ever challenges, stemming from new electric and self-driving technologies.
Battery-powered autos have yet to become profitable, with the company losing as much as $20,000 a car on its Fiat 500 subcompact’s electric version, Marchionne said Monday in a speech at a university event in Rovereto, Italy. The carmaker, which the CEO has wanted to combine with a competitor to share development costs, hasn’t been in talks with Hyundai Motor Co., he said in a Bloomberg Television interview, referring to South Korean media reports of a potential tie-up.
Global automakers are being squeezed as tightening emissions regulations effectively force them to accelerate introductions of electric vehicles, even as delivery figures are still tiny and battery-charging infrastructure remains patchy. While segment pioneer Tesla Inc. has successfully expanded sales volume, the California start-up’s cash burn underscores the difficulty of making battery-powered vehicles economically feasible.
“Because of the time-frame chosen in Europe, we have to electrify,” Marchionne said in the interview. “But if you tell me that this is the answer, I say no. As carmakers choose from a range of zero-emission powering systems, “we need to be absolutely open about the technology solution which would prevail.” Established carmakers also have to speed up decision-making to match new competitors such as Tesla, led by co-founder Elon Musk.
“The biggest fear that I see is that we will be left behind,” Marchionne said. “We are a very slow industry; for us to make a decision takes forever.” In contrast, “take Tesla: Elon moves at the speed of a rocket.”
Fiat Chrysler shares fell 0.1 percent to 15.15 euros as of 3:41 p.m. in Milan trading, reversing a gain earlier in the day, after Marchionne said there are no discussions with Hyundai and reiterated that he hasn’t been approached by Chinese manufacturer Great Wall Motor Co. on a potential deal.
“I have no big deal on the table,” the CEO said. Instead he’s placing priority on reaching debt-elimination targets for 2018, developing Fiat Chrysler’s business plan through 2022 and finding his successor. Marchionne, 65, is set to retire in 2019.
The business plan, set to be published next year, will include the spinoff of the Magneti Marelli car-parts operation, Marchionne said.
“The best solution would be to distribute Marelli to Fiat shareholders,” he said.