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Fiat Chrysler's Q3 profit boosted by strong North American earnings

MILAN, Italy — Fiat Chrysler Automobiles (FCA) reported a 17 percent jump in third-quarter adjusted operating profit on Tuesday, helped by a strong performance in its key North American market and improving operations in Europe and Latin America. The world's seventh-largest carmaker still makes the lion's share of its profits in North America, so improving, or at least maintaining, its margins there is a key focus. The carmaker reported an 8 percent adjusted operating profit margin in the region, up from 7.6 percent a year ago, despite a drop in sales and shipments. "FCA's profitability in North America remained strong in the quarter despite a weakening market there," a Milan-based analyst said. FCA's profitability compares with an 8.3 percent North America margin reached in the quarter by bigger U.S. rival GM , showing CEO Sergio Marchionne making progress towards his goal of closing the margin gap with GM and the company's other U.S. rival, Ford, by 2018. The company's confirmation of its full-year outlook also pushed shares higher, a trader added. The stock was up 2.8 percent by 1129 GMT, outperforming a 1 percent rise in the European auto index. FCA has been retooling some U.S. factories to boost output of sport-utility vehicles (SUVs) and trucks while ending production of some unprofitable sedans to strengthen profitability as the U.S. car market comes off its peak. The company said a drop in North America shipments due to lower fleet sales and discontinued models was partially offset by higher deliveries of Ram trucks and two models from the Alfa Romeo stable: the Stelvio sport utility vehicle and Giulia sedan. Profitability also improved in Europe, helped by sales of the Stelvio and the new Jeep Compass, and Latin America, while margins at Maserati remained strong at 13.8 percent due to strong demand for its first SUV, the Levante. In a later conference call, investors are looking for hints on the new strategy to 2022 which the company promised to unveil early next year. Chief Executive Sergio Marchionne said earlier this year that FCA would streamline its portfolio and that components businesses, including Magneti Marelli, would be separated from the group, possibly via a spin-off. While FCA confirmed its targets this year, doubts remain about its exposure to a weakening U.S. market, recall costs and potential fines over emissions after it was targeted by European and U.S.

Just 45% of Fiat dealers are profitable, and they're angry about it

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On average, Fiat dealers have only been selling about 17 cars a month.
We've been wondering for some time how Fiat dealers in North America have been getting along with just one model range in their showrooms up until recently. Franchisees spent millions building, stocking and manning sleek new 'studio' showrooms, only to have but a single model to sell, the cherubic 500. And even with its many derivatives, the Cinquecento is still an inexpensive model with its attendant lower margins. Perhaps it should come as no surprise then, that just 45 percent of US Fiat dealers are said to be profitable.

Alfa Romeo Tonale is the last new gas-powered Alfa for U.S.

Speaking to journalists yesterday, Vincent Noirbent, vice president of marketing and product for Alfa Romeo North America, talked about Alfa's electrification plans for the U.S. He confirmed the brand's plans to go to only electric introductions for 2025 and beyond. And he also revealed that the plug-in hybrid Tonale is the last new gas-powered model for America. We take that to mean the last new mainline model, since Zagato teased a special Giulia coupe that might be available to America that's slated to come out in 2023. That's undoubtedly going to be a very limited-production vehicle and could be regarded as just another version of the existing Giulia. But that aside, the Tonale is the last new internal combustion Alfa for the U.S. And that also makes it the last major model introduction until the first of the EVs is introduced for 2025. Apparently there's a smaller internal-combustion Alfa coming for Europe between now and 2025. But Noirbent said that it wouldn't be a good fit for the U.S. Apparently it will be a smaller model than the Tonale, and we would be inclined to agree with Alfa's decision. Vehicles the size of Tonale are about as small as any of the major premium car companies go in this country. Following the introduction of the 2025 Alfa EV, the brand will have additional models released every year through 2030. So Alfa's electric lineup will grow impressively quickly. The brand will still have a few gas-powered models overlapping, though, as existing vehicles won't be discontinued immediately. So Tonale, and likely Giulia and Stelvio, will stick around for a few years during the transition. Related video: A Night With Giulia