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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.

Analysts wary over FCA lawsuit but say emissions not as bad as VW

MILAN - Any potential fines Fiat Chrysler (FCA) may need to pay to settle a US civil lawsuit over diesel emissions will unlikely top $1 billion, analysts said, adding the case appeared less serious than at larger rival Volkswagen. The US government filed a civil lawsuit on Tuesday accusing FCA of illegally using software to bypass emission controls in 104,000 vehicles sold since 2014, which it said led to higher than allowable levels of nitrogen oxide (NOx) that are blamed for respiratory illnesses. FCA's shares dropped 16 percent in January when the U.S. Environmental Protection Agency (EPA) first raised the accusations, adding the carmaker could face a maximum fine of about $4.6 billion. The stock has been under pressure since. Volkswagen agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, U.S. states and dealers. FCA, which sits on net debt of 5.1 billion euros ($5.70 billion), lacks VW's cash pile but analysts said its case looked much less severe. While VW admitted to intentionally cheating, Fiat Chrysler denies any wrongdoing. Authorities will have to prove that FCA's software constitutes a so-called "defeat device" and that it was fitted in the vehicles purposefully to bypass emission controls. Even if found guilty, the number of FCA vehicles targeted by the lawsuit is less than a fifth of those in the VW case. Applying calculations used in the German settlement, analysts estimate potential civil and criminal charges for Fiat Chrysler of around $800 million at most. Barclays has already cut its target price on the stock to take such a figure into account. Analysts also noted that FCA's vehicles are equipped with selective catalytic reduction (SCR) systems for cutting NOx emissions, so it is likely that any problem could be fixed through a software update. "Should this be the case, we estimate a total cost per vehicle of not more than around $100, i.e. around $10 million in aggregate," Evercore ISI analyst George Galliers said in a note. The estimates exclude any additional investments FCA may be asked to make in zero emissions vehicles infrastructure and awareness as was the case with VW. FCA said last week it would update the software in the vehicles in question, hoping it would alleviate the regulators' concern, but analysts said it may have been too little too late. The carmaker is also facing accusations over its diesel emissions in Europe.

Ram wants 'your wickedest and most outrageous designs' for a truck — now

Car coloring book pages have been a handy distraction during quarantine, but Fiat Chrysler has a better idea: Make your own coloring book page and perhaps win accolades in the FCA Design Sketch Battle. The automaker runs an annual Drive for Design competition for U.S. high school students in grades 10-12, and has just opened a contest-within-a-contest that's open to anyone in the world. The brief is to sketch "your wickedest and most outrageous designs for a Ram truck." For all those times you've had an idea about a pickup and thought, "This is what [insert OEM] needs to make! If I could only get to the boss!," now is your chance to get to the boss. Post your sketch — or sketches — into the comments section of the contest on FCA's Facebook page, or upload the drawing(s) to Twitter and call out the automaker with @FiatChrysler_NA. Each drawing needs to have "FCADriveforDesign.com" written on it somewhere, and each social media post needs to be garnished with the hashtag #DriveforDesign.  The contest judges are Mark Gilles, Fiat Chrysler head of design, and Mark Trostle, head of design for Ram and Mopar. They've attempted to juice the creative brain with a punch to the prefrontal cortex called the RAMpage. Playing off the name of a car-based pickup from the go-go 1980s that lasted two years — about how long 2020 feels already — the RAMpage is a Ram 1500 hood and upper fascia, a Dodge Charger SRT Hellcat Widebody lower front and body, a pickup bed, and it's accented with obligatory yellow splitter guards that have matured into a properly racy splitter. You can take the RAMpage as a cue that your drawing doesn't need to threaten the living with massive bulk and post-apocalyptic looks. Ricky Ryan Goimarac, one of the entries so far, made his own version of the RAMpage that looks pretty sexy. And with the Chevrolet Colorado ZR2, ZR2 Bison, and Ford Ranger Raptor still not quite there for some people, why wouldn't a mid-size Dakota TRX be a good idea right now? Here's the crucial part: All entries need to be submitted today, April 9th, no later than 5 p.m. Eastern. So yeah, there's not much time, but ... quarantine. Tomorrow, April 10, Gilles and Trostle will post their favorites to Instagram. For all those design-focused high-schoolers, entries for the official Drive for Design contest are due by May 1, 2020. Related Video: