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          Fiat Chrysler reverses global downturn in Q2, overhauls business in China

          Xinhua | Updated: 2019-08-01 14:24
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          A Fiat Chrysler Automobiles (FCA) sign is seen at the US headquarters in Auburn Hills, Michigan, May 25, 2018. [Photo/Agencies]

          CHICAGO - Fiat Chrysler Automobiles (FCA) reported on Wednesday strong second-quarter results thanks to better performance in North and Latin America, reversing the downturn in the first quarter of 2019.

          Meanwhile, the Italian-American automaker overhauled the leadership and structure of its joint venture in China, trying to rejuvenate the business in a more challenging market.

          FCA, which suffered an overall 47-percent year-on-year fall in Q1 net profit amid decreased global sales, earned 793 million euros ($881 million) in Q2, a 14-percent increase year-on-year.

          "We continue to deliver strong performance in North America and LatAm. Robust demand for our new products, along with steps we've taken to exert discipline across all of our businesses, have generated the momentum to achieve our full-year 2019 guidance," said FCA's CEO Mike Manley.

          The automaker made 1.565 billion euros ($1.739 billion) in North America and posted an 8.9-percent pre-tax margin, up from 8 percent a year ago.

          FCA contributed better Q2 performance in North America to the launch of the all-new Ram heavy-duty pickup, along with the continued success of the all-new and Classic Ram 1500, which resulted in a US large-pickup market share of 27.9 percent in Q2, up 7 percentage points from last year.

          In addition, the all-new Jeep Gladiator pickup exceeded FCA's expectation, earning a 7.7-percent share of the US segment in June.

          FCA said its solid financial results in Q2 were also driven by strong commercial performance in Latin America, especially Brazil, where it retained the market leader position.

          However, in the Asia-Pacific region, FCA's combined shipments were down 34 percent in Q2, mainly due to continued lower volumes in China, the world's largest auto market.

          Overall car sales in China declined in 2018, the first time in decades. Most joint ventures have experienced downturn in their businesses in China, including Detroit's Big Three -- General Motors, Ford, and FCA.

          According to the latest data from China Association of Automobile Manufacturers, car sales in China remained sluggish in the first half of 2019, though deliveries rebounded in June as automakers and dealers ratcheted up promotion before new emission standards went into force in some regions in July.

          In order to revitalize its business in China, FCA said that it took a number of measures to strengthen fundamental performance.

          "We overhauled the leadership and structure of our joint venture (in China). We also continue to strengthen business disciplines around our management of costs, inventories, commercial initiatives and product planning processes," the company's Q2 report revealed.

          In May, FCA and its partner in China, Guangzhou Automobile Group (GAC), merged GAC Fiat Chrysler Automobiles Company and GAC Fiat Chrysler Automobiles Sales Company into one.

          They hope that the streamlined management "will accelerate the integration of industrial and commercial operations, more rapidly respond to changes in the Chinese market environment and enable delivery of even more competitive products and services to its customers," said FCA earlier this year.

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