FCA - Product Plan (Notizie - Riassunto a pag. 1)

[justjames]

Ma Palmer di CNHI è ancora al suo posto? Strano che non si sia ancora "dimesso".

[pennellotref]

Ma Palmer di CNHI è ancora al suo posto? Strano che non si sia ancora "dimesso".

[reckoner00]

UPDATE 2-Fiat Chrysler hit by $670 mln charge for North America recalls | Reuters

* Fiat Chrysler Q3 adj. EBIT up 35 pct to 1.3 bln euros

* North America accounts for 91 pct of quarterly earnings

* Carmaker confirms FY guidance

* To increase SUV production for hot U.S. SUV market (Adds CEO comments on a new large SUV and Alfa Romeo strategy.)

MILAN/DETROIT, Oct 28 (Reuters) - Fiat Chrysler Automobiles (FCA) Chief Executive Sergio Marchionne said on Wednesday the company will make a new large SUV for the U.S. market, attacking one of the most profitable franchises for rivals General Motors Co and Ford Motor Co.

Marchionne used a conference call scheduled to coincide with third-quarter results to outline new details of his strategy to boost profits in North America, and signaled he is adjusting strategy for luxury brands Alfa Romeo and Maserati to compensate for slowing demand in China.

The automaker's shares skidded in Milan and New York after it reported a 299 million-euro loss for the third quarter, reflecting a 602 million-euro charge ($667 million) mainly to cover costs related to U.S. safety recalls. The company said operating profit rose 35 percent not including the charges.

Marchionne suggested Fiat Chrysler could use its Ram truck brand in the United States to field a bulked up competitor to GM's Chevrolet Tahoe and Suburban and Ford's Expedition. In April, Fiat Chrysler showed a prototype of a large Ramcharger SUV, borrowing the name from a pickup truck-based vehicle of the same name discontinued more than a decade ago.

GM currently commands about 70 percent of the large-SUV market in the United States, and last week reported record $3.3 billion pre-tax profits from North American operations for the third quarter. Marchionne has also said Fiat Chrysler should make a large luxury SUV to compete with Jaguar Land Rover's Range Rover.

"We have a reasonable chance to get at least a part of that market," Marchionne said, adding cheap gasoline should encourage enough demand for such vehicles to accommodate more entries.

Building more SUVs and fewer cars such as the compact Dodge Dart could help Fiat Chrysler to attain the same double-digit North American operating profit margins GM and Ford have in the region, Marchionne said.

Fiat Chrysler's North American operating margin was 6.7 percent, better than the 4.2 percent from a year ago but for the quarter much lower than GM's 11.8 percent and Ford's 11.3 percent. Marchionne has vowed to close the gap with Ford and GM profit margins by 2018.

Marchionne said the company is sticking with a plan to sell 400,000 Alfa Romeo vehicles worldwide by 2018, but said the brand will have to shift focus to North America and Europe because of lower expectations for sales in China. ($1 = 0.9029 euros) (Additional reporting by Danilo Masoni and Stefano Rebaudo; Editing by Greg Mahlich and Alan Crosby)

[pennellotref]

http://www.autonews.com/article/20151028/OEM04/151029805/fiat-chrysler-studies-making-suburban-expedition-fighter-under-ram

Fiat Chrysler studies making Suburban/Expedition fighter under Ram

Larry P. Vellequette

Automotive News

October 28, 2015 - 1:45 pm ET -- UPDATED: 10/28/15 2:33 pm ET - adds details, comments

Fiat Chrysler Automobiles is studying whether to build a large Ram SUV to compete with the Chevrolet Suburban and Ford Expedition.

CEO Sergio Marchionne, speaking during a conference call today to discuss the company’s third-quarter financial results, said a potential large SUV was possible because of the planned redesigns of Ram’s pickups.

The large SUV segment is “the near-exclusive use of some others. We have a reasonable chance of getting at least part of that market,” Marchionne said.

A large SUV would be a first for Ram since it was calved from Dodge in 2009. Ram was separated in part to distinguish its pickups and commercial vehicles from passenger-centric Dodge vehicles and to establish brand identity.

Marchionne said that as Ram redesigns its light- and heavy-duty pickups and is able to add production, it has room for such a vehicle.

“I think we have a unique opportunity with renewal of the pickup line, with the powertrains we selected, to significantly increase output,” he said. “We will also be exploring, as a result of that investment, some other segments.”

A Ram SUV wouldn’t compete with a planned three-row Jeep Grand Wagoneer, Marchionne said. The Grand Wagoneer -- whose development has been delayed until 2019 -- would be a luxury vehicle that competes with offerings from Range Rover, Marchionne said.

“I don’t think anybody who buys a large SUV is confusing it with a Range Rover,” he said.

Marchionne said he planned to provide an update to FCA’s product plan, unveiled in May 2014, early next year.

Marchionne said that he believes that fuel prices will remain low for the foreseeable future, and that small cars were becoming commodity vehicles while the real profits remained in trucks and SUVs.

Marchionne said the Ram SUV study was, in part, a result of comparing FCA’s North American single-digit profit margin with the double-digit margins of rivals Ford and General Motors. He said if FCA’s product mix were more similar to those of Ford and GM, FCA’s profit margin also would be in double digits.

GM’s stable of large SUVs are among its most profitable vehicles on a per-unit basis.

As a segment, sales of large SUVs are down 1.9 percent through the first nine months of 2015, but still represent almost 390,000 units in volume, according to the Automotive News Data Center.

Also discussed by Marchionne and CFO Richard Palmer during the call:

• UAW: Palmer said the four-year labor contract FCA signed with the UAW will add $421 million to its manufacturing costs in 2016, and an additional $33 million in costs for the fourth quarter. Marchionne said: “To the extent that we’re increasing labor costs, it does have implications on our profitability.” He called the contract “livable,” and said some of the added costs will be returned from achieving greater efficiency.

• Alfa Romeo: Marchionne said the continued weakness of imported luxury vehicles in China -- including FCA’s Maserati brand -- had forced a reassessment of FCA’s Alfa Romeo strategy. He said the automaker would still spend the same amount on developing Alfa Romeo and stood by a 2018 sales projection of 400,000 units globally. But he said that a large portion of the volume projection that had been assigned to China would have to be absorbed by other regions, including North America and Europe. He also said that all of the planned Alfa Romeo vehicles would still be developed, but they may come in a different order to satisfy consumer tastes in Europe and North America.

• Jeep: Marchionne said Jeep’s global development was going better than expected. He said that the 2014 projection for the brand of 1.9 million units by 2018 “is probably understated.”

• Electrification: Marchionne reiterated that FCA, a latecomer to hybridization, will start to catch up with other automakers as it launches its first plug-in hybrid next year with the 2017 Chrysler Town & Country minivan. “I think most of the fleet will go to hybrid,” by 2023, Marchionne said, because of ever-tightening fuel economy standards. He said the costs are significant, and “it’s an issue of being paid for all of this technology that’s going in.”

• VW’s diesel scandal: Marchionne said he still believes in diesel, despite the VW scandal. FCA has a broad array of diesel offerings, especially in Europe. “The origin of this problem was a governance failure; it is not a failure of technology. It was the potential malfeasance of an agent in the market,” Marchionne said. “I have not taken the view that diesel is dead. I don’t think it is.” He said VW will survive. “Failures like this could happen to anybody. I continue to believe VW will come out of this stronger, and ultimately will come back as a stronger competitor in the marketplace.”

• Consolidation: Marchionne said that industry consolidation, which he championed this year, has not gone away, and may have become clearer to others in the wake of VW’s troubles. “I haven’t given up on the notion [of consolidation], but I can’t start speculating on what our next moves might be. It has to be discussed with our board,” Marchionne said. “I have had some industry contacts with other people who share this view. My preferences have fundamentally not changed. At the end of the day, this is something that is inevitable. The economic justification is right.”

[pennellotref]

Maglione che si prende a "capocciate" (sempre in simpatia, ovvio........) con i suoi "amichetti" analisti:

Trascrizione della conference call:

Fiat Chrysler Automobiles NV (FCAU) Sergio Marchionne on Q3 2015 Results - Earnings Call Transcript | Seeking Alpha

Fiat Chrysler Automobiles NV (FCAU) Sergio Marchionne on Q3 2015 Results - Earnings Call Transcript

Oct. 28, 2015 7:59 PM ET About: Fiat Chrysler Automobiles NV (FCAU)

Question-and-Answer Session

Operator

Ladies and gentlemen, today's question-and-answer session will be conducted electronically. We will now take our first question from John Murphy of Bank of America Merrill Lynch. Please go ahead.

John J. Murphy - Bank of America Merrill LynchGood afternoon, guys. Just a first question; I mean, you highlighted the fact that you think that the major differential from your operating margins versus GM and Ford's is a function of mix. I'm just curious, how you think you'll get there as far as pushing the product and imagine that Durango will be a big part of it. But also, as we look at that mix getting larger and maybe less fuel efficient, how much investment do we need to make not just in the product development itself, but also in powertrain development to meet CAFE standards in North America?

Sergio Marchionne - Chief Executive Officer & Executive DirectorI'm going to give you a dumb answer for the question, because the detailed articulation of an answer is going to take an hour. One, there is nothing that we currently have – there is not a thing in terms of matching product portfolio that currently does not exist within the environment that we're managing. The amount of work that's gone on in the last, probably 24 months in preparation of the renewal certainly of the pickup truck and the SUV world would allow us to enter that market. And relatively inexpensive and relatively acceptable cost in the area which I think has been left to the near exclusive use of some others.

And I think it is important that we recognize that, given the strength of the brands and given what we've been able to do over the last five years that we have a reasonable chance of getting at least part of that market. And without causing sort of additional strain either on our capital expenditure profile, or on our commitments to powertrain. The powertrain solutions are already baked into our development. They equally impact, not only the vehicles that we're thinking of getting involved in but they impact vehicles that would have been developed to replace current ones.

So, I do not see any sort of seismic shift in terms of our capital profile. I do see an unexplored potential at our end to try and access those markets. And I think, we need to do it in all conscience. We're going to be spending the next 60 days taking a very hard look in view of the fact that we're going to have to launch some investments now in North America to replace some vehicles in the 2017 to 2019 timeframe.

And so adding on this product development to an existing program is not going to twist us into a pretzel. I think we'll able to do it and I'm not at all concerned about the powertrain impositions, because they actually given the size of the vehicles are quite beneficial given the technology that we have available. They're actually beneficial to the (37:58).

John J. Murphy - Bank of America Merrill LynchGot you. And then second question just on the UAW contract; obviously there is some puts and takes here, there is certainly some different interpretations. Just curious, as you look at this, does the contract that you agreed to at this point change anything as far as your view as profitability going forward or is it really just, from a continuation of what you have with some opportunity to work on things in the next couple of contracts?

Sergio Marchionne - Chief Executive Officer & Executive DirectorTwo broad comments, one, obviously to the extent that we're increasing labor costs, it has an implication and it does have implications on our profitability. And so there is obviously a very clear sharing of the objective with UAW to do a full and complete rollout of our WCM or World Class Manufacturing initiatives across the whole plant network and I would expect that we will get some of those increased costs back in terms of efficiency, just out of running our industrial footprint better.

I think that it would be foolish to assume that whatever we've passed on is going to end up – whatever we've absorbed as additional cost is going to end up as a margin erosion. I think that we will have to find ways to offset the increase in cost. I as you well know from public statements that I made, I shared with William the view that somehow we need to increase the distribution to our workers. And the question was the timeframe within which we were going to do this. I think we have now agreed a timeframe that's going to govern the sales (39:46) well into 2023, because of the progression with Tier Twos. And so, it's livable. I will not, on the basis of this agreement, change any of the product plans that we have put together nor would I change our view as to what gets allocated. It is undoubtedly clear that to the extent that you have got higher margin products that are potentially available for production in the U.S. that those are the ones which should be favored in terms of localizing because of the fact that they have the best chance of margin (40:24).

It's a complicated question, given the extent to which we've already invested in other places. But as a general comment, to the extent that this ends up being a structural change it only makes the sole issue about sort of capital returns even more of a difficult issue to try and solve, because we end up – at least, where I sit I end up looking at an equation where we appear to be inadequately compensating our workers, and we certainly have inadequate compensation on the capital provider side.

So, as managers of this distribution of wealth between capital and labor, which is the classic economic quandary, I mean, we've agreed now to a set of escalating cost, some people are bandying around the cost of €2 billion over the period between now and 2019. The number is actually less than that, but it's broadly in line with the cumulative cost increase that we're expecting over the period of time. That number needs to come out, either out of the market in terms of pricing or it needs to come out of the capital structure and the cost of running this thing.

John J. Murphy - Bank of America Merrill LynchAnd then just...

Sergio Marchionne - Chief Executive Officer & Executive DirectorAnd I don't have an immediate answer to this. Yes, go ahead.

John J. Murphy - Bank of America Merrill LynchOkay. Yes, then just a last one, so I don't take up too much time. As you look at the globalization of the Jeep brand, I mean obviously it appears to be going a little bit faster and maybe better than we had anticipated, and you cited potentially getting more than 1.9 million units, which is your target in 2018. I mean, what do you think the upside is and in what markets do you think you're really going to get that in?

Sergio Marchionne - Chief Executive Officer & Executive DirectorNo, look, I made the comment, because I think that the rate at which – look, we sold more Jeeps in Europe in the first nine months than we sold in the whole 12 months of 2014. As of today, we've sold more Jeeps worldwide than we've sold in the whole of 2014 on a global scale. So, this brand is not getting a phenomenal amount of traction, we need to make sure that we're supporting it as it expands. We'll give you an update at the end of January as to what we think a possible revised target is going forward, and we're not going to speculate on that number today.

John J. Murphy - Bank of America Merrill LynchOkay. Thank you very much.

Operator

We will now take our next question from Martino De Ambroggi of Equita. Please go ahead.

Martino De Ambroggi - Equita SIM SpAThank you. Good morning, good evening, everybody. First question is on NAFTA region. You gave a target of a round rate in Q4 of 7%, I understand maybe ForEx is helping a little bit, but do you confirm 7% or maybe you should revise it upwards for Q4?

And my question is, obviously you don't want to talk about next year, but should we take the 7% as a floor for next year, roughly?

Sergio Marchionne - Chief Executive Officer & Executive DirectorYes, I'm not – look, the 7% is doable. I don't know of a reason why we will go back in 2016.

Martino De Ambroggi - Equita SIM SpAOkay. I suppose it could have been revised upwards, that 7% at least in Q4, since you already achieved it...

Sergio Marchionne - Chief Executive Officer & Executive DirectorIf it is, it's going to happen in January next year. We're not going to upgrade anything today.

Martino De Ambroggi - Equita SIM SpAOkay. And the second question is on financial costs. If I remember correctly, you had a target of a €1 billion reduction for different reasons, nonrecurring cost and so on. This year will be higher than last year. So, could you update your view, following also the Ferrari deal? What are the targets in terms of financial costs and in which timeframe?

Richard Keith Palmer - Chief Financial OfficerYes, Martino, that number obviously was through the 2018 timeframe originally. I think we're going to make some significant reductions in our financial charges next year, given obviously that we are getting the proceeds from the Ferrari transaction. We are also going to actively look to remove the debt in the FCA US company and remove the ring fencing.

Sergio Marchionne - Chief Executive Officer & Executive DirectorSorry, Richard, we are going to remove the ring fence next year, not actively, it's done, it's just they have to wait.

Richard Keith Palmer - Chief Financial OfficerSo, that's going to give us the opportunity obviously to utilize our cash more freely on a global basis and reduce the amount of cost of carry that we have in our financial charges. So, clearly, we're going to give you some guidance for 2016 as was mentioned in January. But I would expect our financial charges to be a very positive contributor to the year-over-year improvement from 2015 to 2016 based on those actions we'll be taking.

Martino De Ambroggi - Equita SIM SpAOkay. If I may, just one more question on the Chinese port explosion; you quantified €142 million provision, but did you quantify also a rough indication of what was the impact on the profitability for the missed volumes for the APAC region, and I was wondering if also Maserati was affected?

Richard Keith Palmer - Chief Financial OfficerSo, in terms of the port, Maserati wasn't affected. And in terms of the volumes, about half of our volume miss for the quarter in terms of shipments was related to the port. So, I think we could quantify a number...

Sergio Marchionne - Chief Executive Officer & Executive DirectorRichard is looking for the answer.

Martino De Ambroggi - Equita SIM SpAYes, no problem.

Richard Keith Palmer - Chief Financial OfficerYes, about €80 million to €100 million of the impact of year-over-year change was due to that volume reduction due to shipments not being made out of the port.

Martino De Ambroggi - Equita SIM SpAOkay. Thank you.

Operator

We will now take our next question from Brian Johnson of Barclays Capital. Please go ahead.

Brian Arthur Johnson - Barclays Capital, Inc.Yes, good afternoon. I have a couple of questions. First, again to kind of go on the differences with the other big Detroit based part of the businesses. We did see in a couple of the others and Ford was fairly open about it, a significant commodity tailwind in their margin, you don't flag that in your comments. Of course, it's great to think that production cost, efficiencies and supplier relations drive it, but are you seeing a commodity cost impact? If not, why not, and when could it come through given at least on the U.S. dollar basis, where all the commodities have gone?

Richard Keith Palmer - Chief Financial OfficerYes, Brian, we're not seeing a significant impact yet, because of the lengths of the contracts we have in place. And we expect to start to see more of an impact going into Q1 of next year.

Brian Arthur Johnson - Barclays Capital, Inc.Okay. So it really relates to the timing of the supply contracts. Second question kind of ties into the longer-term effects of Volkswagen, whether you agree with the regulatory approach or not, it seems like they are making the internal combustion engine, whether diesel or gas increasingly more expensive.

I certainly understand your view that, on a footprint adjusted basis, you could be in good shape for 2017 to 2020, but if we kind of think about the hockey stick currently for 2020 to 2025 in Europe CO2, and U.S. CAFE. How do you think being a skeptic seems on electric, what you're going to need to do with hybrids, what you're going to need with EVs to have a competitive cost effective lineup in say 2023?

Sergio Marchionne - Chief Executive Officer & Executive DirectorI actually think, Brian, that most of the fleet will go to hybrid by that period of time.

Brian Arthur Johnson - Barclays Capital, Inc.And in terms of the – what two efforts you have underway in the capital investment to get your fleet there?

Sergio Marchionne - Chief Executive Officer & Executive DirectorThe issue about the capital is in our plans and it's already in the 2018 – it's in the 2018 target numbers, the real issue to me is not capital, it's a question of being paid for all those technology that's going in. And we -everybody has had these wonderful ideas about the fact that battery cost per kilowatt hours would drastically drop. We've seen indication with people expect these costs to be less than €250 a kilowatt hour, it's just, one, we haven't seen it yet. I think it may be overly optimistic in terms of why I think technology will ultimately deliver price.

I think a lot of this has to be seen. I mean it's just – the costs are significant. And I think we are experienced since now we're going to be launching our first plug-in hybrid in the first half of 2016, I think for the new minivan. I think we'll be able to experience the pain of that technology and the cost of that technology going into the vehicle by going into the market. It's an unresolved issue to me, but having said that, regulations will dictate its introduction, so we have zero options.

Brian Arthur Johnson - Barclays Capital, Inc.And that gets to the point you made in the spring around redundant CapEx. Final question, since your share of pickups as a percent of NAFTA sales is, as you mentioned, lower than of the competitors; so, you're implying that you would increase capacity or increase your share in pickup. So, are there other very profitable niches that you could be gaining presence in?

Sergio Marchionne - Chief Executive Officer & Executive DirectorI think it's both because I think we have a unique opportunity now with the renewal of the pickup line with a new architecture that's coming in with the powertrain that we selected, pretty significantly increase output, and I think that's something that we have studied. I can confirm to you that numbers will go up, the availability of pickups will increase. And then we will also be exploring as a result of that investment, ways to enter into other segments, I think it's important. There are a very few markets in the U.S. that can be characterized as oligopolies, and that's one of them. And I think that we need to go out there and just like to get a fair share of that market, nothing else.

Brian Arthur Johnson - Barclays Capital, Inc.And just to close that, can you do that without upsetting the delicate pricing balance?

Sergio Marchionne - Chief Executive Officer & Executive DirectorYes.

Brian Arthur Johnson - Barclays Capital, Inc.Okay. Thank you.

Sergio Marchionne - Chief Executive Officer & Executive DirectorWell, by the way you can see this from our market share gains in Ram over the last five years.

Brian Arthur Johnson - Barclays Capital, Inc.Thank you.

Operator

We will now take our next question from Thomas Besson of Kepler Cheuvreux. Please go ahead.

Thomas Besson - Kepler CheuvreuxThank you very much and I have a few simple questions, please. Could you first confirm that the Q3 2015 NAFTA adjusted EBIT margin is fully comparable with what you showed in Q3 2014, given the changes you've made on the calculation of future recall costs. I think it's not completely clear for the market.

Second question, can you please make a comment about the prospects for the APAC margins in, at least in Q4, if not in 2016? Have you found another way into China, than the Tianjin port, or should we think that the profit margin from APAC is going to stay negative in Q4, what's the timeline to get back into profit?

And last question, you suggest in NAFTA, some positive pricing action to compensate for the higher industry recall cost. We've just had this afternoon Ford coming out with Friends and Family Incentive Program for November and December. Do you think that with the industry margins for the Detroit 3 OEMs at the highest level it's ever been, that you can still raise prices here? Thank you.

Sergio Marchionne - Chief Executive Officer & Executive DirectorWell, and the one, the ability to raise prices in market is a market-determined exercise that the market will not bear, we will not pass it on. I can tell you from our experience over the last six years that whenever we have for cost reasons, tackle this issue we've been successful in obtaining them. And I think a lot of the gains 2014 to 2015 are also due to the fact that pricing has improved and then effectively we have in some fashion share that pain with the dealer network.

I think that this issue is inevitable, whether it happens now, or it happens later, whether somebody else joins the bandwagon or not, it is almost an irrelevant issue, it needs to happen, because I think these costs are structural. And they will impact on our margin performance going forward.

On the China issue, obviously, we're working pretty diligently to try and get to a breakeven or a positive number in Q4. I think time will tell. I do not have a view today. But I think certainly the loss that we booked in Q3 should be substantially reduced in Q4. I have expectations that it will be positive in next year notwithstanding the changes in market conditions. I think the biggest upside for us is going to be in terms of the earnings from the joint venture that we have with the production of the Cherokee and the Renegade in 2016 with the industrialization of the Cherokee starting as early as Q4 of this year.

On the first question, that you asked about whether our numbers are comparable Q3 2015 to Q3 of 2014, the impact of the adjustment is roughly €65 million in the quarter. So, I mean technically they are not comparable because there is an additional charge of €65 million in the quarter for that, for that revised view on recalls, but otherwise the numbers are absolutely calculated on the same basis.

Thomas Besson - Kepler CheuvreuxGreat. And I have one small question that I forgot, if I may. Could you please specify the exact timing of the – for 80% distribution, should we expect it to be at the very beginning of January next year, and is it going to occur in just one shot or in several instances?

Sergio Marchionne - Chief Executive Officer & Executive DirectorWe're not going to use multiple shots to do this. It will be a one-time event. But the actual date has to be voted on by the shareholders, on December, the 3rd. It's my expectation, that we'll do this on the first business day of 2016, which based on my calendar is January 4 of next year.

Thomas Besson - Kepler CheuvreuxGreat. Thank you. Very clear.

Operator

We will now take our next question from Mark Clothier of Bloomberg News. Please go ahead.

Mark Clothier - Bloomberg LPHey, guys, thanks for taking some questions. At the UAW press conference last month, you said that once the UAW wrapped and Ferrari was listed, that consolidation would be next on your list. So what's next as you work on that? And secondly, has VW's crisis changed your preferences in anyway?

Sergio Marchionne - Chief Executive Officer & Executive DirectorThe consolidation story was not a flavor of the season. I mean, it's something that's structural to this industry, and it didn't go away. I think the Volkswagen story and the cost associated with what I consider to be a very stiffening environment of regulations and of compliance only makes that thesis more valid today than it even was back in April 9. I haven't given up on the notion, I think, what I will not do, and I can't. If I thoroughly start speculating about what our next moves are, because this is something that needs to be discussed and understood, not just with me, but also with our board, and this issue has been debated and it's been canvassed at length, but then we have had some industry contacts as we would expect it to have with other people, who share those view, I think incredibly premature for us to express a definitive view, and my preferences have fundamentally not changed, but it doesn't mean anything.

I mean, at the end of the day, this is something which in the scheme of things is inevitable. And so whether it happens now, it happens next quarter or three quarters from now, the direction is right and I think that the economic justification for the move is right. And I also think that we need to get ourselves out of this problem of alleged wealth distribution between labor and capital, and I think we're doing both of them an incredible amount of the service and I think we need to resolve this issue. But I have nothing to admit.

Mark Clothier - Bloomberg LPWhen you say industry, discussions with industry contacts, who share this view, do you mean other automakers?

Sergio Marchionne - Chief Executive Officer & Executive DirectorThose are the only kind of guys that would have a relevant role to flag.

Mark Clothier - Bloomberg LPSo that's a positive development, right? I mean you had not gotten feedback like that before?

Sergio Marchionne - Chief Executive Officer & Executive DirectorI'm not sure that's true. I think that this noise in the background has been existent for quite a while. There are a number of people – we're not lunatics here, and there are a number of people who run the business who understand the implications, but you just have to look at their numbers. And so that reality is shared, not just by me, but by some others. And so, whether they are the ideal people with whom to strike something or not is a separate question.

I think that there is, at least in some parts of the industry, there is a shared belief that this fix needs to happen and there needs to be paradigm shift in a way in which we approach this business. And by the way, I think we shouldn't be speculating about who we're talking to, who we're not talking to, but I think we're going to waste and you're going to write lots of stuff on this and people will be called in, so you could talk to Sergio. In the end, it doesn't solve anything. My advice is to let the industry come to its senses and work its way through the issues. It will happen, give it time.

Mark Clothier - Bloomberg LPThanks.

Operator

We will now take our next question from Alberto Villa of Intermonte SIM. Please go ahead.

Alberto Villa - Intermonte SIM SpAYes. Good afternoon. First question is on the LatAm resilience in terms of operating profit. I was wondering if you can give us an idea of I mean what is your view, because we're seeing volumes going down strongly again in the fourth quarter as far as we have data and you have been able to turn positive. Just wanted to know...

Sergio Marchionne - Chief Executive Officer & Executive DirectorYou should be delighted. You should be absolutely delighted.

Alberto Villa - Intermonte SIM SpAI'm, but just to understand whether there were I mean like temporary layoff components or things that are not structural that...

Sergio Marchionne - Chief Executive Officer & Executive DirectorNo, no. I mean, just a moment; I think whatever we're doing, everybody else is doing.

Alberto Villa - Intermonte SIM SpABut, for example, you don't cut price as much as your competitors, so you took a view of losing some volumes to preserve profitability.

Sergio Marchionne - Chief Executive Officer & Executive DirectorBut I'm not sure that's quite relevant today. I mean, to be perfectly honest that you're now asking what we do in terms of tactics of maintaining profitability in Latin America and to be perfectly honest, I think that's a comparative issue vis-à-vis FCA. Look, I had been...

Alberto Villa - Intermonte SIM SpANo, just wondering if you...

Sergio Marchionne - Chief Executive Officer & Executive DirectorSorry. I've been repeating ad nauseam and I will repeat it again just to avoid confusion. We do have the lowest cost structure of any other car producer – compared to any other car producer in Latin America. It's that simple. Somebody else (61:17) I can break even, if they break even I make money.

Alberto Villa - Intermonte SIM SpAOkay. Thanks. And the second question is on Maserati performance in the U.S., which was not so delightful, in the third quarter. I was wondering if there are specific reasons behind the drop in volumes?

Sergio Marchionne - Chief Executive Officer & Executive DirectorNo, I think, we need to – and look, this is reflective of what I think the brand should be doing. I think, we need to pace ourselves in these markets, the total volume ambitions for Maserati until 2018 of 75,000 cars, that's the number that I outlined for 2018, it's a number that should not be violated and we should not be rushing to try and get there. And what happened in the last 12 months is that I think we've accelerated the pace beyond what I consider to be the natural absorption rate in the markets.

We need to slow it down, we need to take a deep breath and just work our way through the issues and effectively get ready for the Levante launch and manage that in a very tight way, as a premium brand out to managed distribution. And to be perfectly honest, I don't think that was done, we're in correction mode now, and I think we need to work our way through that issue, hopefully by 2016, the issue will be back on, especially with the Levante being in the market.

Alberto Villa - Intermonte SIM SpAOkay. Thanks. And the last one is on the recalls, the cost of €73 million that you booked as let's say pertaining to the quarter. I was, I mean, trying to understand because this issue of recalls is becoming more and more current, what in the future might be the cost for recalls that could be reasonably forecastable for us?

Sergio Marchionne - Chief Executive Officer & Executive DirectorI think that the provision that we have made, and I want to preempt Richard from answering, if he has anything else to add to this. The provision that we have booked reflects our understanding and our expectations as to what our exposure will be on the recall side, based on what we know today. It's our best estimate of the impact of this new regulatory environment and the response rate that FCA has experienced with these issues. Just read it as that, I have no better information. If I had better information that suggested a cost higher than this, I would have booked it.

Alberto Villa - Intermonte SIM SpAOkay. Okay. Thank you.

Operator

We will now take our next question from Larry Vellequette of Automotive News. Please go ahead.

Larry P. Vellequette - Automotive NewsThank you for taking my question. I had two I'd like to discuss. One, in the UAW contract, you outlined a series of product allocations in that schedule. And I was wondering, if in doing this, you identified whether or not any more manufacturing capacity in North America was necessary going forward?

Sergio Marchionne - Chief Executive Officer & Executive DirectorWell, in terms of sites, not; in terms of capacity, yes.

Larry P. Vellequette - Automotive NewsSo, you're just going to be making that up through increased efficiency?

Sergio Marchionne - Chief Executive Officer & Executive DirectorOr increased headcounts, one of the two.

Larry P. Vellequette - Automotive News Okay.

Sergio Marchionne - Chief Executive Officer & Executive DirectorOr a combination of both.

Larry P. Vellequette - Automotive NewsOkay. And the other question I had, regarding your earlier comments about your rethink of Ram, and moving into segments. I'm going to go out on a limb here and make an assumption that you're talking about a large SUV, a truck-based SUV. And I'm wondering, if that's the case, how might that square with a Grand Wagoneer that you've said might be delayed until 2019?

Sergio Marchionne - Chief Executive Officer & Executive DirectorNot the same animal, as you well know, these are two different.

Larry P. Vellequette - Automotive News Okay.

Sergio Marchionne - Chief Executive Officer & Executive DirectorI don't think anybody who buys a large SUV today would ever be confused about trading it for a Range Rover.

Larry P. Vellequette - Automotive NewsAll right. But do you think there is room in a large truck-based body-on-frame SUV for Ram to make some headway?

Sergio Marchionne - Chief Executive Officer & Executive DirectorThere's 300,000 people a year that believe that story.

Larry P. Vellequette - Automotive NewsBut they're going elsewhere. All right, thank you very much.

Sergio Marchionne - Chief Executive Officer & Executive DirectorFor now, yes, thanks.

Operator

We will now take our next question from Rod Lache of Deutsche Bank. Please go ahead.

Rod A. Lache - Deutsche Bank Securities, Inc.Good afternoon, everybody. A couple of questions; one is, there have already been a few questions on this change in direction in NAFTA. Can you give us a sense of the magnitude of what you're contemplating in terms of your expansion in trucks? Is there are a commensurate reduction also in expansion for other areas of the company, which would be facing maybe structural or competitive challenges? And when you assess the market's ability to absorb this without it affecting price, is it your thinking that demand for these segments is going to grow in the future?

Sergio Marchionne - Chief Executive Officer & Executive DirectorYes. Look, I think it's absolutely premature to try and discuss what compensation maneuvers we will carry out. A couple of basic points, which I think are going to be shared by everybody whether they tell you this or not is that, there is not a single doubt the margin generation of the larger vehicles is significantly higher than it is in what I consider the commodity and the passenger cars. And it's something that we've struggled with now for the last three years or four years, especially after the introduction of the Dart and the Dodge and the Chrysler 200, it is an issue that needs to be addressed, it needs to be addressed because industrialization and variable costs for these things are just not paying the piper. And so we need to find a better way to manage this, and that's a separate and completely separate discussion from our willingness to enter what I consider to be a more profitable market segment. And the answer to your question, just to give you a benign answer, I think that there's additional volume potential for these vehicles and that we will be riding the growth curve of that segment. I don't think anybody is threatening others with taking current volumes away from a competitor. I think the market itself will bear enough of an opportunity for us to be present.

Rod A. Lache - Deutsche Bank Securities, Inc.Can you address the deficiencies in some of these challenging segments by stopping investment and exiting there, or do you always believe that the company needs to be in those segments?

Sergio Marchionne - Chief Executive Officer & Executive DirectorI think the company needs to find an intelligent way of being present. And because of our global footprint, and the fact that a lot of these cars are really our mainstay products in other jurisdictions, we need to learn how to make them in an intelligent way. And to be perfectly honest, I fail to see why people like the Asians can effectively compete here and we can't. We need to understand that much better. And I think that we're in the discovery mode now, I think we have a lot of work to do at our end. I am comfortable that we'll find a solution that will put that issue to bed.

Certainly, when you look at prioritizing investments, if any rational human being, given current market conditions, would favor larger vehicles, given our margin generation in the smaller stuff. And by the way I'm not offended by this from an environmental standpoint because technology will compensate for the size. I think that these vehicles will require additional technology on the powertrain side to compensate for the emission status, and I think that the market will bear it and I think those are ideal vehicles within which to try it.

We'll see what happens when the introduction of the plug-in hybrid, with the minivan. But I think there are other things obviously that are going to be rolled out from our product portfolio including belt starter generators, things of that caliber, which will keep on reducing the impact on the environment from a larger vehicle. So, we need to continue to work, and I think we'll give you an update on that on our portfolio strategy at the end of January.

Rod A. Lache - Deutsche Bank Securities, Inc.Okay. And just lastly, I was hoping you can comment on the Latin America trajectory from here. Maybe just tell us what the run rate of Pernambuco is right now. Obviously, it ramps up through the middle of next year.

Sergio Marchionne - Chief Executive Officer & Executive DirectorI'm just giving you numbers off the top of my head. I think it's probably running between 65,000 and 75,000 cars a year on an annualized basis. It will probably by the time, we finish ramping it up, it will be over 100,000 and will be crossing over 100,000 by the second quarter of 2016.

Rod A. Lache - Deutsche Bank Securities, Inc.Great. Thank you.

Operator

We'll now take our next question from Richard Hilgert of Morningstar. Please go ahead.

Richard John Hilgert - Morningstar ResearchThanks for taking my questions. Couple, just to get a little better understanding; I know it's been asked a couple of times. Most of my questions regarding NAFTA and other regions have already been asked. But LatAm, with the improvement in the third quarter how much of that could be attributable to the Renegade launch, and then are we – or should we expect to see further improvement in the fourth quarter or is this pretty much where we're going to be at going into the beginning of 2016?

My second question is on the performance of the Ghibli in Maserati, given your earlier comments about how Maserati has – you wanted to dial back the volume and have a steadier growth rate going through your 2018 target. Was that Ghibli – was that the model that you dial back or is there a demand issue going on with the Ghibli that volume wasn't or isn't as good as what you might have thought it would have been, and given the decline in volume at Maserati, I was surprised to see the EBIT drop as much as it did. I was wondering if you could comment a little bit there, maybe there is some cost going in because of the SUV ramp-up that might have affected that?

Sergio Marchionne - Chief Executive Officer & Executive DirectorJust to deal with the Maserati issue, the quarter has been impacted by ramp-up costs of the Levante, which will go into production at the end of this year, beginning of next year. I think we need to be – we're not going to decompose it, but just to give you a broad answer on the Ghibli, the Ghibli is absolutely fine. I think that there is a natural absorption rate of a vehicle in a market and I think that the minute that you try and exceed those, if you misread the absorption rate which I think has happened here on Maserati, you end up having to dial it back.

Our own ambitions for the brand had never been built on volumes, which were – the run rate that we had certainly in some parts of 2015 and the early parts and at the end of 2014. We've probably broken the speed of sound and I think we need to dial it back and in fact we allow this brand to build a piece of the time to get to 75,000 vehicles a year, which is the target for 2018.

In terms of the Latin American numbers, the best way to assume the profitability is to assume that we're making zero profits out of the horizontal plan that we are making 1.8% margins result attributable to the other side. That's probably the easiest way...

Richard John Hilgert - Morningstar Research Okay.

Sergio Marchionne - Chief Executive Officer & Executive Director...for you to understand.

Richard John Hilgert - Morningstar ResearchOkay. And one last follow-up on just a housekeeping item; if I take a look at the EBITDA in your slide deck, you've got €2.665 billion. If I back into an adjusted EBITDA number using what you've got in the press release for adjusted EBIT and the difference their between that and your EBITDA number in the press release, I come up with an adjusted EBITDA number of €2.726 billion. Is the difference there financial services?

Richard Keith Palmer - Chief Financial OfficerYes, it is.

Richard John Hilgert - Morningstar ResearchOkay. Thanks, Richard.

Richard Keith Palmer - Chief Financial OfficerThank you.

Operator

We will now take our next question from Stephen Reitman of Société Générale. Please go ahead.

Stephen M. Reitman - Société Générale SA (Broker)Yes, thank you. Good afternoon. Moving on to Alfa Romeo, I took your comments that you're keeping the 400,000 unit target for 2018. But you've – having adjusted your some of the definition in particular relation to China. Could you give some indication on where you think that you'll be redirecting these units?

Sergio Marchionne - Chief Executive Officer & Executive DirectorWhere else, but China. I mean that I'm going to have to give you a dumb answer because I gave you a broad indication of what I think market conditions in China are going to dictate us. Based on what I see today in terms of market performance, I still think that Alfa belongs in China, the expectations of volumes out of the total pool of 400,000 cars by that date were, I think given current market condition is not achievable. So, we need to find it somewhere else. And I think Europe and NAFTA are probably the best areas to deliver it.

But that's going to require rejigging on the launch of the cars because there are cars that are more ideally suited for these markets than they would have been for China. And so, we need to work over the next 30 days, 60 days to try and refine them and give you a better answer by January of next year. But look, two things, one, the product plan is confirmed, the sequencing is going to be adjusted in mainly of the capital phase overall by 2018, although over the term until 2019 or 2020 we'll spend the same amount of money as we had originally forecasted and the numbers are not shrinking.

Stephen M. Reitman - Société Générale SA (Broker)And in terms of just going back to Maserati, your comments about finding the natural rhythm of the specific models. Do you think basically by beginning of 2016 you will effectively clear out the inventory that demonstrate us in the spin with the dealers. Thank you.

Sergio Marchionne - Chief Executive Officer & Executive DirectorAbsolutely.

Stephen M. Reitman - Société Générale SA (Broker)Okay. Thank you.

Operator

That will conclude the question-and-answer session. I would now like to turn the call back over to Joe Veltri for any additional or closing remarks.

Joseph Veltri - Head-Investor RelationsThank you, Tara Lee, and thanks to everyone for joining the call today. Any subsequent questions you have can be directed to the IR team after this call. Thank you and have a pleasant day.

Operator

That will conclude today's conference call. Thank you for your participation, ladies and gentlemen. You may now disconnect.

Modificato 29 Ottobre 2015 da pennellotref

[Cosimo]

fa un sunto che mi son scassato la meenghia a ledisengentlemen

[jacksparrow.82]

fa un sunto che mi son scassato la meenghia a ledisengentlemen

Vedi l'importanza del dono della sintesi

[Ospite]

fa un sunto che mi son scassato la meenghia a ledisengentlemen

Sono preoccupati per la flessione della Cina.

[justjames]

In Cina la GAC ha cominciato a produrre il Cherokee il 19 ottobre...

[Cosimo]

la cina è una grossa preoccupazione per tutti, anche la triade sta stringendo le chiappe. Purtroppo cosa accadrà è abbastanza imprevedibile al momento, imho non lo sanno nemmeno i cinesi