Fiat Chrysler Automobiles (FCA) released its global 2020 Q3 results this morning, during a conference call. According to FCA, the North American marketplace lead the way for the company with its Ram Trucks and Jeep® brand portfolio. The quarter shows the automaker posted a net profit of $1.4 billion (or €1.2 billion), just as it is trying to finalize its merger with French automaker Groupe PSA.
In North America, over shipments were down by 8%. This was primarily due to lower Ram 1500 Classic shipments, due to planned downtime for retooling to produce the all-new Grand Wagoneer/Wagoneer at the company’s Warren Truck Assembly Plant in Warren, Michigan. The Ram 1500 Classic continues to be a strong seller for the brand in certain areas of the U.S. and most of Canada. FCA also noted that the discontinuation of the Dodge Grand Caravan also played a huge part in the lower number of shipments. That model will is being replaced by the Chrysler Voyager in the U.S. and the Chrysler Grand Caravan in Canada.
|North America Q3 Results||Q3 2020||Q3 2019|
|Net revenues (€ million)||18,483||(583)|
|Adjusted EBIT (€ million)||2,544||+525|
|Adjusted EBIT margin||13.8%||+320 bps|
“Our record results were driven by our team’s tremendous performance in North America. During the quarter, we unveiled ‘white-space’ products across many brands; launched the next chapter for our storied Maserati brand; confirmed our market leadership in Latin America; and continued the rapid pace of our global investments in electrification. Once again, our team has proven its extraordinary resilience and creativity, and, as we close in on the merger to create Stellantis, we are stronger and more focused than ever on our mission to deliver great value for all our stakeholders”, said FCA CEO Mike Manley.
The white space products Manley is talking about are the high-anticipated 2021 Ram 1500 TRX performance-offroader (coming in Q4 2020), the electrified Jeep Wrangler Unlimited 4xe (which is coming in the Q1 of 2021), the Jeep Grand Wagoneer/Wagoneer (coming in Q2 of 2021), and the all-new Maserati MC20 mid-engined super sportscar (starting production in Q4 2020).
In the APAC region, combined shipments were down 29% due to lower Chinese joint venture volumes. Net revenues were down 17%, primarily due to lower volumes and negative foreign exchange effects. FCA also said that adjust EBIT loss increased due to lower Net revenues and lower results from the Chinese joint ventures and was partially offset by cost containment actions.
|APAC Region Q3 Results||Q3 2020||Q3 2019|
|Combined shipments (000s)||25||(10)|
|Consolidated shipments (000s)||15||(2)|
|Net revenues (€ million)||570||(117)|
|Adjusted EBIT (€ million)||(32)||(22)|
|Adjusted EBIT margin||(5.6)%||-410 bps|
For the EMEA region, combined shipments were up 10% due to higher volumes from its Turkey joint ventures. Consolidated shipments were down 5%, thanks to lower industry volumes, while Net revenues substantially flat due to the lower volumes and were offset by positive net pricing related to the new-launched electrified vehicles like the Jeep Renegade and Compass 4xe models and Fiat E-Ducato commercial van. Adjusted EBIT was also down due to the lower volume and increased product electrification costs. That was partially offset by positive net pricing, cost containment actions, and higher joint venture results.
|EMEA Region Q3 Results||Q3 2020||Q3 2019|
|Combined shipments (000s)||297||+27|
|Consolidated shipments (000s)||248||(12)|
|Net revenues (€ million)||4,595||(65)|
|Adjusted EBIT (€ million)||(125)||(70)|
|Adjusted EBIT margin||(2.7)%||-150 bps|
In LATAM, shipments were down 3% during the quarter due to continued market downturn, offset by strong demand for the recently launched all-new Fiat Strada pickup, the Fiat Cronos, and Fiat Fiorino. Net revenues were down by 30%, due to the discontinuation of Brazilian tax credits and negative foreign exchange translation effects from the weakening of the Brazilian real. Adjusted EBIT was down 70%, caused by lower Net revenues, product cost
inflation, and negative foreign exchange transaction effects.
|LATAM Q3 Results||Q3 2020||Q3 2019|
|Net revenues (€ million)||1,532||(659)|
|Adjusted EBIT (€ million)||46||(106)|
|Adjusted EBIT margin||3.0%||-390 bps|
FCA reports the Maserati brand’s Q3 results, are recorded separately from the rest of the FCA brands. In its results for Q3, Maserati reported that shipments were up 7% thanks to the North America and Chinese markets. Net revenues were flat, with higher volumes offset by higher incentives, mainly in China, and negative foreign exchange translation effects. Adjusted EBIT loss increased due to higher marketing costs to support the brand’s new marketing strategy, new product launch costs, and negative net pricing, and offset by lower depreciation and amortization.
|Maserati Q3 Results||Q3 2020||Q3 2019|
|Net revenues (€ million)||394||–|
|Adjusted EBIT (€ million)||(70)||(19)|
|Adjusted EBIT margin||(17.8)%||-490 bps|
FCA and Groupe PSA amended their Combination Agreement in September, preserving its original balance while addressing the liquidity impact of the COVID-19 pandemic on the automotive industry. Specifically, the special dividend to be paid to FCA’s shareholders is set at €2.9 billion (previously €5.5 billion) with Groupe PSA’s 46% stake in Faurecia distributed to all Stellantis shareholders promptly after closing following approval by the Stellantis Board and shareholders.
As announced today, FCA and Groupe PSA agreed to permit Groupe PSA to dispose of, prior to closing, a portion of its interest in Faurecia not to exceed 7% of Faurecia’s outstanding share capital with the proceeds of this disposal, along with the remainder of Groupe PSA’s current 46% stake in Faurecia, to be distributed to all Stellantis shareholders. The annual run-rate synergies for Stellantis were increased to more than €5 billion from the €3.7 billion originally estimated. In addition, the total estimated one-time implementation costs of achieving these synergies have also increased from €2.8 billion to up to €4 billion.
The merger should be completed sometime during Q1 of 2021.