Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne, one of the longest-serving bosses in the auto industry, said the company can double profit within five years by exploiting the potential of the Jeep brand. Photographer: Chris Ratcliffe / Bloomberg With the offroad nameplate in the position of the 20-year-old, it is the largest market in the world. Marchionne was steadfast in his commitment to retire from Fiat in early 2019 after 15 years, succeeded by one of his lieutenants, he said in an exclusive sit-down interview in Detroit ahead of the North American International Auto Show. Marchionne has made Fiat a car-maker with a Chrysler, giving the group brands Jeep, Alfa Romeo and Maserati. While small compared with giants like Volkswagen AG and Toyota Motor Corp. , Marchionne has given Fiat a new lease on life by streamlining expenses and shifting from unfashionable sedans to higher margin sports utility vehicles. His growth strategy is focused on a global expansion of Jeep.
“There’s nothing that can be said about SUVs,” equivalent to about 5 million deliveries a year, Marchionne said. “If that’s true, the upside for FCA – we’re just starting to skim the surface.” If Jeep can reach these targets, it would mean “the profitability of this house is going to be multiple” and “it’s possible,” he said. President Donald Trump’s tax cuts could be boosted by $ 1 billion a year, he added. The carmaker targets at least 7 trillion euros ($ 8.5 trillion) in 2017. Stressed by the demands of day-to-day competition, regulatory issues and disruptive changes, “this business, if you really want to do it, is all-consuming,” Marchionne, 65, said. “I am tired. I want to do something else. ” Marchionne’s successor will have to meet the expectations of a rapidly changing auto industry that dilutes the edge of traditional carmakers. He says there is an evolving list of internal candidates under review. All of these executives are working on Fiat’s strategic plan through 2022, and one of them will be making up the “top dog,” he said, adding that it would not indicate the company would look to make an external hire. Chief Financial Officer Richard Palmer is seen by investors as the leading candidate for the job. Jeep chief Mike Manley and Alfredo Altavilla, who returned Fiat’s European operations to profit, are seen as Palmer’s main contenders. While Marchionne declined to identify any people on the short list, he said it included potential candidates reported in the press as well as someone else, who is not in the media’s spotlight. Marchionne’s Future Fiat Chrysler CEO closed the door on prospects of extending his tenure in the early 2019 Open to role at Fiat shareholder Exor: “If my presence is required, I will stay” Has Ferrari NV , where he’s also CEO, his job of transforming the supercar maker into a luxury brand needs to be completed: “I need to finish what’s started”
Fiat’s new five-year strategy will be presented June 1, the same day he was hired as CEO in 2004 in the drama after Umberto Agnelli passed away. John Elkann, the young heir of the billion dollar family, was looking for new leadership at SGS and with no experience in the auto industry. The move paid off. Fiat’s value has climbed to 29.5 billion euros after soaring 28 percent in the first two weeks of 2018. The iconoclastic executive, who favors black-jackets, plans to leave Fiat after debt erasing, accumulating at least 4 billion euros of net cash and boosting net profit to about 5 billion euros. “I do not know a reason to confirm 2017 guidance and 2018 targets,” the Fiat CEO said. The CEO is open to staying connected with the Italian-American carmaker through a role at the billionaire Agnelli family’s Exor SpA Fiat Chrysler’s dominant shareholder and the main beneficiary of Marchionne’s wheeling and dealing, which also saw the spinoffs of Ferrari NV and CNH Industrial. During its tenure, it increased the size of the conglomerate by $ 80 billion. Forced ‘Celibacy’ Still, the challenges for Fiat and other mass-market carmakers will intensify in the coming years. For now, Fiat is planning to tackle the disruption on its own. After Marchionne’s push to merge with General Motors Co. fizzled, an alternative is not around the corner. “If nobody wants you, then celibacy may be the only option,” said Marchionne. “I think of the notion of celibacy,” and sees Fiat now in a stronger position after GM spurned his approach.