THE MARKET REJECTS THE SAVINGS FIAT
WITHOUT INVESTMENT, YOU END UP IN DETROIT
This morning the New York Times, after illustrating Chrysler's excellent results, asked Jessica Caldwell, senior analyst at Edmunds.com, a prestigious independent study center, if the Detroit company's performance would solve Fiat's problems. The answer was no. "As impressive as Chrysler's recovery is - said Miss Caldwell - it is not enough to remedy the problems of the Italian company in the medium term, which has been hit hard by the European problems". Operators feel the same way. Yesterday afternoon, immediately after the release of the Fiat data, large sales orders rained down on the Lingotto stock which caused a drop of around 6% below the 4 euro mark.
The rejection of the market stems from one consideration: without the American partner Chrysler, of which Fiat has 61,8%, there is a net loss of 246 million in just one quarter. Faced with this number, it matters little that, thanks to the exploits of the Detroit subsidiary which holds a market share of 11,2% of the US market (more than double what Fiat has in Europe…), the quarter ended closed with a trading profit of just over one billion euros (better than the consensus of analysts, 965 million, and about double that of a year ago) . Or that the financial data signal an improvement: liquidity increases, 22,7 billion (from 21,4 at the end of March), net industrial debt decreases (5,4 billion, 300 million less). The "savings" on the investment front, a choice dictated by the collapse in demand, makes the near future even more uncertain, as evidenced by the slowdown in turnover (-7,5% net of the Chrysler contribution).
It is very unlikely that Fiat will be able to react in foreseeable times if investments fall even more than the already very cautious estimates of the day before. It is much easier, given the situation, to predict that the center of gravity of the group is destined to move more and more towards the West, to the other side of the ocean. Chrysler, warns Sergio Marchionne himself from New York, is on the way to achieving its goals for 2014, when Exor's grip on the group will be consolidated. Even if, Marchionne continues, Chrysler's IPO "is not an event of 2012". And Fiat? By now it is evident that the top management of Lingotto do not believe in a "spontaneous" recovery of the European market and are relying on the one hand on a possible intervention plan managed by the EU to resolve the problem of production overcapacity, on the other on possible mergers and alliances that could arise from this choice of economic policy. The alternative? In Turin, Volkswagen is feeling the pressure, determined to exploit the group's weakness to finally attack Alfa Romeo. A year ago, Ferdinand Piech declared that "the situation was not yet ripe". Today, seen from Wolfsburg, the situation seems propitious for a decisive push. Marchionne, obviously, is not of this idea. Hence an unprecedented conflict between Turin and the German giant.
