Analysts: Fiat Chrysler Lacks the Funds to Meet Sales Plan

Fiat Chrysler Automobiles NV aims in five years to hike sales 60%, revenue 40% and operating profits more than 100%. But analysts tell Automotive News Europe all three targets are beyond the company's reach.

By region, the company hopes to boost units sales 36% in Europe/Africa/Middle East, 44% in Latin America, 48% in North America and more than four times in Asia Pacific. CEO Sergio Marchionne says reaching those lofty goals will be possible by introducing more models and selling them in broader markets.

Thus the Chrysler brand will expand to six models that cover two-thirds of the global automotive market from three models that cover 25% today. Jeep will extend its local manufacturing operations from four factories in the U.S. to 10 plants in six countries. Alfa Romeo will dramatically expand its product lineup to eight models and launch a global marketing initiative. And the Fiat brand will focus on markets outside Europe for growth.

Skeptical analysts don't think the company has the resources to simultaneously pursue so many aggressive expansion plans. They insist Marchionne's only hope is to combine or drop some of its nine brands. They also worry about Fiat Chrysler's €10 billion net debt and costs associated with another €55 billion in self-financed investments.

Marchionne retorts that Fiat Chrysler's brands are well positioned to avoid competing with each other. He believes consolidation or reductions would hurt market share and overall sales volume.