Marchionne: FCA Faces Daunting Challenges to Avoid “Mediocrity”

CEO Sergio Marchionne tells Automotive News Fiat Chrysler Automobiles NV will be able to survive "in mediocrity" without a partner, although he continues to tout the benefits of merging with General Motors Co.

Marchionne says FCA can survive long term if it can quickly build global sales of Jeep SUVs and successfully relaunch its Alfa Romeo brand worldwide. But analysts point to a lengthy list of additional hurdles to the company's survivability. Among them, AN reports:

• FCA is the only major carmaker with net debt: some $8 billion (€7.1 billion)
• The company's profit margins trail its rivals
• Much of FCA's lineup uses dated technologies and old platforms
• Only three of the company's U.S. models all of them Jeeps are sales leaders in their segments
• FCA is burdened by the expense of too many vehicle platforms compared with its competitors
• Virtually all rivals are ahead on hybrids, electric vehicles and research on electronic driver aids, connectivity and self-driving systems
• FCA's fuel economy average in the U.S. (21.1 mpg) last year was the lowest among all high-volume producers in the market

Over the past six years FCA has paid off $12.2 billion in federal loans, spent $11 billion to buy back bailout shares held by the United Auto Workers union's retiree healthcare and invested billions more to update antiquated production plants. The company also has launched an ambitious $54 billion (€48 billion) product overall.

In the end, AN says, FCA needs more resources, and that means a partner.