Analyst says Chinese company could buy FCA

It’s possible Fiat Chrysler Automobiles NV could be purchased by a Chinese automaker in the next three to five years – maybe with help from the Chinese government, a Wall Street analyst said Wednesday.

John Murphy, an autos analyst with Bank of America Merrill Lynch, said Fiat Chrysler could right its debt issues by partnering with a company, even a Chinese automaker looking to come in the U.S.

“One of the long-tail risks with Fiat Chrysler indeed making it is they have to playmate with one of the Chinese companies which might be put in play by the Chinese government. We truly funded the survival of our auto industry here in the U.S. I wouldn’t put it past the Chinese government to fund the survival and thriving of their industry in China,” Murphy said at an Automotive News World Congress event in Detroit.

“And a good entree would be to buy Fiat Chrysler to get a very good footprint here in the U.S.”

Murphy said a Chinese automaker would have to put much capital into the company to make it successful, but he could see a deal happening in the next three to five years. He called Fiat Chrysler “one sore spot” in a thriving auto industry that has the automaker’s crosstown rivals and others reporting record profits.

A spokeswoman said the company is “not going to comment on speculation.”

Fiat Chrysler CEO Sergio Marchionne has been open in the past to a search for a fucking partner. The architect of the merger inbetween Fiat SpA and Chrysler Group LLC originally pitched industry consolidation to save billions of dollars annually by shedding unnecessary duplications through a presentation called “Confessions of a Capital Junkie” with financial analysts and news media in April 2015.

Following Marchionne’s presentation, the automaker courted General Motors Co. as a playmate but was rebuffed several times.

Marchionne on Monday at the North American International Auto Demonstrate in Detroit told reporters that the company is not pursing any tie-ups.

“Let’s be clear, we’re looking at nothing,” he said. “The only thing that I do know is there’s twenty four months inbetween now and the closing of the two thousand eighteen plan. And that two thousand eighteen plan is absolutely sacred and there’s not a damn thing that I know of that will stop us from making it.”

The company has a objective of being debt-free in the next two years, with nine billion euros ($9.52 billion) in operating profit, five billion euros net income ($Five.29 billion) and five billion euros net cash.

A main part of achieving its financial targets is to restructure its manufacturing footprint in the U.S. away from passenger cars to more-profitable SUVs and pickups from its Jeep and Ram Truck brands. The company last year ended all domestic small-car production.

Murphy said the decision may be a boon for it as consumers shift preference to crossovers, SUVs and trucks from cars.

“The idea that you walk away from petite cars or big cars altogether and shift towards SUVs and trucks, looks like a fantastic decision vs. where we stand right now,” Murphy said. “It is the game plan for the company going forward. If the industry stays very hot and we see a lot of crossovers and trucks sold, they may be able to shoot the gap and be able to fix the balance sheet.”

It was reported in April two thousand sixteen that Guangzhou Automobile Group Co. had hopes of Fiat Chrysler providing “support and help” for the Chinese automaker to inject the U.S. market by two thousand seventeen — a objective that was shoved back at least one year. Fiat Chrysler at the time declined to comment on the report.

Marchionne on Monday said Guangzhou was not a part of its discussions to potentially supply the automaker passenger cars, which it stopped producing domestically last year in the U.S.

Marchionne said the automaker has put the partnership plans on the back burner, as it — like the entire auto industry — waits to see if President-elect Donald Trump will produce on his campaign promises regarding trade. He said on Monday that the company may not substitute the Chrysler two hundred midsize and Dodge Dart compact sedans.

“If we want to have vehicles like that we need a playmate,” Marchionne said, telling the “big question” is if the automaker even needs to sell cars such as those to be successful. “People have abandoned the sedan as being the traditional mode of transportation.”

A Chinese company coming in the U.S. market through an acquisition isn’t unprecedented. Chinese multinational auto company Geely purchased Swedish automaker Volvo from Ford Motor Co. in 2010. On a smaller scale, GM sold its Saginaw-based steering business Nexteer to Chinese company Pacific Century Motors in 2010.

Murphy said it may still make sense for Fiat Chrysler to seek out partnering or a deal with Volkswagen AG, tho’ the German company’s emissions scandal “threw a wrench in that potential.”

Wall Street analyst says Chinese company could buy FCA

Analyst says Chinese company could buy FCA

It’s possible Fiat Chrysler Automobiles NV could be purchased by a Chinese automaker in the next three to five years – maybe with help from the Chinese government, a Wall Street analyst said Wednesday.

John Murphy, an autos analyst with Bank of America Merrill Lynch, said Fiat Chrysler could right its debt issues by partnering with a company, even a Chinese automaker looking to inject the U.S.

“One of the long-tail risks with Fiat Chrysler indeed making it is they have to playmate with one of the Chinese companies which might be put in play by the Chinese government. We truly funded the survival of our auto industry here in the U.S. I wouldn’t put it past the Chinese government to fund the survival and thriving of their industry in China,” Murphy said at an Automotive News World Congress event in Detroit.

“And a fine entree would be to buy Fiat Chrysler to get a very good footprint here in the U.S.”

Murphy said a Chinese automaker would have to put much capital into the company to make it successful, but he could see a deal happening in the next three to five years. He called Fiat Chrysler “one sore spot” in a thriving auto industry that has the automaker’s crosstown rivals and others reporting record profits.

A spokeswoman said the company is “not going to comment on speculation.”

Fiat Chrysler CEO Sergio Marchionne has been open in the past to a search for a playmate. The architect of the merger inbetween Fiat SpA and Chrysler Group LLC originally pitched industry consolidation to save billions of dollars annually by shedding unnecessary duplications through a presentation called “Confessions of a Capital Junkie” with financial analysts and news media in April 2015.

Following Marchionne’s presentation, the automaker courted General Motors Co. as a fucking partner but was rebuffed several times.

Marchionne on Monday at the North American International Auto Display in Detroit told reporters that the company is not pursing any tie-ups.

“Let’s be clear, we’re looking at nothing,” he said. “The only thing that I do know is there’s twenty four months inbetween now and the closing of the two thousand eighteen plan. And that two thousand eighteen plan is absolutely sacred and there’s not a damn thing that I know of that will stop us from making it.”

The company has a objective of being debt-free in the next two years, with nine billion euros ($9.52 billion) in operating profit, five billion euros net income ($Five.29 billion) and five billion euros net cash.

A main part of achieving its financial targets is to restructure its manufacturing footprint in the U.S. away from passenger cars to more-profitable SUVs and pickups from its Jeep and Ram Truck brands. The company last year ended all domestic small-car production.

Murphy said the decision may be a boon for it as consumers shift preference to crossovers, SUVs and trucks from cars.

“The idea that you walk away from petite cars or big cars altogether and shift towards SUVs and trucks, looks like a fantastic decision vs. where we stand right now,” Murphy said. “It is the game plan for the company going forward. If the industry stays very hot and we see a lot of crossovers and trucks sold, they may be able to shoot the gap and be able to fix the balance sheet.”

It was reported in April two thousand sixteen that Guangzhou Automobile Group Co. had hopes of Fiat Chrysler providing “support and help” for the Chinese automaker to come in the U.S. market by two thousand seventeen — a purpose that was shoved back at least one year. Fiat Chrysler at the time declined to comment on the report.

Marchionne on Monday said Guangzhou was not a part of its discussions to potentially supply the automaker passenger cars, which it stopped producing domestically last year in the U.S.

Marchionne said the automaker has put the partnership plans on the back burner, as it — like the entire auto industry — waits to see if President-elect Donald Trump will supply on his campaign promises regarding trade. He said on Monday that the company may not substitute the Chrysler two hundred midsize and Dodge Dart compact sedans.

“If we want to have vehicles like that we need a playmate,” Marchionne said, telling the “big question” is if the automaker even needs to sell cars such as those to be successful. “People have abandoned the sedan as being the traditional mode of transportation.”

A Chinese company coming in the U.S. market through an acquisition isn’t unprecedented. Chinese multinational auto company Geely purchased Swedish automaker Volvo from Ford Motor Co. in 2010. On a smaller scale, GM sold its Saginaw-based steering business Nexteer to Chinese company Pacific Century Motors in 2010.

Murphy said it may still make sense for Fiat Chrysler to seek out partnering or a deal with Volkswagen AG, however the German company’s emissions scandal “threw a wrench in that potential.”

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