How Fiat Chrysler 'got smart on pricing' - GazetteNET
DETROIT — When Fiat Chrysler Automobiles recently reported second quarter earnings, CEO Sergio Marchionne said the company more than doubled operating profit in North America because “we got smart on pricing. For years, FCA’s crosstown rivals have had profit margins in North America that were two or three times higher than Chrysler’s. For an automaker, lower profit margins can cool off Wall Street investors and lead to lower stock prices and also smaller profit sharing checks for hourly workers. But analysts this year say brisk sales of specific models, including the Ram 1500 Laramie Limited and the Dodge Challenger and Charger Hellcats, along with a steady increase in Jeep sales, have boosted average transaction prices for FCA. During the second quarter, Fiat Chrysler earned a pretax profit of $1. 4 billion in North America. Marchionne delivered on profit margin, too, during the second quarter. The company’s profit margin was 7. 7 percent - up from 4. 9 percent last year. That’s still a far cry from the Ford’s 11. 1 percent or GM’s 10 percent profit margin, but it was enough to impress Wall Street and drove the company’s stock to its highest price since late April. “Heading into these second quarter results, we expected another modest NAFTA result, a tiny profit in Europe and massive Latin American losses. Source: www.gazettenet.com
