Fiat, the fastest-growing European carmaker, said Tuesday that profit more than doubled in the second quarter as the company increased market share and reduced production costs.
The chief executive, Sergio Marchionne, led Fiat to its first profit in five years in 2005 by changing managers, sharing components among models and introducing successful cars. Fiat's European market share widened to 8.2 percent in the first six months, from 7.6 percent a year earlier, as it sold more Grande Punto hatchbacks and Panda subcompacts. It was also helped by a loss of market share by Renault of France.
"The market's expectations were too high," said Massimo Gaggiotti, the head of investments at RMJ in Milan. At the same time, "there has been a great change of image brought by Marchionne."
Net income beat the €485 million median estimate of six analysts surveyed by Bloomberg News.
The company cut auto production costs by starting to share key components among models, enabling Fiat to make more than one car in the same factory and trim development expenses for new vehicles. Increased sales allowed Fiat to spread the savings to a greater percentage of cars, reducing unit costs.
Fiat's operating margin widened to 6.2 percent in the quarter from 4.8 percent a year earlier, the company said. The production changes had helped Fiat widen its operating margin to 4.35 percent in the first three months of the year, beating Volkswagen, the largest carmaker in Europe, which had a margin of 4.07 percent, according to Bloomberg data.
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Fiat done fiat but nows the hard part ,hope the momentum continues.
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