Photo: FCA
It was a big end of the week for the Italian-American auto alliance that calls itself FCA. During a long and eventful press conference, FCA's head Sergio Marchionne outlined plans that are to completely revive the former glamour of the brands in the group.
We already detailed what Marchionne has planned for all of the brands, with some getting more attention than others. But new product roll out, electrification and a revamping of the manufacturing processes are not all there is to the new FCA.
It took Marchionne nearly four years to realize the group he is leading is the only major automaker in the U.S. without a captive financing arm. So he set out to fix that.
Currently, the financial needs of FCA's customers are in the care of Chrysler Capital, owned and operated by Santander Consumer USA and a pack of banks. Sometime in the undisclosed future, the carmaker would set up its own financial branch.
The decision was made, says Marchionne, given the company's success on the local market. Last year, FCA sold 2.1 million cars and trucks in the U.S., but that performance might have been much better had its own financial arm existed.
“Given our strong financial performance and improving credit profile, we believe the time is right to pursue a U.S. Finco strategy,” Sergio Marchionne said in a statement.
“FCA will have adequate capital to fund the equity needed and expects to have the credit rating to make the Finco funding competitive.”
It's not yet clear whether Fiat Chrysler would acquire an existing financial services business or create an entirely new one. The decent choice would be of course buying into Chrysler Capital, and the carmaker says initial talks with the entities owning it have already begun.
Overall, Marchionne's statements on Friday were powerful enough to make FCA shares fall by 4.5 percent in Milan.
It took Marchionne nearly four years to realize the group he is leading is the only major automaker in the U.S. without a captive financing arm. So he set out to fix that.
Currently, the financial needs of FCA's customers are in the care of Chrysler Capital, owned and operated by Santander Consumer USA and a pack of banks. Sometime in the undisclosed future, the carmaker would set up its own financial branch.
The decision was made, says Marchionne, given the company's success on the local market. Last year, FCA sold 2.1 million cars and trucks in the U.S., but that performance might have been much better had its own financial arm existed.
“Given our strong financial performance and improving credit profile, we believe the time is right to pursue a U.S. Finco strategy,” Sergio Marchionne said in a statement.
“FCA will have adequate capital to fund the equity needed and expects to have the credit rating to make the Finco funding competitive.”
It's not yet clear whether Fiat Chrysler would acquire an existing financial services business or create an entirely new one. The decent choice would be of course buying into Chrysler Capital, and the carmaker says initial talks with the entities owning it have already begun.
Overall, Marchionne's statements on Friday were powerful enough to make FCA shares fall by 4.5 percent in Milan.
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