Fiat’s US unit Chrysler, which generates most of the group’s net profit, cut its profit forecast as it struggled to fill orders due to parts shortages, hitting the Italian automaker’s shares.
Chrysler’s booming US sales have compensated for Fiat’s losses in Europe, where demand hit a 20-year low in the first half of the year.
Fiat-Chrysler chief executive Sergio Marchionne said most of Chrysler’s plants had experienced parts shortages as it tried to keep up with strong demand. That resulted in lost production.
Its competitors General Motors and Ford both trounced expectations in their earnings releases last week. Automotive supply chain glitches have proven a headache for the much smaller and less diversified Chrysler, which is overly dependent on Jeep and truck models to make money.
“We’re trying to reduce the recurrence of these events, but they keep on happening at a sufficient rate that we had to look at the forecast and admit that the overall number that we had set for the year may be at risk,” Marchionne said on a conference call. “That’s why we’ve prudently taken it to the low end of the range.”
Chrysler trimmed its full-year net profit forecast to a range of between US$1.7 billion and US$2.2 billion (HK$13.2 billion to HK$17.1 billion) from a previous estimate of US$2.2 billion. It earned US$1.7 billion last year.
