TURIN -- Pininfarina swung to a sizeable operating loss in the first quarter as it phased out the production of old models and invested heavily in new ones.
The Italian coachbuilder expects improved results next year, after the changeover.
In the first quarter, business volume decreased 31.2 percent to E108.1 million from E157.1 million a year earlier. First-quarter earnings before interest and taxes swung to a E4.4 million loss from a E3.3 million profit a year earlier.
"This decline in business volume was widely expected and was caused by the renewal of our portfolio of production orders," Group CEO Andrea Pininfarina said.
In November 2004, Pininfarina stopped making the Alfa Romeo GTV coupe and Spider and the Peugeot 406 coupe. It ceased production of the Mitsubishi Pajero Pinin in April and will stop the Ford StreetKa in July.
Models phased out this year will account for 7,000 units in 2005, while a new Alfa Brera and a Volvo convertible will add another 7,000 units.
Pininfarina's expected output of 14,000 cars this year marks a sharp decline from the 2004 total of 22,869 and an even more pronounced drop from 2003, when it built 43,286 units.
As a result, Pininfarina expects 2005 production revenue to fall about 10 percent from last year's E601.1 million. It also expects a full-year operating loss.
Pininfarina has embarked on a three-year E130 million investment for the launch of five new vehicles. It will start building the Alfa Brera coupe this summer. The Volvo convertible follows in the fourth quarter.
In the first quarter of 2006, it will launch a new Alfa Romeo Spider and the Mitsubishi Colt convertible.
New 2006 models
Next summer, Pininfarina will start building the Ford Focus convertible.
In 2006, Pininfarina plans to build 55,000 units and return to profitability with revenue of more than E1 billion. It expects to build 70,000 units in 2007.
While Pininfarina is moving toward recovery, fellow Italian coachbuilder Bertone is still seeking new contracts to replace its only production contract, the Opel Astra convertible set to cease in early 2006.
In 2004, Bertone built 13,395 Opels, down 39.4 percent from 2003.
