Fiat profit driven by Chrysler as auto sales plunge in Europe

MILAN (Bloomberg) -- Profit at Italian carmaker Fiat more than tripled in the first quarter as Chrysler Group gained market share on demand for its 200 and 300 sedans and helped offset falling revenues from mass-market car sales in Europe.

Earnings before interest, taxes and one-time items, which Fiat calls trading profit, surged to 866 million euros ($1.14 billion) from 251 million euros a year earlier, the carmaker said in a statement today. Sales more than doubled to 20.2 billion euros.

Fiat-Chrysler CEO Sergio Marchionne is counting on Chrysler, which was consolidated into Fiat's results in June 2011, to propel profit for the group.

The debt crisis in Europe, where Fiat's volume brands lost 500 million euros last year, caused Fiat Group's deliveries in the 27-member EU states plus Switzerland, Norway and Iceland to tumble 20 percent in the first quarter, from a year earlier, to 217,434 vehicles, industry association ACEA said this month.

Without Chrysler, the carmaker's results for the quarter would have been break-even, Fiat said in Thursday's statement.

"Chrysler performed strongly and represented again the bulk of Fiat's overall trading profit, as losses in the European market continued," Jochen Gehrke, an equity analyst at Deutsche Bank AG in Frankfurt, said prior to the earnings release.

Fiat currently owns 58.5 percent of Chrysler, and Marchionne, 59, plans to merge the two manufacturers to boost sales to more than 100 billion euros by 2014.

Fiat, which shut down a factory in Sicily at the end of last year, froze new investment in Europe and postponed the introduction of new models because the company doesn't anticipate a demand recovery until at least next year.

Marchionne sees a "painful" restructuring needed for European carmakers, including plant closures and job cuts, to reduce an estimate 20 percent excess of capacity in the region, he said last month.

Automotive News Europe contributed to this report