PSA, Fiat Chrysler in black despite weaker sales

US-Italian automaker Fiat Chrysler and France’s PSA, now merged in the Stellantis group, managed to post a 2020 profit despite weaker sales during the coronavirus pandemic, company results showed Wednesday.

The two automakers, which completed their merger in January, combine brands such as Peugeot, Citroen, Fiat, Chrysler, Jeep, Alfa Romeo and Maserati.

Fiat Chrysler (FCA) eked out a net profit of just 24 million euros ($29 million) last year, a Stellantis statement said, holding up against multiple virus lockdowns that devastated the economy.

In 2019, Fiat Chrysler reported a net profit of 2.7 billion euros.

For the fourth quarter of 2020, the company said net profit was 1.56 billion euros, down just one percent from the same period a year earlier as the industry picked up after virus restrictions were eased.

Sales however plunged 20 percent to 86.7 billion euros for the year, with volume down 22 percent to 3.43 million vehicles, reflecting the damage caused earlier in the first wave of the pandemic.

PSA meanwhile had a 2020 consolidated net income of 2.0 billion euros, according to Netherlands-based Stellantis.

PSA revenues plunged to 60.7 billion euros, from 74 billion euros in 2019, with volumes slumping nearly 28 percent to 2.5 million vehicles, Stellantis said.

It said that despite the problems caused by Covid-19, both parts of the group had managed to keep prices steady, producing a profit margin of 4.3 percent at FCA and 6.1 percent at PSA.

“FCA and PSA did their homework to create a sound financial foundation for Stellantis,” group boss Carlos Tavares said.

Tavares, who previously headed up PSA, said the firm is fully focused on achieving the cost savings it promised the merger would generate.

The new company is targeting an operating profit margin of between 5.5 and 7.5 percent this year — barring further major lockdowns.

That would require a market rebound of 10 percent in Europe, 8.0 percent in North America, 20 percent in South America and 5.0 percent in China, it added.

Like nearly all its peers, Stellantis aims to raise its offer of electric vehicles — currently 29 models, by 10 this year — which it wants to make more affordable as well.

Tavares pledged Stellantis would “be able to make disruptive decisions when there needs to be”, pledging that its new strategy would be developed from the bottom up by teams made up of staff from both companies.

“This is not about creating a defensive plan … only implementing synergies, it will also be disruptive and offensive,” he said.

Stellantis has nearly 300,000 employees worldwide.

The company’s shares are listed on the NY Stock Exchange and were 1.9-percent lower in afternoon trading.