On Air Now

Upcoming Shows

Program Schedule »

Tune in to Listen

650 AM Hibbing, Minnesota

Weather

Current Conditions(Hibbing,MN 55746)

More Weather »
25° Feels Like: 15°
Wind: N 10 mph Past 24 hrs - Precip: 0”
Current Radar for Zip

Tonight

Few Snow Showers 19°

Tomorrow

Cloudy 39°

Fri Night

Partly Cloudy 19°

Exclusive: Fiat likely to miss Brazil sales targets - sources

A Fiat logo is seen on a car during a press preview at the 2013 New York International Auto Show in New York, March 28, 2013. REUTERS/Mike S
A Fiat logo is seen on a car during a press preview at the 2013 New York International Auto Show in New York, March 28, 2013. REUTERS/Mike S

By Jennifer Clark and Alberto Alerigi

MILAN/SAO PAOLO (Reuters) - Italian carmaker Fiat is likely to miss sales targets in Brazil this year and next, according to a person familiar with the matter and a document seen by Reuters, increasing the chance of a 2013 profit warning already predicted by some analysts.

Fiat now expects to sell 950,000 cars in Brazil and Argentina this year, according to the internal document, 5 percent short of its previous 1 million goal.

Brazilian sales are also likely to miss targets next year, according a person familiar with Fiat's projections, as the market grows more slowly than the carmaker had counted on.

"The figures are too optimistic for Brazil," the person said, while adding that Fiat's budgets for 2014 and beyond have not been finalized.

Fiat declined to comment.

Latin American sales have become increasingly important to Fiat as its European deliveries have fallen further than the region's six-year market slump.

It now sells almost as many cars in Brazil and Argentina as it does in its home region, including Russia and Turkey, where it expects to move about 1.1 million cars this year.

Revenue from Brazil, the world's fourth largest car market that Fiat has led for 12 consecutive years, makes up about a quarter of Fiat's trading profit, offsetting European losses.

But a drop in the Brazilian real, tougher competition and a slowing market are combining to put Fiat's 2013 profit targets at risk, analysts say.

Brazil's automotive association Anfavea is forecasting 5 percent growth in vehicle production next year, down from 12 percent in 2012.

That's less than the 6 percent expansion to 3.54 million cars on which Fiat has based its guidance, which assumes 2 percent sales growth for the company.

Some analysts are already bracing for the company to cut its 2013 goals when it releases results on October 30, according to a consensus compiled by the carmaker.

"We do not expect that Fiat will reach its full-year 2013 guidance of a 1 billion euro trading profit contribution from Latin America," said Commerzbank in a note on October 22, adding that the company's overall earnings target was also in doubt.

Fiat said on July 30 it was targeting a 4 billion-4.5 billion euro ($5.5 billion-$6.2 billion) trading profit this year on revenue of 88 billlion-92 billion. Net profit was expected to come in between 1.2 billion and 1.5 billion euros, it said at the time.

Analysts now see a group trading profit of 3.82 billion euros for 2013, according to the consensus.

(Editing by Laurence Frost and Mark Potter)

Comments