"We will make money in 2006. It is that simple," the Fiat CEO, Sergio Marchionne, told Reuters yesterday in Detroit during a visit he made to the North American International Auto Show. His upbeat assessment of the financial situation within the Auto Division firmed up previous comments that he had made to the effect that he was optimistic that profits were in the pipeline.

Since he took over as CEO of the Fiat Group Marchionne fired the then Auto Division CEO Herbert Demel and installed himself in firm control of the Group's most troublesome division, getting to grips with the losses at a pace that has completely surprised the stock markets which have rewarded the company's share price accordingly. After posting a loss of 822 million euros in 2004, the Auto Division's losses were trimmed to 302 million euros for January-September 2005, with break-even or a trading profit forecast for the final three months. Asked by Reuters regarding the 2005 full-year target, Marchionne replied: "It is confirmed. Confirmed or better. We are closing the numbers now. I have no indications that we will not make it."

Marchionne confirmed that the new Fiat Grande Punto, the most important new model introduction from the Auto Division and the one they are pinning their revival hopes on, is set to achieve its 2006 sales target of 360,000. The Grande Punto was launched in Italy last September and has been rapidly rolled out across the main European markets in the intervening period.
 

"The 360 will be done," Reuters quoted him as saying in reference to the 2006 target figure, while adding that he realised that Fiat still had its work cut out for it to make a success of the Grande Punto Punto, their best-selling model. "We are happy that we have made this progress so far. It is an asset that needs to be worked because the B-segment is relatively competitive and we need to continue to work on that car," he continued. "I think it has got all the makings of a great car."

Underlying the importance of a return to the black for the Auto Division, Marchionne told Reuters: "It is important for the group because it is the remaining part of reshaping the house. We have started working pretty aggressively on the other parts of the portfolio. I was in Chicago yesterday and we have begun some pretty extensive reshaping of the CNH activities." Marchionne also touched on the Group's Iveco division, which builds light commercials vehicles, heavy trucks and buses, emphasising that its future was an integral part of his strategic planning. "We are trying to turn this into a powerhouse but it takes time. There was some lethargy for a long period of time but we are trying to shake it up and move on."