Fiat Chrysler has a huge looming problem because it's selling so many trucks
The company is struggling to match increasing emissions standards and may not have the capital to dig itself out, Bloomberg's John Lippert and Jeff Plungis reported:
For the fourth consecutive year, the maker of Ram pickups and Jeep sport utility vehicles finished dead last in a 2014 Environmental Protection Agency ranking of carbon-dioxide emissions among big auto manufacturers. And the agency plans to accelerate its CO2 targets sharply beginning next year. To comply, FCA must improve faster than bigger and richer rivals who also are straining to cut emissions. Failing that, it might be forced to stop building some of the light-duty trucks Bloomberg Intelligence analyst Kevin Tynan says deliver 90 percent of its profit.
"Light-duty trucks," which include FCA's Jeep SUVs, Chrysler minivans, and Ram pickup trucks, are the largest selling and most profitable sectors in the entire automotive industry, and have long been the bread-and-butter of American brands.
Bloomberg reported that light-duty trucks comprise 78% of FCA's American sales volume, a proportion that is about 8% lower for rivals Ford and GM.
Ceasing production would probably not be an option for FCA, even as a short-term solution, while the money required to catch up to other car makers' years of research and development may simply be out of reach.
The only other option may be yet another merger for the conglomerate (Fiat and Chrysler were conjoined in 2009), which makes for awkward timing less than a year after CEO Sergio Marchionne unsuccessfully tried to pair up with General Motors.
But FCA's impending emissions woes would certainly help explain why Marchionne pushed so aggressively to make the seemingly hopeless deal work.
NOW WATCH: The best car of the year - the Volvo XC90
- Mayhem Studios announces a new battle royale game with locations, gangs and other elements depicting India
- Technique used to track ants’ movement might soon help scientists in measuring snow depth from space
- Three senior Twitter employees quit amid ongoing Musk-Agrawal internet war
- Indian CEOs could get the best salary hike in 5 years; and they already make ₹7 crore/yr on an average
- Vedantu follows Unacademy’s footsteps — fires over 600 people in May
- Delhivery IPO
- Reliance Retail
- Indian Rupee
- Reliance JIO
- Best Deal on Smartphones
- Unacademy offline Classes
- Hubble Space
- 5G Phones Under Rs. 20000
- Disney+hotstar Subscribers
- Reliance Industries
- Venus Pipes Tubes IPO
- Matheesha Pathirana
- Adani Green
- Paradeep Phosphates balance sheet
- Spam Calls in India
- Whatsapp Reaction