Fiat’s Third Quarter results are now in, and for Iveco, things have obviously been rather good over the last 13 weeks. The truck maker saw its trading profits leap from €87 million to €156 million during Q3. Revenues were up 14.4 per cent to €2.1 billion on deliveries of 40,300 units during the period (including 4,700 units with buy-back) up 7.2 per cent from the same period in 2005.
As evidenced by the results posted by DaimlerChrysler Volvo
and Paccar, every OEM has had a good year so far. But what makes Fiat's – or Iveco’s – results more noteworthy is the lack of exposure to the US market. There seems to be ready acceptance that the US Class 8 market is going to come crashing down next year, and Iveco is in the happy position of not being involved.
But for Iveco, the future is less about numbers and more about owners. The market rumours pertaining to a divestment of the truck maker away from Fiat are not going away, and CEO Sergio Marchionne is on record as wanting to bump up car sales to three
million a year. Moreover, if the MAN-Scania deal does go the distance, then Iveco – along with DAF – becomes one of two small players in a European market dominated by three leviathans with a resolutely global focus. That’s a not particularly happy – and potentially a very expensive – place to be. We think that this means that either Iveco or CNH – Fiat’s agricultural / construction machinery division – are going to have to go. CNH has been restructuring hard – plant closures have already been announced in the US – and this could be indicative of a bit of window dressing. But, conversely, Iveco is sitting rather nicely at the moment in terms of range, profitability and exposure. But, according to Sanford Bernstein analyst Stephen Cheetham there is still an underlying malaise at Fiat, which, if a credible concern, points to further restructuring down the line.
If Marchionne is going to go for broke with the car side, will he want the truck side alongside? Finding a buyer for the newly revitalized Iveco would not – we think – be too much of a problem. More to the point, any announcement that stems from the investor meeting due in November will be made right after the results of the US Mid Terms, elections likley to focus global attention on Washington and geopolitics as opposed to Turin and vehicle politics. Rather a happy coincidence if a startling announcement needs to be made.
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