Earlier this week, we provided news that Fiat was increasing their stake in the Chrysler Auto Group well past 50%. However, despite Fiat’s prominence over Chrysler, Chrysler’s out standing sales in the US market and growth in Brazil has allowed the American auto manufacturer to offset Fiat’s less successful sales in Europe.
“Chrysler will generate a lot more cashflow and growth than Fiat very soon,” said Bruno Lapierre, an analyst with brokerage Cheuvreux.
This is due to the fact that Fiat is known for its relatively low-cost automobiles, which means smaller profit margins, whereas Chrysler has larger profit margins by earning more money per unit from sedans and SUVs.
Chrysler’s sales rose 21% in the first half of 2011 while Fiat’s sales throughout Europe dropped by 12.7%.
– By: Chris Chin