TURIN -- Fiat Group Automobiles S.p.A blamed a steep decline in its trading profit on a slump in the automaker's light commercial vehicle sales.
Fiat CEO Sergio Marchionne said selling more passenger cars and fewer LCVs last year was the main reason for a 456 million euro ($641 million) price-mix-related decline in the auto unit's trading profit, which is operating margin before extraordinary items.
Overall, the Fiat auto unit's trading profit fell 32 percent to 470 million euros from 691 million euros in 2008. The decline came despite achieving a 230 million euro saving in purchasing costs.
Fiat's LCV unit, Fiat Professional, suffered a 102,000-unit decline in sales last year. Even a 100,000-unit increase in Fiat's passenger-car sales could not make up for the loss.
“Replacing 100,000 LCV sales with 100,000 passenger-car sales does not mean a similar level of profitability,” Marchionne said in a call with financial analysts on January 25.
LCVs such as the Fiat Doblo are among Europe's most profitable vehicles with margins of about 10 percent, according to Sanford Bernstein automotive sector analyst Max Warburton.
Fiat Professional's 2009 sales declined 25.1 percent to 307,000 units from 409,000 units in 2008. Fiat said overall LCV sales in western Europe last year declined 27.4 percent to 1.42 million units from 1.95 million in 2008.
Fiat reported that its car and LCV sales fell just 0.1 percent to 2,151,000 units. Combined sales of the Fiat, Alfa and Lancia passenger cars rose to 1,844,000 units from 1,744,000 in 2008. The Fiat brand alone accounted for 91,000 units of the 100,000-unit growth in passenger-car sales.