The plan envisions expanding model offerings and production capacity at Alfa Romeo, Maserati and Jeep to make them into nameplates that can attract customers from Beijing to Berlin to Boston.
At 9:25 CET on Wednesday, Fiat Chrysler shares, which had risen 44 percent since Fiat announced on Jan. 1 it would take full control of Chrysler, were down 8 percent at 7.78 euros.
"While extremely favorable market conditions, which we doubt, and flawless execution could allow Fiat to reach some of its operating targets, one figure that we believe even the bulls will have trouble justifying is the 2016-18 deleveraging," Exane BNP Paribas analysts said of the target to almost erase debt.
George Galliers, car analyst at International Strategy & Investment, said it was difficult to process the 10-hours of presentations Fiat Chrysler made to investors. "Yesterday was a very long day for us as Fiat took investors through another five-year plan in excruciating detail. At this very early stage it is a struggle to see how all the elements presented can add up to a coherent whole," he said.
The new business plan is a critical step in Marchionne's decade-long effort to turn Fiat into a carmaker big enough to challenge General Motors Co., Volkswagen Group and Toyota Motor Corp., following the completion of the purchase of the rest of Chrysler Group in January. VW, the world's second-biggest carmaker, is targeting sales of more than 10 million vehicles in 2014, while Toyota, the global sales leader, is forecasting deliveries of 10.32 million.
Reaching 7 million should move Fiat Chrysler up at least one rung on the global sales rankings, Marchionne said.
Rebuilding Alfa
Fiat's expansion is focusing on rebuilding Alfa Romeo, with plans to invest 5 billion euros through 2018 to bring out eight new vehicles and increase deliveries more than fivefold. The marque has the potential to help drive profit for the group, in the same way that Audi does for VW, by commanding higher prices than mass- market models with the Chrysler, Dodge or Fiat badges.
Alfa will develop new rear-wheel-drive and four-wheel-drive vehicles and aims to boost sales to 400,000 in 2018 from 74,000 last year. The brand will continue to build all its models in Italy and will begin rolling out the new vehicles at the end of 2015 when a new mid-size car comes to market. Alfa will ditch the current Mito compact as part of the overhaul.
Maserati will increase annual deliveries more than fourfold by 2018 to 75,000 and expand its model offerings to six, including adding the Alfieri sports car, shown this past March in Geneva. The brand aims to more than triple revenue in the next five years to more than 6 billion euros. Maserati will invest more than 2 billion euros to push growth.
Jeep aims to more than double deliveries by 2018 to 1.9 million sport-utility vehicles, with the number of dealers worldwide rising 28 percent to 6,023. The brand, which last month received approval to begin production in China, plans to eventually produce SUVs at 10 factories in six countries.
Marchionne is also planning to boost sales at the group's mass-market brands, with the Fiat nameplate's annual deliveries set to rise 27 percent to 1.9 million in 2018 and the Chrysler badge more than doubling to 800,000.
Marchionne said he will run Fiat and Chrysler until the end of the plan in 2018, two years longer than he said he would stay in January.
Funding needs
The need for the reorganization was underscored after Fiat reported a 1.4 percent decline in first-quarter earnings on Tuesday. Trading profit fell to 622 million euros.
Fiat will need to come up with the money for the investments against a backdrop of mounting debt, which the automaker forecasts will rise to 10.3 billion euros by the end of the year after the acquisition of Chrysler. Available liquidity at the end of 2013 was 22.7 billion euros.
The carmaker said that it's keeping open its financing options, while ruling out a capital increase before 2018. Marchionne said Fiat doesn't plan any "divestiture" to finance the plan, ruling out the sale of any unit.
