MILAN -- Fiat Chrysler Automobiles' slumping Maserati business is a headache for new CEO Mike Manley after the brand’s profitability and vehicle sales went into a steep slide. Manley has blamed the luxury unit’s problems partly on mistakes that saw it managed "almost as if it were a mass-market brand."
Maserati's earnings plunged 87 percent to 15 million euros in the third quarter. The brand's global vehicle shipments fell 19 percent to 8,800 while its profit margin dropped to just 2.4 percent from 13.8 percent in the same quarter last year. The brand’s targets are for 14 percent margin this year and 15 percent in 2022.
FCA's decision to bundle Maserati with its Alfa Romeo marque under a single leader was a mistake, Manley told analysts on the automaker's third-quarter earnings call on Oct 30. "With hindsight, when we put Maserati and Alfa together, it did two things. Firstly, it reduced the focus on Maserati the brand. Secondly, Maserati was treated for a period of time almost as if it were a mass-market brand, which it isn't and shouldn't be treated that way," Manley said.
FCA last month named its chief technology officer Harald Wester, who previously led the brand from 2008 until 2016, to head Maserati. Wester “has a good understanding of the luxury market and a deep understanding of Maserati as a brand,” Manley said.
One of Wester’s first moves has been to recruit a seasoned executive in ultraluxury sales and marketing from Ferrari, Jean-Philippe Leloup. He was previously head of Ferrari's business operations in central and eastern Europe and will lead a new organization called Maserati Commercial, Wester said in a news release on Monday.
Maserati has also been hit by the recent slowdown in the Chinese market and new WLTP emissions standards in Europe hit the brand.
Former FCA CEO Sergio Marchionne’s 2014-18 business plan for Maserati envisioned full-year vehicle sales of 75,000 units in 2018. On June 1, the target was revised downward to 50,000. With vehicle sales down 26 percent to 26,400 in the first nine month, even the lower full-year goal is likely to missed by a wide margin. Maserati would have to ship 24,000 cars in the October-December period, one-third more than the record 18,237 shipped in the fourth quarter of 2016.
Max Warburton, an analyst with Bernstein, wrote in a note to investors that "Maserati looks broken — a 2.4 percent margin in Q3 is better than Q2. The business — and its volume, pricing and distribution plans — surely need a rethink."
Felipe Munoz, an analyst with JATO Dynamics market researchers, said Maserati's main problem is the lack of new products and the lack of a regular cadence of launches.
Maserati's first SUV, the Levante, is now two years old and competes in the large premium SUV sector, the only SUV segment that is not growing, he said. Its sales are not helped by the fact that rivals such as the Porsche Cayenne, BMW X5 and Mercedes GLE have all been renewed, Munoz said.