Why Fiat Chrysler Has Extended the Shutdown of Chrysler Plant



Price movement of Fiat Chrysler

Fiat Chrysler Automobiles (FCAU) has a market cap of $9.8 billion. FCAU fell by 0.90% to close at $7.67 per share as of March 7, 2016. The price movements on weekly, monthly, and year-to-date (or YTD) bases were 12.0%, 15.3%, and -45.2%, respectively.

Currently, FCAU is trading 16.5% above its 20-day moving average, 5.1% below its 50-day moving average, and 41.4% below its 200-day moving average.

The Vanguard FTSE All-World ex-US ETF (VEU) invests 0.08% of its holdings in FCAU. The ETF is designed to track a market-cap-weighted index of large-cap and mid-cap global non-US stocks. The YTD price movement of VEU was -2.6% as of March 4, 2016.

The Vanguard Total World Stock ETF (VT) invests 0.03% of its holdings in FCAU. The ETF tracks a market-cap-weighted index of global stocks covering 98% of the domestic and emerging market capitalization.

The market caps of FCAU’s competitors are as follows:

  • Toyota Motor (TM): $180.2 billion
  • Ford Motor (F): $54.1 billion
  • Honda Motor (HMC): $50.5 billion
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Extension of the shutdown of the Chrysler plant

Fiat Chrysler Automobiles will extend the shutdown of its mid-sized Chrysler 200 sedan plant by three weeks, for a total of nine weeks. These additional weeks of shutdown will match supply with demand.

Sales of Fiat Chrysler Automobiles in February 2016

Let’s look now at sales for FCA US.

  • FCA US reported total sales of 183,000 units, a rise of 11.8% from February 2015.
  • Jeep brand reported sales of 68,000 units, a rise of 22.6% from February 2015.
  • Chrysler brand reported sales of 21,000 units, a fall of 26.1% from February 2015.
  • Dodge brand reported sales of 47,000 units, a rise of 12.2% from February 2015.
  • Ram brand reported sales of 43,000 units, a rise of 27.4% from February 2015.
  • Alfa brand reported sales of 49 units, a rise of 4.3% from February 2015.
  • Fiat brand reported sales of 2,993 units, a fall of 9.0% from February 2015.

Next, we’ll look at sales for FCA Canada:

  • FCA Canada reported total sales of 19,000 units, a rise of 0.55% from February 2015.
  • Ram pickup reported sales of 6,784 units, a rise of 20.2% from February 2015.
  • Jeep Cherokee reported sales of 2,322 units, a rise of 57.7% from February 2015.
  • Jeep brand reported sales of 5,724 units, a rise of 33.7% from February 2015.

FCAU’s price-to-earnings and price-to-book value ratios are 18.3x and 0.75x, respectively, as of March 7, 2016.

Now let’s take a look at Polaris Industries’ Taylor-Dunn acquisition.


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