Fiat Chrysler Automobiles NV (NYSE:FCAU) CEO Sergio Marchionne has announced a big investment drive aimed at boosting the production of electric cars. In his announcement, Marchionne said that despite the new plan for electric cars, traditional engines will still dominate its production portfolio.
$10 billion investment plan
During the occasion to launch the company’s strategic plan, Marchionne indicated that the company will invest a total of $10.5 billion in a bid to keep hold on the market for fully electric vehicles and gas-electric hybrids. This, he said, will be undertaken without affecting in the main market which requires internal combustion engines. The strategic plan launched will run up to 2022, long after Marchionne has exited the company and his role as CEO.
Marchionne has a strong performance track record
Marchionne is known for lifting Chrysler out of bankruptcy in 2009. At the time, he was the CEO of Fiat. The automaker was in a critical position that many doubted it could be saved. At time, General Motors Company (NYSE: GM), the company’s main rival was also in financial turmoil and was being bailed out by the Obama administration. The government was also deliberating whether to save Chrysler or let it die. In the end, the government offered to bail out Chrysler also so as to mitigate the effects of its downfall to the economy. It was argued that in the event of its fall, it would have grievous effects to its suppliers.
In a statement to financial analysts, Marchionne said that the industry as well as the entire society are having a big challenge in trying to reduce dependence on oil. He spoke when he unveiled the business strategic plan, which would also act as his final legacy to the company which he established following the merger of Fiat and Chrysler. According to Marchionne, there is no magic formula or single solution to reducing the overdependence on oil. He added that the problem can only be approached using the right measures that are aimed at striking a balance between cost, consumption levels and efficiency.
THE MORNING REPORT
Start your workday the right way with the news that matters most.
The presentation, which went on for a whole day, mainly revolved around development of new brands that have huge revenue potentials. These are Alfa Romeo, premium brands Maserati, Ram trucks and Jeep SUVs.