(Updating with Ferrari details)
MARANELLO, Italy (Thomson Financial) - Fiat SpA chairman Luca Cordero di Montezemolo said the economic slowdown is affecting the market for auto sales and that the group will meet its 2007 full-year targets.
Fiat will report its third-quarter results this week, with many analysts expecting the company to raise its full-year forecasts for its operating and net profits.
'The trend of the economy is influencing the market for automobiles,' he said, speaking in a video conference from Rome at the launch of a new model by Fiat unit Ferrari, where he is also chairman.
'Up to now, Fiat has been going better than the market as a whole because of new models and regained competitiveness,' he said.
Fiat's auto operations reflect its market leadership in Italy and Brazil, and its increasing market share in other European countries, he said.
This year Ferrari will have a record result, he said.
Truck unit Iveco and heavy machinery unit CNH Global NV are also producing record results.
The weak dollar is creating 'a problem' because the US is Ferrari's largest market, he said, adding that 'fortunately' Ferrari is also expanding in other countries.
The value of the dollar is more important for Ferrari than for the Fiat group as a whole.
Ferrari commercial director Stefan Mueller said the US market accounts for 28 pct of Ferrari's sales, followed by Germany with 11 pct, the UK with 10 pct, Italy, and France.
Ferrari expects to produce about 6,000 vehicles this year, up from 5,600 in 2006, he said.
Ferrari continues to maintain its US dollar denominated list prices despite the weak dollar, he said.
Another Ferrari official reiterated Ferrari's full-year target for operating margin of 15 pct, up from 12.6 pct last year.
In 2006 Ferrari made an operating profit of 183 mln eur and sales of 1.447 bln.
Montezemolo said Ferrari is present in every country in the world apart from some countries in central Africa and sees particular expansion occurring in the Gulf States.
Ferrari plans to open a merchandising shop in Abu Dhabi in November. Fiat activities will also benefit from 2009 on from the availability of 2 Formula 1 circuits in Bahrain and Abu Dhabi, he said.
In China Ferrari has sold close to 200 units since its recent launch in the country.
Ferrari is reluctant to expand production sharply because this would reduce the exclusivity of the brand, which is 'fundamental' for its success, Montezemolo said.
Yesterday's win of the Formula 1 driver championship supports 'the myth' of Ferrari, in new country markets too, and increases the value of the brand for sponsors, he said.
While retaining its independence as a Fiat unit, Ferrari has over the last 3 years increased transfers of technology to the rest of the Fiat group, he said, adding yesterday's victory will also help the Fiat group.
Speaking about waiting lists for the delivery of Ferrari model, Mueller said this is a phenomenon that has developed only in the last few years.
While this factor is not something to overly exaggerate, it does add to the exclusivity of Ferrari products, he said.
Ferrari officials were speaking at the presentation of the 430 Scuderia model, which costs 208,000 eur in Italy and received many orders before its launch. nigel.tutt@thomson.com nt/dm/wj/sj/slm COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
© 2007 AFX News
