Fiat SpA on Thursday said its first-quarter net profit soared tenfold to 379 million euros ($500 million) thanks to its U.S. partner Chrysler, without which it would be in the red.
Turin, Italy-based Fiat (IW 1000: 81) banked 37 million euros in profit in the first quarter last year -- before snapping up a majority stake in Chrysler in a move that has more than offset poor Fiat results in a sluggish European market.
Chrysler, which fell under Fiat's operational command in June 2009 when it emerged from a government-supported bankruptcy, reported its own fourfold leap in first-quarter profit on Thursday to $473 million.
Without the U.S. carmaker, Fiat would have suffered a net loss of 272 million euros on the first three months of the year, the group said in a statement.
"Strong performance in Chrysler offset the effects of lower volumes for Fiat in Europe," the automaker said, though the Italian company performed well in North Africa, Latin America and the Asia Pacific region.
"Revenues and profitability reflect generally positive trading conditions across regions with the exception of EMEA (Europe, Middle East, Africa), where conditions were in further decline," Fiat said.
In Europe, "trading conditions continued to remain weak for both passenger cars and light commercial vehicles, particularly in Italy, with Fiat production and deliveries being additionally affected by protracted car hauler strikes."
Fiat confirmed its targets for 2012 despite the difficulties in Europe.
Fiat forecast full-year net profit of between 1.2 billion and 1.5 billion euros, a trading profit of between 2.8 and 4.5 billion euros and sales of more than 77 billion euros.
Earlier this month, Fiat CEO Sergio Marchionne said the company will start production in China in the coming months and in Russia in 2013 -- and could increase its stake in Chrysler to 61.8% this year.
The partnership with Chrysler has allowed the Italian automaker to face volatility in the market more serenely and enables the two companies together to search for new markets outside crisis-hit Europe, he said.
Fiat and Chrysler, whose full merger is expected by 2015, aim to become a unified auto giant with joint production of 6 million vehicles a year by 2014.
The financial crisis sweeping Europe also has affected the results of French automakers PSA Peugeot Citroen (IW 1000: 43) and Renault SA (IW 1000: 73), both of which published a drop in sales for the first quarter as business in European markets worsens.
PSA Peugeot Citroen posted a 7% drop in sales in the first quarter, while its rival Renault saw sales down 8.6% on the same period in 2011.
Both carmakers also were hit hard by the end of government cash-for-clunker schemes that saved the European auto market after the financial crisis of 2008.
Copyright Agence France-Presse, 2012