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Fiat changes name, disappoints with profits

Italian car giant Fiat announced on Wednesday it was changing its name after completing the purchase of US automaker Chrysler to "Fiat Chrysler Automobiles", but posted disappointing 2013 results.

MILAN: Italian car giant Fiat announced on Wednesday it was changing its name after completing the purchase of US automaker Chrysler to "Fiat Chrysler Automobiles (FCA)", but posted disappointing 2013 results.

Fiat chairman John Elkann said the name change heralded "a new chapter".

"A journey that started over a decade ago, as Fiat sought to ensure its place in an increasingly complex marketplace, has brought together two organisations each with a great history in the automotive industry and different but complementary geographic strengths," he said.

"FCA allows us to face the future with a renewed sense of purpose and vigour," he added.

The group statement said: "In order to establish a true peer to the major global automotive groups, in both scale and capital market appeal, the Board has decided to establish Fiat Chrysler Automobiles N.V., organised in the Netherlands, as the parent company of the Group."

The company said shares would be listed in New York and Milan and Fiat shareholders would receive one FCA common share for each Fiat share they hold. FCA will be resident in the UK for tax purposes.

"Today is one of the most important days in my career at Fiat and Chrysler," Fiat CEO Sergio Marchionne was quoted as saying.

"We have worked tenaciously and single-mindedly to transform differences into strengths and break down barriers of nationalistic or cultural resistance," he said.

The FCA will "continue with the same mission, including manufacturing plants in Italy and elsewhere around the globe, with no impact on headcount", said the group, calming concerns that the car maker would abandon Italy.

The group said it expected to present a long-term business plan at the start of May 2014.

Fiat completed the purchase of Chrysler this month in a US$4.35-billion (3.21 billion euros) transaction after a five-year merger, to create the world's seventh biggest auto group.

However, earlier on Wednesday Fiat reported 2013 results which were below analysts expectations and said it would be waiving dividends, causing shares in the group to plummet.

The carmaker reported a trading profit of 931 million euros (US$1.27 billion) for the fourth quarter of 2013, less than the 1.5 billion euros forecast by analysts.

It also cut its 2014 forecast more than expected, to between 3.6 to 4.0 billion euros -- down from a previous estimate of up to 5.2 billion euros.

Subsequently, the board of directors "has decided not to recommend a dividend payment on Fiat shares, given the company's desire to maintain a balanced level of liquidity following the acquisition of the minority stake in Chrysler Group LLC," the company said in a statement.

Shares were down 5.77 per cent on the FTSE Mib market at 1500 GMT.

Fiat blamed in part the profit drop on conditions in Latin America, which it said was due primarily to "input cost inflation, unfavourable production mix and lower result in Venezuela".

Fiat's results have also been hit by the plunge in sales on its domestic market, and have been propped up by Chrysler's return following a bankruptcy procedure.

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