There was a big sell off of Fiat Chrysler’s shares on Wednesday as analysts gave the thumbs down to its new business plan.
Trying to close the gap with its bigger rivals, Fiat has announced it intends to invest 48 billion euros in new factories and models and expand in Latin America and China.
Chief executive Sergio Marchionne said they will focus on the upscale – and more profitable – Alfa Romeo, Jeep and Maserati brands.
Marchionne, who promised to remain in charge of Fiat Chrysler through to 2018, said his plan represented a new start for the combined group, which has been going from strength to strength in North America but has struggled in Europe during an economic crisis.
The aim is to almost wipe out the company’s debt by 2018 with a 60 percent sales boost and a five-fold net profit increase.
Car industry analysts called the sales targets highly ambitious.
The shares had risen 44 percent since Italy’s Fiat announced on January 1 it would take full control of Chrysler to create the world’s seventh largest carmaker.
They ended the day down 11.7 percent in Milan.