By Agnieszka Flak and Paul Lienert
MILAN/DETROIT (Reuters) – Fiat Chrysler Automobiles <FCAU.N> <FCHA.MI> may seek more supplier partners to help it develop and build self-driving vehicles, Chief Executive Officer Sergio Marchionne said on Wednesday.
The Jeep and Ram brands are strong enough to exist as standalone entities outside FCA, Marchionne also said on a conference call with analysts after the company reported record first-quarter results. But he did not elaborate on whether there were any plans for a spin-off of either, like with Ferrari.
The automaker reported an 11 percent jump in first-quarter operating profit, boosted by strong sales in North America, its most profitable market. Shares jumped about 10 percent on the news.
FCA currently has a partnership with Alphabet Inc’s <GOOGL.O> Waymo self-driving unit. Marchionne said Waymo has an “unbeatable solution” to help build self-driving vehicles, including versions of the Chrysler Pacifica hybrid minivan, but that FCA is looking at additional partners.
“Between now and the next three years, we need to provide viable solutions to take people around,” Marchionne said, citing Waymo’s new test program in Phoenix offering ride sharing in self-driving Pacificas.
But FCA is considering more partners “because banking all of our solutions on one possible outcome is going to be disastrous,” Marchionne said. FCA continues to work with Waymo “in a very intense way,” he said, but “we need to look at optionality in more than one dimension” to build self-driving cars.
FCA is retooling several U.S. plants to produce redesigned versions of the popular Jeep Wrangler and Ram 1500 pickup later this year and early next. Marchionne said the company would continue to produce several versions of the current models for several months in 2018 after the new versions begin production.
New models from premium brands Maserati and Alfa Romeo should help boost FCA’s gross margins. Marchionne said Alfa, long a cash drain on the company, could be profitable in the fourth quarter, while Maserati has returned double-digit margins over the past three quarters. Both brands have launched new luxury utility vehicles in the United States.
Marchionne said FCA hopes to resolve emissions certification issues “in a few weeks” with the U.S. Environmental Protection Agency and the California Air Resources Board.
In the meantime, he said FCA will try to meet future emissions regulations without relying so heavily on diesel engines, but with a combination of gasoline engines and electric motors.
(Reporting by Agnieszka Flak in Milan and Paul Lienert in Detroit; Editing by David Gregorio)