Yahoo Finance Fiat Chrysler (FCAU) to Shift Plant, Invest $1B in US Hub
Per Reuters, Fiat Chrysler Automobiles N.V. FCAU reported that it will shift the manufacturing activity of its Ram heavy-duty pickup trucks to Michigan from its existing production facility in Mexico by 2020. Additionally, it will invest $1 billion in its future plant at Warren, MI, located near Detroit, which in turn, is likely to generate 2,500 jobs at the hub.
Notably, a year ago, Fiat Chrysler had announced this probable shifting of its heavy-duty pickup production to the United States, influenced by the U.S. tax and trade policies. Further, the U.S. government’s high chances of exit from the North American Free Trade Agreement (NAFTA) in the near future would compel all automakers to pay a duty of 25% for pickup trucks manufactured in Mexico and sold across the United States.
Almost 90% of the company’s Ram heavy-duty pickups is built at Mexico’s Saltillo plant and sold in the United States or Canada. Moreover, in 2017, Fiat Chrysler had scaled up its vehicle production by 39% to 639,000 units. This makes the company the third largest manufacturer of vehicles in Mexico, followed by Nissan Motor Co. and General Motors Company, respectively.
Fiat Chrysler Automobiles N.V. Price and Consensus
Fiat Chrysler Automobiles N.V. price-consensus-chart | Fiat Chrysler Automobiles N.V. Quote
By 2019, Fiat Chrysler expects an additional growth in Mexico. However, post relocation of its pickup truck production in the United States by 2020, the company has plans to repurpose its Mexico facilities to manufacture future commercial vehicles for global market sales.
Price Performance
Shares of Fiat Chrysler have surged 32.3% in the last three months, outperforming the 14.4% rally of the industry it belongs to.
Zacks Rank & Other Key Picks
Fiat Chrysler has a Zacks Rank #2 (Buy). A few other top-ranked stocks in the auto space are Ford Motor Company F, Lear Corporation LEA and Volkswagen AG VLKAY, all carrying a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Ford has an expected long-term growth rate of 10.7%. In the last three months, shares of the company have climbed 10.5%.
Lear has an expected long-term growth rate of 7.1%. In the last three months, shares of the company have gained 9%.
Volkswagen has an expected long-term growth rate of 12.9%. Shares of the company have jumped 25.6% in the last three months.
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