TO: Deb Sammy
FROM: Surya Narayanan Thangam, Investment Specialist
DATE: September 14, 2013
SUBJECT: Investments in Italian Automobile Industry
As per your request, I have focused my research on the Automobile industry in Italy for a long-term plan. For automobile, Europe and South America are on the same boat with 34% growth each (“Pirelli Sales By Region”, 2013). Even though the Italian economy is in bad shape right now, it will have a slow drag in 2013 and its expected to rise back in 2014 (Country Report: Italy, 2013). This will suit our requirement of a long-term investment, even its not really advisable to get into it if you are planning to gain it back before 2017. All of my analysis on the Italian market shows that the market is becoming really strong in 2017, so if you are willing to immerge in this till then, this would prove to be a fruitful option (Coscarelli, 2013). Even after the economic downfall in 2007, there is a promising uplift to be far seen starting from the end of this year (Coscarelli, 2013). The SWOT analysis on the Italian Autos Industry shows the following key points about Fiat ("ITALY AUTOS REPORT”, 2013): Fiat has an established presence and dominates local production. An increase in Fiat's alliances with strong foreign carmakers is extending the company's global reach and should help its finances. The resurgence of new model investment and sales has succeeded in reinvigorating the fortunes of Fiat and its Italian suppliers. Labor agreements reached between Fiat and the workers' union will help secure future of autos production in the country, at least temporarily.
Hence, the best automobile company to invest in the current economy would be Fiat in Italy. Fiat holds 71.1% market share in the Italian automobile industry (“Italy Passenger Car Sales By Brand”, 2013) and 63.7% in the exports (Passenger Car Exports By Brand, 2013). Also the most profitable sector of fiat’s sectors is the sale of diesel vehicles. It constitutes...
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