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FCA has announced the financial results for the first half of 2016 and while global vehicle shipments are down due to a slump of sorts in the Asia-Pacific region, Q2 was still profitable for the company.

During the second quarter of 2016, FCA shipped 1.175 million vehicles, down 1% from the 1.191 million vehicles sold during the same period in 2015. Shipments were down 2% in the North American market (666k in 2016, 677k in 2015) and 19% in Latin America (112k in 2016, 138k in 2015) , but the biggest impact came from the Asia-Pacific region, where a transition to local Jeep production led to a 50% decrease in shipments.

This year over year decrease in shipments led to a similar decrease in net revenues, also down 2% from Q2 2015. FCA posted net revenues in April, May and June of 27.9 billion Euros ($30.6 billion USD), down from 28.5 billion Euros ($31.3 billion USD) during the same three months last year. While the revenues were down in Asia-Pacifica and Latin America, revenue was up 2% in North America and 5% in Europe, so the two biggest markets for FCA helped to cushion the blow from the Chinese and Australian markets. Net revenue for the North American market rose to 17.4 billion Euros ($19.1 billion USD) from 17.2 billion ($18.9 billion USD) in 2015 while the European operations climbed from 5.5 billion Euros to 5.8 billion.

q2 financial table

Most importantly, net profit for FCA 2016 Q2 was up 25% from the year before, with 321 million Euros ($353 million USD) this year and 257 million Euros ($282 million USD) last year. On the year, FCA has posted first half net profit of 799 million Euros ($879 million USD), up 181% from the profit of 284 million during the first half of 2015. This net profit is lower than it could have been if not for the negative impact of the Takata airbag headache.

North American Operations
If we focus strictly on the North American market (USA, Mexico, Canada), the second quarter of 2016 looks a little better than the overall global corporate picture. While shipments were down 2%, sales were up 2%, with 698,000 vehicles sold this year to 686,000 last year. Dealer inventory in the US based in days of supply climbed from 74 in Q2 2015 to 75 in Q2 2016 and while this year over year increase is “bad”, it should be noted that the dealer inventory during Q1 2016 was 83 days – so the company has improved in that metric as the year has gone on.

Net revenue in North America climbed by 2% - from $18.9 billion USD in 2015 to $19.2 billion USD in 2016.

Market share in North America climbed from 12.5% from 12.4%, with a 12.7% market share in the US and a market share of 15.2% in Canada. FCA leads in market share in Canada over all automakers.

q2 2016 market share

In short, FCA shipped fewer cars to dealerships around the world and that led to decreased revenue, but improved sales in North America and Europe combined with lower corporate costs – even with the impact of the Takata airbag recall – has led to a growth in net profit.

Things could be better for FCA, but the company is doing well in its largest markets (North America, Europe) while making strategic moves to improve sales in emerging markets (China).