Fiat Chrysler Automobiles could clear all debts this year if its efficiency-boosting measures continue to have the same effect.
The Italian-American carmaker announced in its first-quarter financial report that it had reduced current debt to €1.3 billion (£1.1bn) (Rs 10,217 crores) while raising its operating profit by 5% to €1.6bn (£1.4bn) (Rs 13,003 crores).
FCA produced 1.2 million cars in the first quarter of 2018 – a 5% increase on the year before. It achieved sales growth in all regions, with the new Jeep Compass and Alfa Romeo Stelvio listed as key contributors to the boost.
The company's capital spending was down by €900m (Rs 7,261 crores) in the first three months due to what it is described as “programme timing”, but experts think it could hint at an upcoming boost of investment.
In the statement, FCA predicted that it could cancel its debt this summer before generating around €4bn in net cash by the end of 2018.
FCA boss Sergio Marchionne, who is standing down next year, has led the group through this recovery period by reducing FCA’s debts to make it more competitive against its US rivals, General Motors and Ford.
Both of those rivals have recently cut their costs. GM sold off its last European brands, Opel and Vauxhall, to the PSA Group in 2017, while Ford has just confirmed that it will be ditching the Fiesta and all saloons from its US line-up.
FCA looks set to ditch diesel from the Alfa Romeo, Fiat, Jeep and Maserati ranges in the coming months in a bid to further boost efficiencies. Although unconfirmed, reports suggest the decision will be announced in June as part of the group’s mid-term plan.