By Agnieszka Flak and Paul Lienert
MILAN/DETROIT (Reuters) - FIAT (F.IT)Chrysler Automobiles (FCA) made its Wall Street debut to great fanfare on Monday, shifting the carmaker's center of gravity away from Italy and capping a decade of canny dealmaking and tough restructuring by CEO Sergio Marchionne.
INVESTOR (INVEB.ES) in the United States and Europe approached the new listing with caution, as analysts expressed reservations about the company's prospects.
FCA shares opened at $9.00 in New York, up from a Friday close for the predecessor company Fiat of $8.70, and rose as high as $9.55 before dropping back to $9.00 by mid afternoon. In Milan, where FCA will keep a secondary listing, shares rose more than 4 percent during the session and closed up 1.2 percent.
Marchionne will ring the closing bell at the New York Stock Exchange on Monday to mark the milestone for the 62-year-old chief executive who revived one of Italy's top companies and helped rescue Chrysler along the way.
The world's seventh-largest auto group had sought the U.S. listing to help establish itself as a leading global player through access to the world's biggest equity market and the cheaper, more reliable source of funding it ultimately offers.
"Our listing today on Wall Street is the culmination of five-and-a-half years' work to achieve an extraordinary union," Marchionne said.
Fiat took management control of bankrupt Chrysler in 2009 and completed its buyout this year. It is now combining all of its businesses under Dutch-registered FCA, which will have a UK financial domicile and small London headquarters, with operations centers in Turin and Detroit.
But Marchionne has picked a difficult moment to woo U.S. investors. Analysts think the U.S. auto industry is nearing a peak, while Europe is struggling to recover from years of decline and growth in China and Latin America has slowed.
"Only those willing to accept the risks of a highly leveraged turnaround situation in a competitive, capital-intensive, highly cyclical industry should consider investing," Richard Hilgert, an analyst at Morningstar, said in a note.
IHS Automotive, a leading industry research firm, said on Monday that it expects FCA will miss Marchionne's aggressive sales targets for the company as a whole and several of its brands, including Jeep and Alfa Romeo.
IHS "does not currently expect this plan to succeed," said analyst Ian Fletcher in a midday note.
The company has projected a 60 percent boost in sales to 7 million vehicles and a fivefold increase in net profit to as much as $6.9 billion by 2018, the year Marchionne has said he would step down as CEO.
IHS is forecasting more modest growth, to 5.1 million sales in 2018.
Other analysts predict FCA will need to raise more capital to pay for Marchionne's $60 billion investment plan. FCA will decide on future financing options this month, though Marchionne insists it does not need a capital increase.
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In comparison with GM and Ford, FCA is seen as less attractive because of its aging model line-up, high debt, weaker margins in North America and small presence in China.
"Ford and GM offer much stronger cash generation and balance sheets, and are thus in a position to return cash to shareholders, while FCA still needs to raise capital," Exane BNP Paribas analyst Stuart Pearson said in a note.
John Casesa, senior managing partner at Guggenheim Securities, said investors would need to weigh the prospects of huge cost savings from integrating Fiat and Chrysler, with the risk that the U.S. auto market will peak in the next few years.
Marchionne hopes to see more than half of FCA stock changing hands in New York instead of Milan, but appetite will take time to build, especially as FCA has yet to switch to U.S. accounting principles and to reporting results in dollars.
Marchionne will hit the road next month to spread the word. FCA may also sell treasury shares and other stock after the listing in an attempt to boost trading volumes.
The CEO believes FCA's cause will be aided by Chrysler's brand strength in the United States, now the main profit center for the combined group. FCA sold more cars in North America last month than Toyota Motor Corp, the world's largest automaker.
(Additional reporting by Paul Lienert and Bernie Woodall in Detroit; editing by Silvia Aloisi, David Goodman, Mark Potter and Matthew Lewis)
