Fiat Chrysler has set aside $811 million to settle U.S. government accusations that it used illegal technology to circumvent federal emissions laws.
The one-time cost contributed to a double-digit decline in profits in the company's third quarter as automakers globally struggle with higher raw material expenses and a slowdown in China sales. Net income dropped 38 percent to $641 million, or 41 cents per share.
Fiat’s sales, which rose 18 percent in North America, were countered by “increased product content and logistics costs,” the company said. Revenue in Asia fell 26 percent, narrowing the total sales gain in the three months through September to 9 percent.
President Trump’s tariffs on steel and aluminum imports, as well as the levies on $250 billion worth of Chinese products, are forcing automakers to reevaluate global supply chains to decrease production costs. The industry at large is also grappling with decreasing sales in China.
At Ford, one of Fiat’s top competitors, the combination of the two factors led to a 37 percent decline in third-quarter profits.
Fiat’s stock rose slightly on Tuesday in New York trading.