Citi Conference Slides - Final · Credit Conference Richard Palmer November 15, 2012. 1...
Transcript of Citi Conference Slides - Final · Credit Conference Richard Palmer November 15, 2012. 1...
1
Forward-Looking Statement
This document contains forward-
looking statements that reflect
management's current views with
respect to future events. The words
“ant ic ipate,” “assume, ” “bel ieve, ”
“est imate,” “expect,” “intend, ”
“may,” “plan,” “project ,” “should”
and similar expressions ident i fy
forward-looking statements. Such
statements are subject to risk s and
uncertaint ies, inc luding, but not
l imited to: the effect ive
implementat ion of the Chrys ler
Group LLC 2010 – 2014 Busine ss Plan
outl ined on November 4, 2009,
inc luding success ful veh ic le launches;
industry SAAR levels; cont inued
economic weakne ss, especial ly in
North America, inc luding continued
high unemployment levels and
limited avai labi l ity of a ffordably
priced financing for our deale rs and
consumers; introduct ion of
competing products and competit ive
pressures which may limit our abil ity
to reduce sales incent ives; supply
disrupt ions result ing from natural
disasters and othe r events impact ing
our supply chain; and our abil ity to
real ize bene fits f rom our industrial
al l iance with Fiat , part icularly in l ight
of the economic crisi s current ly
affect ing seve ral European countrie s.
If any of the se or other risk s and
uncertaint ies occur, or if the
assumptions underlying any of these
statements prove incorrect , then
actual results may be material ly
dif ferent from those expre ssed or
implied by such statements. We do
not intend or assume any obligat ion
to update any forward-looking
statement, which speaks only as of
the date on which it is made . Further
detai ls of potent ial risk s that may
affect Chry sler Group are desc ribed
in Chry sler Group’s Annual Report on
Form 10-K, and its subsequent
periodic reports fi led with the U.S.
Securit ies and Exchange Commission.
2
Agenda
Product Update
Fiat Group Alliance
Fiat Group Business Plan Update - EMEA
Chrysler Group Financial Results
3
Q3 YTD 2012 Financial HighlightsChrysler Group
Net Income ($Mils)
Net Industrial Debt ($Bils)2.9
0.7
Cash ($Bils)11.9
9.6
Net Revenue ($Bils)
Modified Operating Profit ($Mils)
Modified EBITDA ($Mils)
• Growth primarily driven byincreased volumes and positivepricing, partially offset byunfavorable mix
• Worldwide shipments up 22% to1,796k units (1,809k shipmentsadjusted for GDP units)
• Modified Operating Profitincreased 50% versus prior year
• Improved performance primarilyattributable to increasedshipments and positive pricing,partially offset by unfavorable mix,increased ER&D and advertisingcosts and content enhancementcosts on new vehicles
39.9
48.6
1.5
2.2
3.64.1
• Net income increased $1,332versus the prior year loss of $42
• YTD 2012 net income increased153% versus the prior year’sAdjusted Net Income of $509(which excludes a loss onextinguishment of debt of $551 inQ2 2011)Q3 YTD ‘11 Q3 YTD ‘12 Q3 YTD ‘11 Q3 YTD ‘12
Q3 YTD ‘11 Q3 YTD ‘12
Q3 YTD ‘11 Q3 YTD ‘12 Dec 31, ‘11 Sept 30, ‘12
Dec 31, ‘11 Sept 30, ‘12
• An increase of 15% versus prioryear primarily driven by highervolumes and positive pricing
• Margin reduced due tounfavorable mix, increased ER&Dand advertising costs and contentenhancement costs on newvehicles
+22%
4.5% ofRevenue
• Net Industrial Debt decreased to$0.7 primarily due to positive freecash flow for the first nine monthsof 2012
3.7% ofRevenue
8.5% ofRevenue9.0% of
Revenue
Sept 30, ‘11
Sept 30, ‘11
9.5
2.9
• Free Cash Flow of $2.5 in first ninemonths of 2012
• Total liquidity was $13.2, including$1.3 available under a revolvingcredit facility
1,290
509
(42)
(U.S. GAAP)
4
Key Financial Metric Trends – Steady ImprovementChrysler Group
1. Excludes loss on extinguishment of debt of $551 million in Q2 2011
(197) (172)(84)
(199)
116 181 212 225
473 436381143
(1.5%)
183(1.7%)
239(2.2%)
198(1.8%)
477(3.6%)
507(3.7%)
483(3.7%)
508(3.4%)
740(4.5%)
755(4.5%)
706(4.6%)
9.7 10.511.0 10.8
13.113.7
13.1
15.1
16.4 16.8
15.5
Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3'12
Net Revenue($Bils)
Modified Op Profit(% of Net Revenue)
($Mils)
Adjusted NetIncome (Loss) 1
($Mils)
WorldwideShipments (000’s) 380 433 407 382 485 514 469 543 607 630 559
(U.S. GAAP)
5
Cash and Gross / Net Industrial Debt TrendsChrysler Group
7,3677,841 8,260
7,347
9,87710,175
9,454 9,601
11,256
12,075 11,947
Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
3,825 3,385
3,7665,773
3,3772,112
11,192 11,226
12,026
13,120 13,254
12,287
Addition of Mexico
Development Banks
Loan
Addition of Canada
Health Care Notes Refinancing of Gov’t
debt plus equity
proceeds from FiatGROSS
INDUSTRIALDEBT
CASH
NETINDUSTRIAL
DEBT
2,868
12,322
Note – Financial results based on U.S. GAAP – see Non-U.S. GAAP Financial Information and Other Items
2,932
12,533
1,336
12,592
432
12,507
693
12,640
(U.S. GAAP; $ Mils)
6
2012 Chrysler Group Cash WalkDecember 31, 2011 to September 30, 2012
Note: Numbers may not add due to rounding
Dec 31,2011
ModifiedEBITDA
Working Capital& Other
CapitalExpenditures
Pension /OPEB
Taxes &Interest
Net PrincipalPayments & FX
Sept 30,2012
Change in Cash$2.3
(0.4)
2.8
11.9
(1.0)9.6
4.1
(3.1)
• Free Cash Flow drivenby strong operatingperformance andworking capital effects,partially offset by capitalexpenditures and VEBAinterest payment
Free Cash Flow$2.5
(0.2)
(U.S. GAAP; $ Bils)
7
Chrysler Group Financial Liabilities Maturity ScheduleTreasury functions separate from Fiat
•• Chrysler Group and Fiat continue toseparately manage their own financialmatters, including treasury services
No guarantee, support or similar obligations inrelation to other’s financing obligations; noobligation or commitment to provide funding tothe other
Financial segregation also supported by legallybinding obligations
Chrysler’s May 2011 credit agreement limitsfinancial support to Fiat (inter alia cumulativelimit on dividend payments of $500mnpayable only if specified minimum liquidity ismet)
Fiat’s 3-year RCF also limits financial supportto Chrysler (including limits on guaranteesand loans)
Chrysler’s financing agreements and its LLCOperating Agreement contain additionalrestrictions limiting related-party transactions,including approval process for materialcommercial or financial transactions between thecompanies
• These restrictions apply, while theseinstruments are in place, regardless of thepercentage of Fiat’s ownership in Chrysler
Note: Excluding accrued and accreted interest
2012 2013 2014 2015 2016 2017+Sept 30, ‘12(Carrying Value)
12.6
0.4 0.5 0.5
10.7
0.40.1
Annual MaturitiesGross
IndustrialDebt
0.1 0.4 0.5 0.5 0.5 11.4Face Value
13.4
(U.S. GAAP; $ Bils)
8
8.5
8.0 8.1
9.19.4
9.6
8.89.2
10.6
11.4
10.811.2 11.2 11.3
8.6
11.311.6
13.7
12.9 12.812.6
14.714.9
14.5
12.9
15.0
14.514.3
Chrysler Group Sales Performance (U.S. /Canada)YTD Q3 2012
QUARTERLY MARKET SHARE
(%)
2009
FY share
11.0%
8.8%
Q2 Q3 Q4 Q3Q1 Q2 Q4 Q2Q1 Q3 Q4
2010
FY share
13.0%
9.2%
2011
FY share
14.3%
10.5%
Q1 Q2
2012
YTD share
14.6%
11.2%
Q3
Vehicles (000s)
SALES GROWTH
(U.S. & CANADA)
1,192
+48(+75%)
Fiat500Jeep
GrandCherokee
Chrysler200
RamPickup
Q3’ 11 Q3’ 12
+33(+131%)
+27(+29%)
+22(+119)
+40(+18%)
+36(+18%)
47
ChryslerT&C /Dodge
Caravan
1,445
+24%
+6%
CGSALES
Other
+253(+21%)
Chrysler300
INDUSTRY
SALES
+15%
+7%
9
14.0%
11.6%
19.9%35.8%
18.7% 16.8%
13.4%
20.8%
31.9%
17.1%
Chrysler Group U.S. Sales by Vehicle SegmentMore competitive entries in the car segments
SUV
Chrysler Group’s car mix increased from 26% to 30% due to the continuing process ofintroducing more competitive car offerings
Pickups & VansSmall & Mid-Size
Cars
YTD Q3 2011(Total U.S. Sales = 1,009,000)
Large &Specialty Cars
Minivan &Crossovers SUV
Pickups & VansSmall & Mid-Size
CarsLarge &
Specialty Cars
Minivan &Crossovers
Total Car = 25.6% Total Car = 30.2%
YTD Q3 2012(Total U.S. Sales = 1,251,000)
10
Chrysler Group 2012 Product IntroductionsNAFTA
Q1 Q2 Q3 Q4
2012 Fiat 500 Abarth2012 Fiat 500 Abarth 2013 Dodge Dart2013 Dodge Dart 2013 Ram 15002013 Ram 1500 2013 Viper SRT10 & GTS2013 Viper SRT10 & GTS
• Aggressive, functionalstyling
• Lightweight, track-tunedhandling and purpose-builtdesign
• 0-60 mph in 7.5 seconds
• 160 Hp 1.4L MultiAir Turboengine
• 3 mode electronic stabilitycontrol with full-offcapability for the track
• First C-segment sedan since2005
• Executing a staged launchintegrating various powertraincombinations
• All-new Aero model (41highway mpg) startedproduction in September,arriving in dealershipsshortly
• Production ramp-up and salesrates on track with plan
• 28k units produced in Q3
• Q3 sales exceeded 10k
• October dealer ordersexceeded production by8,000 vehicles
• Class exclusive infotainmentand connectivity technologies –attracting youngerdemographics
• “Top Safety Pick” by IIHS and“5-Star Safety Rating” fromNHTSA
• Best-in-class:
• Fuel economy – 17 city /20 comb / 25 hwy mpgwith Pentastar 3.6L V64x2 and segment-exclusive TorqueFlite 8-speed transmission
• Aerodynamics
• Outstanding premiumengine fuel economy withthe 5.7L V8 Hemi coupledwith the all-new TorqueFlite8-speed transmission
• Segment-leading technologyand improved telematics
• Upgraded exterior andinterior
• Two all-new models:
• SRT Viper and SRT Viper GTS
• 8.4L V-10 engine
• 640 hp and 600 lb.-ft. torque
• Carbon-fiber and aluminum skin– lower drag coefficient
11
Chrysler Group 2013 Key Product IntroductionsNAFTA
Jeep D-SUVJeep D-SUV
Ram LargeCommercial Van
Ram LargeCommercial Van
FiatFiat
Ram 2500-3500 PickupMajor Refresh
Ram 2500-3500 PickupMajor Refresh
Jeep Grand CherokeeMajor Refresh
Jeep Grand CherokeeMajor Refresh
12
New Powertrains Leading to Improved Performance and Fuel Economy
• First NAFTA OEM implementation of 8-speed transmissiontechnology (to be followed by 9-speed transmission in 2013)
• Provides 8-12% increase in EPA Combined Fuel Economy forChrysler’s RWD V6, V8 and small Turbo Diesel applications (vs.5-speed transmission); and reduces CO2 emissions
• Delivers improved performance and shift quality overconventional 5- and 6-speed transmissions
• Will be available across Chrysler Group’s RWD productportfolio; first application with the 3.6L V-6 Pentastar DodgeCharger and Chrysler 300 vehicles; also in Ram 1500 pickup
8-Speed RWD Transmission
Fuel Economy Improvement forChrysler 300 and Dodge Charger
+ 10-12%
2011 MY 2012 MY
• Extensive manufacturing base for FIRE engine: US-Michigan, Brazil, India andItaly
• MultiAir add-on package on base engine; shot-by-shot control of air / fastresponse continuously variable valve lift
• Up to 10% fuel economy improvement
• Highly fuel-efficient V6 engine family; first launched in 2011 Jeep GrandCherokee
• Fuel efficiency improvement up to 10%
• Flexible family architecture for downsized displacement, Direct Injection,Turbo Charging and MultiAir
• Produced in two state-of-the-art manufacturing facilities in Trenton (US-Michigan) and Saltillo (Mexico)
V6 Pentastar Engine Family
FIRE MultiAir Engine
2.8L & 3.0L Diesel Engines
• Applied to Chrysler Grand Voyager, Jeep Wrangler, Chrysler300, Lancia Thema and Jeep Grand Cherokee in Europe
• 24% (Grand Voyager) and 27% (Thema) improved fuelconsumption vs. 3.6L gas engine
• Meets Euro 5b emissions; Biodiesel capable
13
Chrysler Group World Class Manufacturing Update
Achieving consistent dimensional results drives improvedvehicle fit and finish
Injury reduction accelerating despite higher capacityutilization
Productivity improvements leads to lower per unit costs
73%
92%
>100%
49%
60%
>70%
0%
20%
40%
60%
80%
100%
120%
2010A 2011A 2012E
Harbour = Two 8-hour shifts for 235 working daysTechnical = 3 shifts in all plants (except Saltillo) @ 285 days)
% Utilization
Assembly Capacity Utilization
CG Production 1.6M 2.0M ~2.4M(excludes Purchased vehicles)
Harbour
Technical
• Three “Bronze” level plants – Dundee Engine, Windsor Assemblyand Toledo complex
• Flexible body-in-white lines, increased jobs per hour, 3-crew and4-day working patterns contribute to manufacturing efficiencies,including improved capacity, utilization, productivity and quality
14
Chrysler Group FY 2012 Guidance ConfirmedRevised NAFTA Industry sales forecast
GuidanceQ3 YTDActual
Worldwide VehicleShipments
2.3 – 2.4 M 1.7 M
Net Revenues ~ $65 B $49 B
Modified Operating Profit ≥ $3.0 B $2.2 B
Net Income ~ $1.5 B $1.3 B
Free Cash Flow > $1 B $2.5 B
13.5
15.2
16.4 16.6
17.1
14.2
15.6
~1717.7 17.7 18.2
18.3
2010 2011 2012E 2013E 2014E 2015E 2016E
Chrysler plan @ 2009 Investor Day
Actual / Revised forecast
NAFTA(passenger cars,SUV, pick-uptrucks & LCVs)
Revised Industry SAAR Estimates
16
Cer t a in in f o rma t io n in c lu ded in th i sp res en ta t io n , in c lu d ing , w i t h ou tl im i t a t io n , any f o rec as t s in c lu dedhere in , i s f o rwa rd lo ok ing a nd iss ub jec t to impo r t a n t r i s k s andun ce r t a in t ie s th a t c ou ld c a use a c tua lr es u l t s t o d i f f e r ma te r ia l l y . TheG roup ’ s bu s in ess es in c lu de i t sa u tomo t ive , a u tomot ive - r e la t ed a ndo the r s ec t o r s , a nd i t s ou t lo ok i sp redom ina n t ly ba s ed on i t sin t e rp re t a t io n o f wha t i t c ons ide r s t obe the key econom ic f ac t o r s a f f e c t in gthes e bus in es s es . F o rwa rd - lo ok ings t a t emen t s w i t h rega rd to th e G roup ' sbu s in es s es in vo lve a number o fimpo r t a n t f ac t o r s th a t a re sub jec t t oc ha nge , in c lu d ing , bu t no t l im i t ed to :th e ma ny in t e r re la t ed f a c t o r s th a ta f f e c t con sumer con f iden c e andwo r l dw ide dema nd f o r au tomo t ive anda u tomo t ive - re la t ed p rodu c t s andcha nges in con sumer p re f e ren c es tha tc ou ld redu ce re la t ive dema nd f o r t h eG roup ’ s p rodu c t s ; gove rnmen ta lp rog ra ms ; genera l ec onom icc ond i t io n s in ea ch o f t h e G roup ' sma rke t s ; leg i s la t io n , pa r t i c u la r ly t h a tre la t in g to a u tomo t ive - re la t ed i s s ues ,t h e env i r onmen t , t r a de and commerc ea nd in f r as t ru c tu re deve lopmen t ;a c t io n s o f c ompet i t o r s in th e va r io u sin du s t r ie s in wh ic h the G roupcompetes ; p rodu c t io n d i f f i c u l t i e s ,in c lu d ing c a pac i t y a nd supp lyc on s t ra in t s , exc es s in ven to ry leve l s ,a nd the impa c t o f veh ic le de f ec t sa nd/o r p rodu c t rec a l l s ; la bo r
re la t io n s ; in t e res t ra t es a nd cu r ren c yexcha nge ra t es ; ou r a b i l i t y t o rea l i z ebene f i t s a nd s ynerg ies f r om ou r g loba la l l i a n c e a mong the G roup ’ s members ;s ubs ta nt ia l deb t a nd l im i t s on l iqu id i t yth a t ma y l im i t ou r a b i l i t y t o execu teth e G roup ’ s c omb ined bu s in es s p la n s ;po l i t i c a l a nd c iv i l u n res t ; ea r thqua kesa nd o the r r i s k s a nd unce r t a in t ie s . A nyo f t h e as sumpt ion s under ly in g th i sp res en ta t io n o r a ny o f t h ec i r c ums ta n c es o r da ta men t io ned inth i s p res en ta t io n ma y cha nge . A nyf o rwa rd - lo ok ing s t a t emen t s con ta in edin th i s p res en ta t io n spea k on ly as o ft h e da te o f t h i s p res en ta t io n . W eexpres s ly d i s c la im a du ty to p rov ideupda tes t o a ny f o rwa rd - lo ok ings t a t emen t s . F ia t does no t as sume andexpres s ly d i s c la ims a ny l ia b i l i t y inc onnec t io n w i t h a ny in a ccu ra c ie s ina ny o f th es e f o rwa rd - lo ok ings t a t emen t s o r in connec t io n w i t h a nyu se by a ny th i rd pa r t y o f su chf o rwa rd - lo ok ing s t a t emen t s . Th i sp res en ta t io n does no t rep res en tin ves tmen t a dv ic e o r arec ommenda t io n f o r th e pu rc ha s e o rs a le o f f in a nc ia l p rodu c t s and/o r o fa ny k ind o f f in a n c ia l s e rv i c es . F in a l l y ,t h i s p res en ta t io n does no t rep res en ta n in ves tmen t s o l i c i t a t io n in I t a ly ,pu r s ua n t t o S ec t io n 1 , le t t e r ( t ) o fL eg i s la t i ve Dec re e no . 58 of F eb rua ry24 , 1998 , as a mended , no r does i tr ep r es en t a s im i la r s o l i c i t a t io n a sc on temp la t ed by the la ws in a ny o the rc oun t ry o r s t a t e .
Safe Harbor Statement
18
Unique brands covering the entire automobile landscape
GLOBAL VEHICLE BRANDS Jeep and Alfa Romeo strongly
recognized internationally
Ferrari and Maserati as Luxury& Performance brands
The Italian way of high-tech,sportiness, performance and
racing for Fiat’s small andcompact cars
Italian design expressed in itsmost everyday, functional and
simplest form
A premium Italian brand with clearfocus on advanced technology
performance and design, set to deliverpure-spirited products, Italian design,dynamic and active driving experience
engaging senses
An American icon brand for SUV’srepresenting unique, freedom,
adventure, authenticity, passion values
Over 7 million vehicles on roadworldwide – our most global brand
with sales in 120+ countries
Chrysler is a leader for design andinnovation, innovator of minivans and
creator of the 300 offering ultimateversatility vehicles for families and
bridging exclusivity to masses
Lancia represents 105 years of carmaking history and offering ultimatefusion of engineering and elegance of
Italian cars
A “quintessentiallyAmerican” brand; embodies
capability, style, and anageless enthusiasm for fun
and performance
Products known for value,power, safety and style
Street & Racing Technology hasfive hallmarks: awe-inspiringpowertrain; outstanding ride
and handling; aggressiveexterior; race inspired interior;
for discerning performancedriving enthusiast
The most up-to-date andcomplete commercial
vehicle offerings of any EUproducer with strong
position in Europe and LatinAmerica
Established its own brand identity in2009, Ram Trucks & Commercial
Vehicles deliver on customer prioritieswith best-in-class capabilities and class
exclusive features
Luxury brandcombining high-
performance,highly refinedcraftsmanship
and a high degreeof personalization
Unique iconicasset, a legendarybrand since 1947
with strongrelationship
between road &racing cars
Authentic original parts,accessories & services with
unique personalizationopportunities
Sales of Mopar parts provide lesscyclical revenue stream, profit
and cash flow generation
MASS VEHICLE BRANDS WITHREGIONAL FOCUS Fiat brand to play in Europe, Latin
America and APAC regions withiconic intros in North America
Chrysler fully integrated into Lanciain Europe (RHD markets excepted)
Dodge and RAM being mostlymaintained as American brandswith select products beingintegrated into Fiat brand overtime
High-performance versions byAbarth and SRT
Customization leadership and globalservice & parts footprint
19
Update on Integration Activities & Synergies
• New Chrysler formed out of “363” sale June 2009 with Fiat at 20%
• Government loans repaid in May 2011, 6 years early; Fiat ownershipup to 58.5% current
• GEC formed to drive single management organization with 4 regionalhubs Sept 2011
• Chrysler sales activities integrated into Fiat in EMEA & LATAM
• Fiat brand successfully launched in NAFTA with Fiat 500 early 2011
• Converged to 3 key architectures and launched first vehicle with NewPanda (Mini), 500L (Small), Dart (Compact)
• Maserati brand relaunch accelerating, 2 new sedans launching H12013
• Integrating Fiat LCV vehicles into RAM brand to complete full-rangecommercial vehicle brand
• Completing worldwide powertrain offering with Fire 1.4 in NAFTA,Pentastar downsize for APAC, 8-speed/9-speed planetary transmission
• APAC business developing driven by Jeep SUV success, localizationstarted with launch of Viaggio in China
• Purchasing & WCM progressing with significant savings, efficiency &capacity improvement
• No longer a marginal player in global ranking
21
EXTERNAL MARKET FACTORS
• Slump in European market demand, with 2012 beingthe 5th consecutive year of decline
Expected 2012 volume of ~12.5mn passenger cars is thelowest level since 2007 and down 20+% from 16mn peak
Italian market at <1.4mn units and down 40+% from 2.5mnpeak in 2007
European LCV volumes expected at ~1.6 million units anddown 30+% from 2.4mn peak in 2007
• Pricing pressure, especially for mass market segments
• Further pressure from Korean and potential Japaneseand Indian FTA’s
• Market becoming bi-polar with profitability limited topremium
• Low-end brands increasingly relevant in mass market
• Lack of visibility for recovery to pre-crisis level
• Structural overcapacity of European manufacturerswill delay any pricing recovery
• Industry heavily regulated and no moves to simplify
88%
80%
~69%
56%52%
~45%
2010 2011 2012E
Harbour definition Technical definition
GROUP CAPACITY UTILIZATION IN EMEA(passenger cars & LCVs; including JVs; percent)
235 days p.a. / 16 hours per day 280 days p.a. / 3 shifts per day
MARKET EXPECTED TO BE FLAT IN 2013 AND THEN
GRADUAL RECOVERY TO ~15MN IN 2015/2016(PASSENGER CARS & LCVS)
Current State and Industry Forecast in EMEA
13.9
15.4
16.5
17.4
18.2
14.4
15.3
14.1 13.9 14.1
14.9
15.6
2010 2011 2012E 2013E 2014E 2015E 2016E
Fiat forecast @ 2010 Investor Day
Revised forecast
EU27+EFTA(passenger cars & LCVs)
22
We have chosen the second option because:
• We have installed up-to-date available capacity in EMEA and have little capacity leftelsewhere
• We have at least 3 brands that are capable of competing in the higher margin business
• Fiat-Chrysler has developed over the last 3 years the relevant architectures and baselinepowertrains to enter the premium end of the business and
• Fiat-Chrysler has access to the NAFTA and APAC markets
OR
REMAIN FOCUSED ON NON-PREMIUM MASS-MARKET AND
RATIONALIZE CAPACITY BY CLOSING 1 OR MORE PLANTS1
LEVERAGE HISTORICAL PREMIUM BRAND HERITAGE (ALFA ROMEO &MASERATI), RE-ALIGN PRODUCT PORTFOLIO AND REPOSITION THE
BUSINESS FOR THE FUTURE
2
BOTTOM LINE, WE NEED TO STOP CHASING OUR OWN TAIL IN EMEA
Solving the EMEA Quandary
23
1. Focus Fiat brand on 500 and Panda as pillar vehicles (brands within a brand) and derive allfuture products therefrom
2. Reduce/curtail Lancia exposure, preserving uniqueness of Ypsilon and rely on Chrysler’sNAFTA development to feed European brand, if economically viable
3. Focus on Alfa Romeo and Maserati to access higher-end of bi-polar market
4. Fully flesh out Jeep brand by developing appropriate products for European and internationalmarkets
5. Continue to develop and maintain leading position in LCVs
OVERRIDING OBJECTIVES ARE:
1. TO UTILIZE EMEA PRODUCTION BASE TO DEVELOP OUR GLOBAL BRANDS
(ALFA ROMEO, MASERATI, JEEP AND THE FIAT 500 “FAMILY”)
2. TO SHIFT A SIGNIFICANT PORTION OF PRODUCT PORTFOLIO TOWARDS
HIGHER MARGIN OPPORTUNITIES
Fiat Group Strategy Going Forward in EMEA
24
2013 20142012 2015 2016
NOT CURRENTLY IN PRODUCTIONANYWHERE
only for EMEA
for EMEA and export
for EMEAVEHICLES
PRODUCED IN
EMEA
for EMEA and export
only for EMEAOUTSIDE ITALY
IN ITALY
for EMEA and export
New modelIMPORTED
VEHICLESRefresh
MODEL
REFRESHOUTSIDE ITALY
IN ITALY
Major new model launches in EMEA(Start of Production within each year indicated)
25
• Products needed for competitive offeringin Europe are complementary to thoseproduced in NAFTA and LATAM whereproduction capacity is or will soon besaturated as Chrysler product offeringcontinues to be renewed through 2015
• Target to utilize up to 15% of capacity forexport, especially for Jeep smaller SUV(not currently in production anywhere),Alfa Romeo and Maserati brands
• Architecture allocation
• Italian footprint for higher value-addedproduction
• Focus ex-Italy on smaller segments
• Working with Italian Government onactions to improve competitiveness forexport
• New Union agreement in place whichaddresses labor flexibility issue but need fulladherence
Synergies and TargetsUtilize European manufacturing base for worldwide volume growth
Our new EMEA Targets
• 2012 confirmed Trading Loss of ~€700million
• 2013 European market expected to beflat and EMEA loss expected at similar orslightly lower level
• Actions on product plan and commitmentof capital to Italian manufacturing sites
• are dependent on respect and compliancewith new labor agreements;
• will require 24-36 months forimplementation and
• will allow Fiat-Chrysler in EMEA to recoversome market share in a more rationalmarket and to act as export base for salesby other regions
• Break-even achievable in 2015-16
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GROUP INVESTOR RELATIONS TEAM
Marco Auriemma +39-011-006-3290
Vice President
Alexandra Deschner +39-011-006-2308
Timothy Krause +1-248-512-2923
Paolo Mosole +39-011-006-1064
Sara Nicola +39-011-006-2572
Maristella Borotto +39-011-006-2709
email: [email protected]
websites: www.fiatspa.com
www.chryslergroupllc.com
Contacts