Chrysler 2003 Annual Report Download - page 56

Product innovation and investments
The salient events in Iveco’s product innovation and
development in 2003 were the commercial launches of new
products in the heavy-vehicle segment (Stralis AT/AD, which,
coming after the introduction of the Stralis AS at the end of
2001, rounded out the Sector’s line of road vehicles) and
medium-vehicle segment (New Eurocargo, which represents
a styling and technical evolution of the Eurocargo, which
was again the market leader in 2003). These new products
accounted for the lion’s share of the revenues generated in
the second half of 2003. Most of the development work dealt
with the design of the new Stralis AC (which will complete
Iveco’s line of heavy vehicles by extending the Stralis concept
to the quarry and construction-site vehicles slated for market
introduction in September 2004); with product-line optimization
projects; and with early studies focused on identifying the
technical solutions that must be adopted to comply with the
upcoming Euro 4 emissions standards. At the beginning of 2003,
Iveco received at its Madrid plant the Truck of the Year 2003
award for the Stralis AS. The Sector also continued to develop
new families of engines configured for different types of
applications (automotive, agriculture, power generation, marine
and railroads). Also in this area, Iveco has virtually completed
its investment program for the NEF line of engines and is
continuing to fund the expansion of production capacity for
2.3-liter F1 engines.
Results for the year
In 2003, Iveco’s net revenues totaled 8,440 million euros.
This figure is 7.6% less than in 2002 in absolute terms,
but represents virtually no change when viewed on a
comparable consolidation basis.
Operating income totaled 81 million euros (73 million euros
on a comparable consolidation basis and excluding the
consolidation of European Engine Alliance S.c.r.l.), down from
102 million euros in 2002 (77 million euros on a comparable
basis), for a year-over-year decrease of slightly less than 5%.
This result was achieved in an environment characterized by
fierce competition in Western Europe that caused revenues
to decrease, and by unfavorable foreign exchange rates
(especially for the British pound). Iveco responded to these
negative factors by significantly reducing manufacturing
costs and overhead, which enabled it to hold the decrease
in profitability to the level stated above.
Depreciation and amortization amounted to 304 million euros
(423 million euros in 2002). On a comparable basis, there was
virtually no change from the 2002 figure (296 million euros).
The net loss decreased to 258 million euros (loss of 493 million
euros in 2002). On a comparable consolidation basis, the loss
is 34 million euros less than in 2002, when the figure included
the recognition of a 210-million-euro writedown related to
the sale of Fraikin.
55 Report on Operations Iveco
Sales Performance –Units Sold by Product Segment
(in thousands of units) 2003 2002 % change
Heavy 32.9 31.6 4.2
Medium 19.3 24.6 (21.5)
Light 81.5 91.6 (11.0)
Busses (*) 8.6 8.8 (2.1)
Divisions (**) 4.0 5.3 (23.8)
Total units sold 146.4 161.9 (9.6)
(*) Irisbus + Iveco’s Bus Division.
(**) Astra, Defense and Firefighting Vehicles.