Chrysler 2004 Annual Report Download - page 65

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Fiat Auto
Auto launched the New Fiat Multipla, the Alfa Crosswagon Q4
(an entry in the all-wheel-drive market niche) and the restyled
Alfa 147.
In the light commercial vehicle segment, the Sector introduced
the New Scudo, which will play a key role in enhancing brand
profitability, and rounded out the Ducato line.
In 2004, Fiat Auto and AdamOpel AG signed a contract
whereby Fiat will use General Motors Epsilon architecture
for the production of the New Fiat Croma, which was unveiled
in a world preview at the Geneva International Motor Show in
March 2005.
Another contract, signed with Suzuki, will help Fiat enter
the SUV segment with a jointly developed, Fiat-branded vehicle
that will be manufactured by Suzuki in Hungary.
FINANCIAL AND SERVICE ACTIVITIES
In 2004, financing provided to the distribution network totaled
about 11,090 million euros. The use of programs to securitize
receivables from the distribution network carried out directly
by the industrial companies accounts, among other reasons,
for the decrease of 9.5% compared with 2003.
In Europe, financing provided to suppliers decreased to about
6,342 million euros, or 22.7% less than in the previous year.
In the renting business, the Sector’s associated companies
continued to implement in 2004 the programs launched in
previous years to strengthen the distribution and maintenance
network while focusing on enhancing the profitability of new
contracts. This strategy produced a significant improvement
in the financial performance of these companies compared
with 2003.
In 2004, Leasys, a Fiat Auto/Enel joint venture, established
a new business unit that operates in the segment of specially
equipped commercial vehicles, which enabled it to strengthen
its position as the leader of the Italian market for long-term
rentals.
Savarent continued to perform the function of a captive
company operating through the Fiat Auto dealer network,
and serving mainly private customers and small and
medium-size businesses.
At the end of 2004, the Sector’s rental fleet numbered 140,000
units, or 4.5% more than in 2003.
In the area of mobility services, Fiat Auto continued to develop
and market mobility services that use the bConnect system to
pinpoint the location of vehicles.
The Sector’s financing and service operations generated
revenues of 708 million euros in 2004, compared with 1,339
million euros in 2003. The revenue decrease is due essentially
to the sale and deconsolidation of the European and Brazilian
retail operations. On a comparable basis, revenues generated
by the financing and service operations increased by 6%,
compared with 2003.
Income before taxes increased to 81 million euros, up from
23 million euros in 2003 (loss of 95 million euros in 2003 on
a comparable basis). Better results reported by affiliated
companies and a decrease in non-operating charges account
for this improvement.
RESULTS FOR THE YEAR
The salient data of the Sector’s operating performance in 2004
include a 2.6% gain in net revenue, which increased to 20,539
million euros, and a reduction in the operating loss, which
shrank from 979 million euros in 2003 to 840 million euros in
2004. Restated on a comparable scope of consolidation basis,
net revenues show an increase of 5.5%, and the operating loss
falls by 254 million euros. This improvement was made possible
by higher unit sales and by an improvement in the sales mix,
particularly thanks to the newer models (new Panda, Idea, Alfa
GT). Actions taken with respect to prices and discounts also
had a positive effect, while cutbacks in production costs made
possible mainly by process efficiencies were especially
important.
The net loss for the year totaled 2,019 million euros, compared
with a net loss of 2,058 million euros in 2003.
Research and development outlays, which increased to 990
million euros, or 5.4% more than in 2003, refer primarily to the
introduction of new models (Nuovo Ducato and Nuova Punto).