Chrysler 2004 Annual Report Download - page 69

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CNH
significant increases in all its segments. In contrast, unit
shipments of all its main products decreased in Western Europe.
GROWTH STRATEGIES
The overall merger integration process generated incremental
profit improvements, mainly coming from material cost
reductions, excluding steel, manufacturing footprint and
efficiency actions. Further economies of scale were the result
of the additional reduction in the number of suppliers and
the streamlining of parts depots. The manufacturing footprint
rationalization plan resulted in the reduction of the number
of plants to 39. Moreover, new products contributed significant
incremental profit.
In an effort to better compete in the international markets, in
January 2005 CNH began the consolidation of its construction
equipment family brands in Europe and Latin America, into one
New Holland brand. The company is focusing on two
construction brands – Case and New Holland. This
consolidation will allow CNH to provide better support
to its dealers, strengthen its dealer network, and result
in the availability of a greater range of products.
PRODUCT INNOVATION
Implementation of common platforms for agricultural
and construction equipment continued in 2004, significantly
contributing to the product range renewal. From 2001 to 2004
CNH has renewed 97% of its agricultural equipment product
offering and 85% of its construction equipment.
In 2004, more than 140 new and upgraded models were
launched by CNH’s agricultural equipment brands. In Europe
it received two prestigious awards for New Holland products
and one for Case IH, and in North America three awards were
received for New Holland products and four for Case IH.
More than 1,200 products were reviewed by
“Construction Equipment” magazine in 2004: selections
made on the basis of input received from readers and
the magazine’s editors own experience with equipment
technology permitted to find the 100 products that
most notably highlight not just innovation but
manufacturers investing in research and development
for greater productivity, efficiency and safety of their
machines. Winners included New Holland’s B series
wheel loaders and EH series excavators, and Case’s
compact excavators, hydraulic hammers and
compaction equipment.
FINANCIAL ACTIVITIES
In 2004 CNH financial activities posted revenues of 540
million euros, slightly less (approximately –2%) from the
549 million euros of 2003. If expressed in dollars, the
accounting currency of the Sector, revenues would have
been approximately 8.3% higher.
Income before taxes totaled 185 million euros,
compared with 116 million euros in 2003. The
improvement, which amounted to about US$100 when
expressed in that currency, is attributable to better
spreads on the Company’s asset backed securitization
transactions and improved margins on interest.
Continued improvements in portfolio quality have
resulted in steady declines in past due and delinquency
rates in the Company’s core business and lower
provisions for loan losses for the year.
RESULTS FOR THE YEAR
In 2004, CNH had revenues of 9,796 million euros (US$12,186
million), compared with 9,418 million euros (US$10,654 million) in
2003. The increase over the previous year (+4%) was constrained