Chrysler 2005 Annual Report Download - page 63

62 Reporton Operations CNH
01 Report on Operations
Growth Strategies
CNH reorganized its operations in the fourth quarter of 2005
to focus on its four distinct global brands, giving each one full
independent profit and loss accountability - Case IH and New
Holland in agricultural equipment and Case and New Holland in
construction equipment - in order to invigorate the brands and
satisfy more effectively the differentiated needs of the customers
and dealers of each brand. CNH is allocating new resources to
provide additional dedicated sales and marketing personnel and
materials, and additional technical support and training to its dealers.
The Sector has, in particular, defined the following:
refocus on its customers and further improve its distribution
and service capabilities and product quality and reliability, all
designed to increase customer satisfaction and market penetration;
achieve higher margins by delivering efficiencies in purchasing and
manufacturing structure;
reduce debt and strengthen its consolidated balance sheet by
increasing cash flow.
Afull-line company in both the agricultural and construction
equipment industries, CNH has strong and usually leading positions
in most significant geographical areas and product categories in
both businesses. As of December 31, 2005, CNH was manufacturing
products in 39 facilities throughout the world and distributing its
products in approximately 160 countries around the world.
Innovation and Products
The company has recently completely renewed products lineup
across all of its brands. It is now shifting product development,
management and manufacturing efforts to focus on achieving best
in-class product quality and reliability. In addition, CNH intends to
introduce greater differentiation between its brands to increase
their market attractiveness.The Sector will action these plans by
optimising research and developments expenses, through the
continued use of common architectures, the development of
engines through joint ventures and introducing new engines that
meet tightening emissions standards.
Improved product quality and reliability should lead to future
reductions in warranty costs and create wider appreciation of
CNH products.
Case IH and New Holland are also responding to customer interest
in the use of bio-fuels and fuel efficiency.In 2005 its brands haveled
the wayin the agricultural industry with the first common rail fuel
injection to be utilized in agricultural tractors. In connection with
the expanded use of Bio-Diesel in farming, which is also encouraged
by government subsidies in various countries, Case IH and New
Holland agricultural machinery offer unaltered performance level
with the use of RME blends up to 20%, provided that recommended
maintenance and service requirements are met.