Chrysler 2006 Annual Report Download - page 34

Innovation and Products
After the introduction of numerous new models in 2005,
signalling implementation of the strategy to modernise
and improve Fiat Auto’s products, 2006 was marked by
the introduction of new models that rounded out the lines
of models offered by Fiat, Lancia, and Alfa Romeo.
At Fiat,the number of Panda models (this is the top-selling
segment A model in Europe) continued growing. The Panda
Hydrogen was presented in February,as the prototype of an
alternative fuel vehicle. In October,the model year and the
typically sporty 100 HP version were presented.
In March 2006, the diesel version of the Sedici was presented
and in December this version propelled the SUV to the top of
the rankings for the best-selling 4x4 in Italy.
Apreview presentation of the Fiat Linea was held in October.
This model made its first official appearance at the Istanbul
Motor Show in November. Produced by Tofas, it will go on
sale in the first half of 2007. This car will enable the Fiat brand
to establish a presence in the high-range C segment for sedans
in Turkey and in the other countries where it will be sold.
After the preview at the end of October, the Bravo was
launched in Rome on January 31, 2007. This is the new model
with which the Fiat brand intends to regain top positions in the
medium-size segment, which is the most important in Europe.
This car combines technology and beauty.Highly stylised, it
was designed with great attention to safety and equipped with
top-rated engines in terms of environmental friendliness and
performance. Together with this new model, also the new
trademark was presented. This trademark will appear on all
new Fiat models, starting from the Bravo.
Two special events that occurred in 2006 also merit mention.
The first was the presentation of the new Mirafiori Motor
Village at the end of May. This company-owned dealership
was created in the Mirafiori premises, signalling the adoption
of a new philosophy that will soon be exported outside Italy.
The second event was the joint presentation with Ikea of the
new interior designs of Fiat dealerships: a young, innovative,
and functional style that combines simplicity of use for the
customer and a consistent image at various dealerships.
Report on Operations Fiat Auto64
Alfa Romeo started selling the Alfa 159 Sportwagon in
February 2006, joining the sedan introduced at the end of 2005.
The Alfa Spider was voted “Cabrio of the Year 2006” at its
Geneva Motor Show preview. This was followed by its
presentation to the press in June. Sales of the Q2 versions of
the 147 and the GT started in January 2007. This version has
a two-wheel drive that offers greater stability and road hold,
comparable to a four-wheel drive. Finally,the diesel version
of the Alfa Spider is scheduled for launch in March 2007.
At the end of November,Lancia celebrated the brand’s100th
anniversary. Tomark the occasion, all Lancia models were
also sold in a particularly rich and exclusive centenary version.
The New Ypsilon was rolled out at the end of September, after
being previewed at the beginning of September (on the
occasion of the Venice International Film Festival). The new
Delta was also previewed at that festival, in anticipation of its
debut in 2008.
There were major new product roll-outs at Fiat Light
Commercial Vehicles as well. The New Ducato was introduced
in May. It is destined to continue the success of a very popular
model both inside and outside Italy. The New Scudo, which is
produced at the Sevel Nord plant in Valenciennes, France, was
introduced in November and started being sold in January
2007.
Product development activities were focused principally on
the completion of several minor changes for the Panda, Grande
Punto, and Ypsilon, completion of development of the New
Ducato, development of the Bravo, Croma FL, Fiat 500, Linea,
and Minicargo, and the start of development on the new Alfa
147 and Delta HPE.
Research and development was also carried out on
components for future application, including engines and
transmissions.
Financial Services
In 2006, the financial services companies of the Sector saw the
establishment of the partnership between Fiat Auto and the
Crédit Agricole group at the end of December.This agreement
involved the creation of a 50-50 joint venture, named Fiat Auto
Financial Services, for the management of financing activities
In the renting business, Leasys, which operates in the
company fleet segment, realised an operating turnaround
in 2006, reaping the fruits of a major corporate reorganisation
and restructuring. The company wrote over 33,000 new
contracts, up significantly from 2005 due to the renewal
of two major contracts with institutional customers.
Savarent consolidated its role as captive company operating
through the network of Fiat Auto dealerships. Its products are
offered primarily to small and medium-sized businesses and
individuals. In 2006 the company also wrote over 18,000 new
contracts, up 20% from 2005.
If the segment’s foreign companies are also counted, a total of
60,100 contracts were written, up 52% from 2005. The Sector’s
proprietary car fleet totalled over 134,000 units at December
31, 2006, down 7% from 2005 as a result of the policy
implemented to focus on a higher profitability of the business.
Effective February 1, 2007, Fiat Auto changed its name to “Fiat
Group Automobiles S.p.A.”
Concurrently,four new companies were formed, 100% owned
by Fiat Group Automobiles S.p.A.: “Fiat Automobiles S.p.A.,”
“Alfa Romeo Automobiles S.p.A.,” “Lancia Automobiles
S.p.A.,” and “Fiat Light Commercial Vehicles S.p.A.”. Their
productive activities and personnel will remain part of Fiat
Group Automobiles S.p.A.
These changes are consistent with the new corporate culture of
the Fiat Group. In particular,they reflect two strategic choices
of how it approaches the business: on the one hand, the unity
of the Group, and on the other hand, the specific
characteristics of the operating sectors and individual brands.
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in Europe offered to Fiat Auto dealerships, end customers
who opt for instalment payment plans, as well as leasing
and medium and long-term rental services. This alliance
with a major European bank group will enable the financial
companies of the Sector to guarantee the level of fund
necessary for the development of services at primary
conditions. It will also make it possible to revive integrated
management of the three lines of activity (dealership financing,
retail auto financing and car rental), which is fundamental
to winning the loyalty of Fiat Auto customers.
In more detail, the transaction is broken down as follows: Fiat
Auto, upon exercise of its call option, purchased from Synesis
Finanziaria 51% of Fidis Retail Italia (a company controlling the
Fiat Auto European retail financing activities) which then
changed its corporate name into Fiat Auto Financial Services.
FAFS acquired certain Fiat Auto subsidiaries active in the
European long-term renting and Fiat Auto dealer financing.
Fiat Auto sold to Sofinco, the wholly owned consumer credit
subsidiary of Crédit Agricole, 50% of the share capital of FAFS.
In the dealership financing segment, the Sector’sfinancial
companies handled loans totalling approximately 12,400
million euros (9,810 million euros in 2005). When combined
with other financing instruments available to provide financing
support to the dealer network, these operations generated
average financing of approximately 3,580 million euros (3,150
million euros in 2005). The increase in volumes reflects the
increase in sales reported on most of the markets.
In the supplier financing segment, a total of approximately
1,980 million euros in loans were handled (3,670 million euros
in 2005), generating an average financing of 260 million euros
in 2006 (560 million euros in 2005). This decrease was related
to the company decision to reduce its commitment to that
activity.