Chrysler 2006 Annual Report Download - page 36

Aggregates Manager, a North American publication,
recognised Case Construction with its “Top Rollout” award
for the new E Series wheel loaders and the CX700 excavator.
New Holland Construction launched pilot controls on skid steer
loaders and compact track loaders in North America to
enhance ease of operation and manoeuvrability. New Holland
Construction’s new Tier 3 wheel loaders, launched in North
America and Europe, offer new cabs with greater top visibility
during loading operations. Construction Equipment Magazine
also included New Holland’s E215-ME excavator and its entire
backhoe product line in its “Top 100 Products for 2006”.
Meanwhile, Case New Holland won strong acclaim from
industry observers with its spring announcement to the
National Biodiesel Board that it fully approves use of up to
B20 blends (20% biodiesel/ 80% petroleum-based diesel) on all
agricultural equipment currently produced with CNH engines.
Services
By refocusing efforts on their dealers and customers, CNH has
set the stage for continued future improvements. In particular:
■Case IH laid the groundwork to better serve and improve
its dealer network, by launching the “Master Mechanic”
program to create technically competent field service team.
The program’s goal is to train and certify 11,000 dealer
technical service technicians;
■New Holland took steps to raise service and support levels
during the harvesting season, introducing 24/7 parts and service
coverage during the season, thereby reducing unit down time;
■In December, New Holland Construction Equipment
launched the Dealer Mechanics Council for Service & Quality
Optimization. The group’s purpose is to establish direct
two-way communication with manufacturing to validate
and promote quality and reliability.
Report on Operations CNH 69
Agricultural and Construction Equipment
CNH-Case New Holland
Report on Operations CNH68
Operating Performance
In 2006, the worldwide market for agricultural equipment
reported contrasting trends for the main products and across
the various regions. Demand for tractors increased 9% overall
as a result of extremely positive performances (+25%) in Rest
of the World markets, more modest growth in Western Europe
(+3%), Latin America (+1%), and a 3% contraction on the North
American market. The combine market continued its negative
trend and contracted 7% overall from 2005.
CNH overall deliveries of tractors decreased from 2005, also a
result of actions to reduce dealer inventories. In particular,the
most significant decline was reported in North America, where
volumes were also influenced by market softness. Conversely,
deliveries improved sharply in Latin America and were stable
in Western Europe. CNH overall market share decreased
slightly while, at the single area level, an improvement was
reported in Latin America. CNH deliveries of combines to the
network declined overall: against the backdrop of an
unfavourable market environment, decreases were reported
in the Americas and in Western Europe; only Rest of the World
countries bucked the trend reporting higher volumes with
respect to 2005. CNH overall market share was up thanks to
an increased penetration of the North and Latin American
markets.
In 2006, the global market for construction equipment grew
11% overall from 2005. Demand for loader backhoes increased
by 7% thanks to significant increases in Latin America (+37%)
and Rest of the World countries (+33%), in part offset by a
decline in North America (-13%) and Western Europe (-2%).
Worldwide market demand for skid steer loaders was down
6% due to a decline in North America (-13%), against positive
performances in other areas: Latin America (+30%), Rest of the
World countries (+19%) and Western Europe (+3%). Demand
for heavy equipment was up 14%, with increases of 24% in
Latin America, 3% in North America, 13% in Western Europe
and 23% in Rest of the World countries.
In 2006, CNH benefited from rising demand, increasing
deliveries of construction equipment at a rate consistent
with or higher than that of the market in the various regions,
with the exception of North America, where decreases were
reported for all the main product lines. The Sector’s global
market share was unchanged from 2005, with increases in
Latin America for all the main product lines.
Innovation and Products
In 2006 CNH made significant progress to renew and upgrade
its product line by introducing new models, within the
framework of the reorganisation of its operations into four
distinct global brand structures, which started at the end of
2005 and became fully operational in 2006.
In the agricultural equipment segment, Case IH launched
a number of new four wheel drive products equipped with
Tier 3 engines: six new models up to 530 engine HP and four
new models of the Magnum series up to 305 engine HP for
which The Chicago Athenaeum Museum of Architecture and
Design, awarded the company’s industrial design firm and
two of its engineers the 2006 Good Design Award for the
new styling.
The Case IH Axial-Flow 2388 combine and its edible bean kit
were the runaway gold medal winners of the Outstanding
Category in Brazil’s 2006 Gerdau Melhores da Terra contest.
Bolstered by launches of the CR and CSX combines in Europe,
New Holland again confirmed its leading position in the
combine market.
In the construction equipment segment, Case Construction
Equipment launched new Tier 3 wheel loaders and dozers
featuring more spacious cabs and improved operating systems
boosting productivity and fuel efficiency. The Case
Construction Equipment’s E Series wheel loaders and
420CT /440CT compact track loaders were named in
Construction Equipment Magazine’s “Top Products for 2006”.
Highlights
(in millions of euros) 2006 2005
Net revenues 10,527 10,212
Trading profit 737 698
Operating result (*) 592 611
Investments in tangible and intangible assets 394 255
-of which capitalised R&D costs 79 40
Total R&D expenses (**) 289 234
Employees at year-end (number) 25,335 25,420
(*) Including restructuring costs and unusual income (expenses).
(**) Including R&D capitalised and charged to operations.