Chrysler 2006 Annual Report Download - page 37

Report on Operations Iveco 71
In Eastern Europe, Iveco’s market share (GVW > 2.8 tons) rose
to 11.8% in 2006 (+0.1 percentage points). Its market share
rose in the medium-vehicle segment, while remaining stable
in the light-vehicle segment and contracting slightly in the
heavy-vehicle segment.
The market share of Irisbus in Western Europe, 20.6% in 2006,
rose 0.3 percentage points from 2005. In particular,its market
share rose in France (+2.7 percentage points) and Germany
(+1.3 percentage points), while remaining largely stable in Italy
and falling in Spain (-1.2 percentage points) and Great Britain
(-0.9 percentage points).
In 2006, Iveco delivered a total of 181,500 vehicles, including
17,600 with a buy-back commitment, achieving growth of 5.2%
from the previous year. In Western Europe, 135,100 vehicles
were delivered, for an increase of 3.2% from 2005. At the
individual country level, Germany and Spain reported
significant increases (for the light and heavy vehicle segments
in Germany and for heavy vehicles in Spain), while Italy and
Great Britain, partly due to their soft markets, reported
decreases in all segments (the decline in sales was
concentrated in the light and heavy vehicle segments).
Outside Western Europe, sales volumes were up sharply
in Eastern Europe, rising in Africa and the Middle East, and
virtually stable in Latin America.
Iveco delivered a total of 9,300 buses, marking a 9.4%
improvement over 2005.
In China, Naveco, the 50-50 joint venture with the NAC Group
(Nanjing Automotive Corporation), sold approximately 20,000
light vehicles (+11% from 2005). In Turkey, the licensee Otoyol
sold 5,200 units (in line with 2005 results).
In August 2006, Iveco sold its entire shareholding in Machen-
Iveco Holding S.A., which controlled 51% of the Indian
company Ashok Leyland Ltd.
Iveco gave significant impetus to its growth strategy in 2006,
especially in China.
In September, Iveco signed an agreement with SAIC Motor
Corporation Ltd and Chongqing Heavy Vehicle Group Co. Ltd
to establish a joint venture in the field of heavy commercial
vehicles. On the basis of this agreement, Iveco and SAIC set
up a 50-50 joint venture named SAIC Iveco Commercial Vehicle
Investment Company Ltd, for the acquisition of a 67% share
of the capital of Chongqing Hongyan Automotive Co. Ltd,
controlled by the Chongqing Heavy Vehicle Group.
In September,Iveco signed a joint venture agreement with
NAC, according to which Naveco will acquire all of the
commercial vehicle activities of the Yuejin Motor Company,
a subsidiary of NAC. This acquisition falls within the scope
of Iveco’sstrategy to offer a complete range of commercial
vehicles in China.
Trucks and Commercial Vehicles
Iveco
Operating Performance
Since January 1, 2006, Iveco powertrain activities have been
included in the Fiat Powertrain Technologies Sector. As
envisaged in IAS 14 – Segment Reporting, the figures for
2005 have consequently been reclassified by excluding the
powertrain activities from Iveco and allocating them to FPT.
In 2006, demand for commercial vehicles in Western Europe
(GVW > 2.8 tons) totalled 1,132,300 units, up 2.3% from 2005.
On the principal markets, demand rose in France (+3.6%) and
Germany (+3.2%), while contracting slightly in Italy (-1.9%),
Great Britain (-1.1%), and Spain (-0.2%).
The light-vehicle segment (GVW of between 2.8 and 6 tons)
grew by 1.8% from 2005. Among the main countries, a market
increase was reported in France (+6.4%), while in Great Britain
the market remained stable with virtually the same volumes as
2005, and it contracted in Italy (-2.8%), Germany (-0.6%), and
Spain (-1.2%).
Demand for medium-vehicles (GVW of between 6.1 and 15.9
tons) was also up (+1.9%) from 2005. This improvement was
influenced principally by the German market (+7.4%) and
Spanish market (+2.3%). Demand fell on the British (-8.2%),
Italian (-3.4%), and French (-2.3%) markets.
Demand for heavy-vehicles (GVW >16 tons) rose by 3.7%
from the previous year. The greatest increase was reported
in Germany (+11.9%); modest growth was reported in Spain
(+1.9%) and Italy (+1.5%), while demand fell in France (-3.9%)
and Great Britain (-2.7%).
Report on Operations Iveco70
In 2006, the demand for commercial vehicles in Eastern Europe
(GVW >2.8 tons) rose to 114,000 units (+23.7% from 2005).
The most significant increase was reported for the heavy-
vehicle segment (+36.3% from 2005).
The Western European bus market remained at substantially
the same level as in 2005 (34,600 units), due to offsetting
between the increases in France (+7.5%) and Germany (+6.9%)
and the decreases in Spain (-7.4%), Italy (-3.9%), and Great
Britain (-2.6%).
The market share of Iveco in Western Europe (GVW > 2.8 tons)
was 10.7% (-0.2 percentage points from 2005). Its share of the
light-vehicle segment was 9.1% (-0.2 percentage points). The
Daily confirmed its position as the absolute leader in the 3.5
ton segment, with 17% of the market. In the medium-vehicle
segment (Eurocargo), Iveco’s share, while contracting by 0.9
percentage points, was still 25.4%, confirming the Sector’s
position as co-leader on the European market. In the heavy-
vehicle segment, Iveco’s market share was 10.9% (11.1% in 2005).
Highlights
(in millions of euros) 2006 2005
Net revenues 9,136 8,483
Trading profit 546 332
Operating result (*) 565 212
Investments in tangible and intangible assets (**) 342 321
-of which capitalised R&D costs 88 115
Total R&D expenses (***) 174 211
Employees at year-end (number) (****) 24,533 24,323
(*) Including restructuring costs and unusual income (expenses).
(**) Net of vehicles sold with buy-back commitments.
(***) Including R&D capitalised and charged to operations.
(****) Excluding employees of the powertrain activities conveyed in FPT
(8,256 at December 31, 2006 and 8,050 at December 31, 2005).
Sales Performance
Trucks and Commercial Vehicles sold by Country
(in thousands of units) 2006 2005 (*) % change
-France 25.9 25.6 1.1
-Germany 20.3 16.8 21.0
-Great Britain 15.0 16.6 -9.9
-Italy 36.0 37.9 -5.1
-Spain 20.6 19.3 7.1
-Other Western European Countries 17.3 14.8 17.5
Western Europe 135.1 131.0 3.2
Eastern Europe 19.7 15.8 25.0
Rest of the World 26.7 25.7 3.5
Total units sold 181.5 172.5 5.2
Naveco 20.0 18.0 11.1
Other associated companies (**) 5.2 64.8 n.s.
Grand total 206.7 255.3 n.s.
(*) Figures for 2005 present a break-down by country different from the one published in the
2005 Annual Report as a result of an allocation of deliveries modified according to the
criterion adopted for 2006.
(**) Units sold by the Indian company Ashok Leyland are no longer included as it was sold in
August 2006. The 2005 figure included 59,600 units sold by said company.
Sales Performance
Trucks and Commercial Vehicles sold by Product Segment
(in thousands of units) 2006 2005 %change
Heavy 45.2 42.8 5.6
Medium 21.8 21.3 2.3
Light 100.6 95.7 5.1
Buses 9.3 8.5 9.4
Special purpose vehicles (*) 4.6 4.2 9.5
Total units sold 181.5 172.5 5.2
(*) Astra, Defence and Fire-fighting vehicles.
Trucks and Commercial Vehicles Market (GVW ≥2.8 tons)
(in thousands of units) 2006 2005 % change
France 200.7 193.8 3.6
Germany 246.0 238.3 3.2
Great Britain 194.4 196.6 -1.1
Italy 120.2 122.6 -1.9
Spain 118.3 118.4 -0.2
Other Western European Countries 252.7 237.6 6.4
Western Europe 1,132.3 1,107.3 2.3
Trucks and Commercial Vehicles Market (GVW ≥2.8 tons)
(in thousands of units) 2006 2005 % change
Heavy 260.2 250.8 3.7
Medium 80.6 79.1 1.9
Light 791.5 777.4 1.8
Western Europe 1,132.3 1,107.3 2.3