Chrysler 2007 Annual Report Download - page 63

Report on Operations Significant Events Occurring since the End of the Fiscal Year and Business Outlook62
The agricultural equipment market is expected to grow in
North America, Europe and in Latin America and to remain flat
in the Rest of the World. High global commodity prices and low
levels of agricultural stocks will lead to strong net farm
incomes. Increasing demand for corn and sugar cane to
produce fuel ethanol continues to support equipment sales.
The construction equipment market is expected to grow in
Europe and in the Rest of the World, to be flat in Latin America
and to decrease in North America. In the United States, further
declines in residential construction should be partly offset by
higher non-residential and heavy construction activity. In North
America, housing starts are expected to continue declining but
will potentially stabilize later in the year; housing starts are
expected to be flat in Europe, Latin America and in the Rest of
the World.
In this context, CNH expects to achieve a strong improvement
in unit volume along with continuing market share gains.
Momentum of positive net pricing offsetting increases in
certain raw materials and components will continue.
In Western Europe, the market for light, medium and heavy
commercial vehicles is expected to keep on growing, notably in
the first half of the year. Central and Eastern European markets
are expected to grow about 15% compared to 2007.
In this environment Iveco aims at gaining market share thanks
to new products (Daily 4x4, Massif, New Eurocargo, and the
New Stralis and New Trakker launched in 2007) and is targeting
revenue growth due to price repositioning and higher volumes.
To achieve its targets, the Fiat Group will continue to push
group-wide purchasing synergies, intensifying and accelerating
development of best cost country sourcing, strengthening
strategic partnerships with suppliers through long term
contracts, and focusing on the implementation of World Class
Manufacturing initiatives.
The Group confirms its targets for 2008: trading profit between
3.4 and 3.6 billion euros, net income between 2.4 and 2.6
billion euros (earnings per share between 1.9 and 2.0 euros).
Consolidated net revenues are expected to amount to more
than 60 billion euros.
The Group expects to close the year again without industrial
debt, with a minimum of 1.5 billion euros of net cash on hand
(excluding the impact of share buy-backs).
While working on the achievement of these objectives, the Fiat
Group will continue to implement its strategy of targeted
alliances, in order to reduce capital commitments, and reduce
the related risks.
The Group’s expectations for 2008 are based on the
assumption that the current turbulence in financial markets will
have limited contagion impact on the real economy, and at
worst will be limited to the US market. There is a concern that
the current crisis of confidence being experienced in the capital
markets will spill over and begin to severely restrict
consumption on a global scale. The Group believes that such a
scenario is unlikely: nonetheless, if such conditions were to
effectively materialize, the Group believes that it would be able
to fully sustain the financial impact of a downward pressure on
demand, albeit with reduced operating performance and
margins.