Chrysler 2009 Annual Report Download - page 46

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RISKS ASSOCIATED WITH ENVIRONMENTAL AND OTHER GOVERNMENT REGULATION
The Group’s products and activities are subject to numerous environmental laws and regulations (local, national and international) which are
becoming increasingly stringent in many countries in which it operates (particularly in the European Union). Such regulations govern, among other
things, products – with requirements for emissions of polluting gases, fuels and safety becoming increasingly stricter – and industrial plants – with
requirements for emissions, treatment of waste and water and prohibitions on soil contamination. The Group expects it will continue to incur
substantial costs in order to comply with such regulations.
In addition, government initiatives to stimulate consumer demand for products sold by the Group, such as changes in tax treatment or purchase incentives
for new vehicles, can substantially influence the timing and level of revenues. The size and duration of such government measures is unpredictable and
outside of the Group’s control. Any adverse change in government policy relating to those measures could have a material adverse effect on the Group’s
activities and future prospects, as well as its earnings and financial position.
RISKS ASSOCIATED WITH THE ABILITY TO OFFER INNOVATIVE PRODUCTS
The success of the Fiat Group’s businesses depends on their ability to maintain or increase share in existing markets and/or to expand into new markets
through the development of innovative, high-quality products that are adequately profitable. In particular, failure to develop and offer innovative products
that compare favourably to those of the Group’s principal competitors in terms of price, quality, functionality and features, or delays in bringing strategic
new models to market, could result in reduced market share, having a significantly material adverse effect on the Group’s earnings and financial position.
RISKS ASSOCIATED WITH OPERATING IN EMERGING MARKETS
The Fiat Group operates in a number of emerging markets, both directly (e.g., Brazil and Argentina) and through joint ventures and other cooperation
agreements (e.g., Turkey, India, China and Russia). The Group’s exposure to these countries has increased in recent years. Economic and political
developments in emerging markets, including economic crises or political instability, could have a material adverse effect on the Group’s activities and future
prospects, as well as its earnings and financial position.
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Fiat S.p.A., as Parent Company of the Group, is exposed in substance to the same risks and uncertainties as those described above for the Group.