Chrysler 2009 Annual Report Download - page 8

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With that same objective, we also laid the groundwork for other alliances.
In July 2009, an agreement was signed with Guangzhou Automobile Group for the establishment of a 50/50 joint venture in China which, beginning
in mid-2011, will produce engines and passenger cars for the local market. Once fully operational, the plant will have a production capacity of 140
thousand vehicles and 220 thousand engines per year.
A letter of intent was signed in February 2010 with the Russian automaker Sollers and represents a springboard for Fiat’s presence in that market,
one of the most promising. The proposed partnership will provide us the capability to produce up to 500,000 vehicles per year by 2016 and to sell
nine new models, six of which are to be based on a Fiat-Chrysler platform. This deal further underscores the level of technological advancement we
have reached and represents an enormous step forward for the Fiat Group in Russia, which will position us, within just a few years, as the number 2
automaker in that market.
Also in Russia, CNH has entered into an agreement with Kamaz, the leading producer of heavy trucks locally and one of the largest globally. At the end
of 2009, a letter of intent was signed for the creation of an industrial and commercial joint venture that will further strengthen CNH’s leading position
in the Russian agricultural and construction equipment market.
As for the Group’s future prospects, 2010 is expected to be a year of transition in which our core markets will continue to experience a relatively
high degree of difficulty.
Despite this, we expect performance for all Group businesses to improve over 2009 levels as global macro-economic conditions return to normality,
with the exception of the Automobiles and Components businesses, which will nevertheless make positive contributions.
While trading conditions will continue to be uncertain and volatile, the worst has passed and we can now begin thinking more calmly about the future
and planning for growth.
In fact, in Turin on the 21st of April, we will present details of the Group’s business plan to the international financial community, including annual
strategic targets for each Sector up to 2014.
At this point, we can confirm that we will continue to manage our activities with the same rigour - leveraging on the experience gained from the crisis
- and pursue targeted alliances when favourable opportunities present themselves.
In 2010, our capital expenditure programs, which had been reduced last year in response to the uncertainty of the demand curve and the tightening
of financial markets, will return to normal levels for all Sectors, increasing 30-35% over 2009.
Targets for this year have been influenced by the non-renewal of eco-incentives for new car purchases in Italy, which will have a significant impact on Group results.
We expect to close 2010 with revenues of approximately €50 billion, trading profit between €1.1 and €1.2 billion, net profit near break even and net
industrial debt above €5 billion.
The Group will, in any event, have more than adequate resources to transition to what is expected to be a normalised trading environment in 2011
and later years.
While working on achievement of these objectives, all of our actions will be geared toward ensuring the right equilibrium between industrial logic and
social responsibility.
That commitment is not a fair weather commitment, but one we have embraced with great conviction.
It is a responsibility that we exercise on several fronts: the environment and sustainable mobility, which has led to us being the most eco-performing
producer in Europe; attention to the needs of individuals, both inside and outside the company; and, a conduct guided by ethics and transparency.
In 2009, our efforts to ensure the Group is managed in line with international best practice were recognised with the inclusion of Fiat in the Dow Jones Sustainability
World and Dow Jones Sustainability STOXX indexes, the most prestigious equity indexes that only admit companies which are sustainability leaders.
News of this recognition was gratifying, because it demonstrates that behind the results there is a serious commitment, an entire corporate culture,
and a responsible approach to management.
This is the path we committed to in 2004, convinced that it is the only path which gives merit and dignity to any result.
16 February 2010
/s/ Luca Cordero di Montezemolo /s/ Sergio Marchionne
Luca Cordero di Montezemolo Sergio Marchionne
CHAIRMAN CHIEF EXECUTIVE OFFICER