Chrysler 2009 Annual Report Download - page 85

REPORT ON
OPERATIONS
SUBSEQUENT
EVENTS
AND OUTLOOK
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SUBSEQUENT EVENTS AND OUTLOOK
SUBSEQUENT EVENTS
In February, Fiat S.p.A. and Sollers announced the establishment of a global alliance in the form of a joint venture for the production of passenger cars and
SUVs. The new JV is expected to reach total production capacity of up to 500,000 vehicles per year by 2016. Nine new models (C & D segment and SUV)
will be sold in the Russian market, six of which will be based on a new global Fiat-Chrysler platform. A minimum of 10% of the vehicles will be produced for
the export market. The Fiat/Sollers project will be based in Naberezhnye Chelny, located 1,000 km east of Moscow in the Republic of Tatarstan. Sollers’
current site in Naberezhnye Chelny will be expanded to include new production facilities and a technology park for component production. The Russian
Government is expected to provide support for the joint venture through subsidized long-term financing for the entire amount of investment required,
estimated at €2.4 billion.
OUTLOOK
After a particularly difficult 2009, with uneven trading conditions across the Group’s international scope of operations, 2010 is positioning itself as a year of
transition and stabilization.
The Group expects all of its Sectors to improve performance over the prior year, with the exception of the Automobiles business, the performance of which
will be impacted by the reduction of eco-incentive programs which underpin demand in Western Europe.
The Group’s forecasts include a continuation of the rigorous cost containment action initiated as early as the latter part of 2008, and which were implemented
vigorously throughout 2009.
The capital expenditure programs which formed part of the 2007-2010 industrial plan outlined to the financial community in November 2006 underwent a
severe contraction in 2009, in response to the uncertainty of the demand function for the Group’s various businesses and the tightening of credit markets.
This contraction is expected to ease in 2010, with the resumption of a normalized level of capital commitments across all Sectors, yielding a 30% to 35%
rise in expenditures over 2009.