Chrysler 2012 Annual Report Download - page 39

38
Following is a brief description of the main risks and uncertainties that could potentially have a significant impact on
the activities of Fiat S.p.A and its subsidiaries, which include Chrysler since June 2011. Other risks and uncertainties,
which are currently unforeseeable or considered to be unlikely, could also have a significant influence on the operating
performance, financial position and future prospects of the Fiat Group.
Risks associated with global financial markets and general economic conditions
The Group’s earnings and financial position may be influenced by various macroeconomic factors – including
increases or decreases in gross domestic product, the level of consumer and business confidence, changes in
interest rates on consumer and business credit, energy prices, the cost of commodities or other raw materials
and the rate of unemployment – within the various countries in which it operates.
Beginning in 2008, global financial markets experienced severe disruptions, resulting in a material deterioration
of the global economy. The global economic recession in 2008 and 2009, which affected essentially all regions
and all business sectors, resulted in a sharp decline in demand for automobiles. Although 2010, 2011 and
2012 showed signs of a slow-paced global economic recovery, the overall global economic outlook remains
uncertain.
In Europe, despite the measures taken by several governments, international and supranational organizations
and monetary authorities to provide financial assistance to Euro-zone member states and to recapitalize certain
European banks in economic difficulty and to prevent the possibility of default by certain European countries
on their sovereign debt obligations, concerns persist regarding the debt burden of certain Euro-zone countries,
including Italy, and their ability to meet future financial obligations, as well as the overall stability of the euro
and the suitability of the euro as a single currency given the diverse economic and political circumstances in
individual member states of the Euro-zone. These ongoing concerns could have a detrimental impact on the
global economic recovery, as well as on the financial condition of European institutions, which could result in
greater volatility, reduced liquidity, widening of credit spreads and lack of price transparency in credit markets. In
addition, widespread austerity measures in Europe and in any other countries in which the Group operates could
continue to adversely affect consumer confidence, purchasing power and spending, which could adversely
affect the Group’s business prospects, earnings and financial position.
In addition, the lower pace of expansion is currently seen not only in advanced economies, but also in major
emerging countries, such as China, Brazil and India. In addition to weaker export business, lower domestic
demand also led to a slowing economy in these countries. All these potential developments could adversely
affect the businesses and operations of the Group.
Main Risks and Uncertainties
to which Fiat S.p.A. and
its Subsidiaries are Exposed
Main Risks and
Uncertainties to
which Fiat S.p.A.
and its Subsidiaries
are Exposed
Report on
Operations