Chrysler 2013 Annual Report Download - page 11

10 Letter from the Chief Executive Officer
In Canada, we recorded 49 straight months of growth and reconfirmed our position as the number two selling automaker, posting our strongest
annual sales performance in 13 years.
In LATAM, we registered positive results, although below the prior year’s level primarily as a result of negative currency impacts, principally the
weakening of the Brazilian Real, input cost inflation for the Brazilian operations and initial start-up costs for the new Pernambuco plant.
The year-over-year comparison for LATAM is also against a record 2012, when the Group demonstrated exceptional flexibility in responding to
a sharp increase in demand in Brazil following the introduction of government incentives.
Despite the above, the Group continued to be the market leader in Brazil, a position we have held for 12 years, with a 270 basis point lead over
our nearest competitor.
In Argentina, sales were up 31% and market share increased 140 basis points.
In APAC, the Group posted strong earnings on the back of significant volume growth.
Retail sales in the region, including JVs, were up 73% – significantly outpacing industry growth of around 9% for the year.
In China, the Fiat Viaggio continued to gain momentum and it is now the Group’s best-selling model in the region. In India, where the distribution
network is now fully owned and operated by the Group, volumes were up 41% for the year. In Australia, we posted the industry’s best year-
over-year performance, up 53%.
In EMEA trading conditions remained extremely weak with the industry in Europe registering its sixth straight year of decline.
Despite market conditions, however, losses in EMEA were reduced to €470 million, representing a €233 million improvement over 2012, due
in large part to a better product mix, driven primarily by the early success of the commercial strategy centered around the 500 family, as well
as increased cost efficiencies achieved during the year.
In addition, the premium strategy announced in 2012 in response to difficult market conditions has yielded promising initial results.
The first fruits of this decision to expand into the more profitable premium end of the market are evident in Maserati’s outstanding results.
The brand closed the year with a particularly strong fourth quarter following the introduction of the new Ghibli in October, building on the
success of the new Quattroporte launched in March. For the full year, vehicle shipments were up 148%, revenues up 120%, trading profit up
€114 million to €171 million and trading margins exceeded 10%.
Ferrari also turned in an excellent performance. Despite production volumes being held below the 2012 level to preserve the brand scarcity and
exclusivity, revenues were 5% higher at €2.3 billion and trading profit was up 9% to €364 million with trading margins increasing to 15.6%.
On the production front, we continued in our commitment to World Class Manufacturing standards at Group plants worldwide, achieving further
quality improvements in products and processes.
As evidence of that commitment, the plants in Pomigliano d’Arco (Italy), Tychy (Poland) and Bursa (Turkey) all achieved WCM Gold level during
2013 and in Chrysler we began to introduce WCM into suppliers’ locations.
With regard to the near-term outlook, the Group will be presenting an updated business plan in early May 2014 to provide increased visibility
on the Group’s strategic direction and execution priorities.
We have already given guidance for the current year, with expected revenues of around €93 billion, trading profit in the €3.6-€4.0 billion range
and net profit of €0.6-0.8 billion. The net industrial debt target in the €9.8 billion to €10.3 billion range takes into account the €2.7 billion
payment to the VEBA Trust in January 2014 to acquire the remaining 41.5% interest in Chrysler.