Chrysler 2014 Annual Report Download - page 61

2014 | ANNUAL REPORT 59
Selling, general and administrative costs
For the Years Ended December 31, Increase/(decrease)
(€ million, except
percentages) 2014
Percentage
of net
revenues 2013
Percentage
of net
revenues 2012
Percentage
of net
revenues 2014 vs. 2013 2013 vs. 2012
Selling, general and
administrative costs 7,084 7.4% 6,702 7.7% 6,775 8.1% 382 5.7% (73) (1.1)%
2014 compared to 2013
Selling, general and administrative costs include advertising, personnel, and other costs. Advertising costs accounted
for approximately 44.0 percent and 43.0 percent of total selling, general and administrative costs for the year ended
December 31, 2014 and 2013 respectively.
Selling, general and administrative costs for the year ended December 31, 2014 were €7,084 million, an increase
of €382 million, or 5.7 percent, from €6,702 million for the year ended December 31, 2013. As a percentage of net
revenues, selling, general and administrative costs were 7.4 percent for the year ended December 31, 2014 compared
to 7.7 percent for the year ended December 31, 2013.
The increase in selling, general and administrative costs was due to the combined effects of (i) a €293 million increase
in advertising expenses driven primarily by the NAFTA, APAC and EMEA segments, (ii) a €157 million increase in other
selling, general and administrative costs primarily attributable to the LATAM and Maserati segments, and to a lesser
extent, the APAC segment which were partially offset by (iii) a reduction in other general and administrative expenses
in the NAFTA segment and (iv) the impact of favorable foreign currency translation of €68 million.
The increase in advertising expenses was largely attributable to the APAC and NAFTA segments to support the
growth of the business in their respective markets. In addition, advertising expenses increased within the NAFTA
segment for new product launches, including the all-new 2014 Jeep Cherokee and the all-new 2015 Chrysler 200.
There were additional increases in advertising expenses for the EMEA segment related to the Jeep brand growth and
new product launches, including the all-new 2014 Jeep Cherokee and Renegade. The favorable foreign currency
translation impact of €68 million was primarily attributable to the LATAM segment, driven by the weakening of the
Brazilian Real against the Euro.
The increase in other selling, general and administrative costs attributable to the Maserati segment has been driven
by the increase in volumes. The increase in other selling, general and administrative costs attributable to the APAC
segment was driven by volume growth in the region, while the increase in the LATAM segment includes the start-up
costs of the Pernambuco plant.
2013 compared to 2012
Selling, general and administrative costs for the year ended December 31, 2013 were €6,702 million, a decrease
of €73 million, or 1.1 percent, from €6,775 million for the year ended December 31, 2012. As a percentage of net
revenues, selling, general and administrative costs were 7.7 percent for the year ended December 31, 2013 compared
to 8.1 percent for the year ended December 31, 2012.
The decrease in selling, general and administrative costs was due to the combined effects of the positive impact of
foreign currency translation of €240 million, partially offset by a €102 million increase in personnel expenses, largely
related to the NAFTA segment, and an increase in advertising expenses of €37 million. In particular, advertising
expenses increased in 2013 due to the product launches in the NAFTA segment (2014 Jeep Grand Cherokee, the
all-new 2014 Jeep Cherokee and the all-new Fiat 500L), in the APAC segment (Dodge Journey) and the Maserati
segment (Quattroporte and Ghibli), which continued following launch to support the growth in their respective
markets, which were partially offset by a decrease in advertising expenses for the EMEA segment as a result of efforts
to improve the focus of advertising campaigns.