Fiat Group Automobiles

Fiat, Abarth, Alfa Romeo, Lancia, Fiat Professional e Jeep

Highlights

(€ million) 2011 2010
Net revenues
27,980 27,860
Trading profit/(loss)
430 607
Operating profit/(loss) (*)
1,876 515
Investments in tangible and intangible assets
2,367 1,652
of which capitalized R&D costs 642 529
Total R&D expenditure (**)
771 722
Passenger car and LCV shipments (units)
2,032,900 2,081,800
Employees at year end
59,714 57,611
(*) Includes restructuring costs and other unusual income/(expense) (**) Includes capitalized R&D and R&D charged directly to the income statement

Commercial Performance

FGA shipped5 a total of 2,032,900 passenger cars and light commercial vehicles (LCVs), down 2.4% over the prior year, with a decline in passenger car volumes being partially offset by an increase for LCVs.

In Europe, the passenger car market was down 1.4% overall to approximately 13.6 million vehicles, with performance uneven across markets. Demand in Germany was up 8.8% for the year, while in Italy the market was down 10.9% to 1.75 million units (the lowest level since 1996), following a 9.2% drop in 2010. Declines were also recorded in Spain (-17.7%) and the UK (-4.4%). In France, the market was down 2.1% for the year and contracted 8.6% in the fourth quarter. For other markets, demand was up in the Netherlands, Switzerland, Austria and Belgium, but down sharply in both Greece and Portugal.

For passenger cars only, FGA shipped 1,612,900 vehicles, a 4.6% decrease over 2010. In Europe, passenger car shipments were down 10.7% to 860,000 units as a result of a less unfavorable market and segment mix. The significant volume increase in Germany (+7.2%) only partially offset reductions in the other major markets – Italy (-12.4%), France (-15.8%), the UK (-1.9%) and Spain (-21.6%) – although gains were achieved in several of FGA’s smaller markets.

By brand, Lancia performed particularly well, with a 9.1% increase in shipments driven by the new Ypsilon, which contributed for the entire second half, as well as the Voyager and Thema, launched in November, making Lancia-Chrysler a full-liner in Europe. The Jeep brand shipped around 26,000 vehicles in Europe for the full year and, for Alfa Romeo, shipments were up 17.7% over the prior year to 132,400 units. Lower volumes for the Fiat brand reflected a disproportionate contraction in demand in its core markets/segments.

Passenger Car Market
(units in thousands)
2011 2010 %  change
France 2,204.2 2,251.7 -2.1
Germany 3,173.6 2,916.3 8.8
UK
1,941.3 2,030.8 -4.4
Italy 1,748.1 1,961.6 -10.9
Spain 808.1 982.0 -17.7
Polond 277.4 315.9 -12.2
Europe (UE a 27+EFTA)  13,573.6 13,768.4 -1.4
Brazil 2,709.0 2,695.4 0.5

FGA
Passenger Car and LCV Shipments by Market

 

(units in thousands) 2011 2010 % change
France 111.1 120.9 -8.1
Germany 123.8 107.8 14.8
UK
65.8 66.4 -1.0
Italy 558.5 625.6 -10.7
Spain 30.6 37.3 -17.9
Poland 28.6 34.7 -17.6
Rest of Europe 165.3 172.8 -4.3
Europe (UE a 27+EFTA) 1,083.7 1,165.5 -7.0
Brazil 772.7 761.4 1.5
Rest of World
176.5 154.9 13.9
Total Sales
2,032.9 2,081.8 -2.4
Associate companies
156.9 140.5 11.7
Grand Total
2,189.7 2,222.3 -1.5

In terms of market share in Europe, FGA recorded a 6.9% share for the year, representing a 0.8 percentage point decrease primarily attributable to the reduced weight of the Italian market and a shift in demand toward larger vehicle segments. The contraction in demand in the A and B segments in particular (-15% and -9%, respectively, compared to a 1.4% decline for the market overall) accounted for a 0.6 p.p. decrease in share. In addition, 2011 saw a 73% reduction in demand for CNG and LPG vehicles in Italy, where FGA is market leader, following on from an already significant decline in 2010.

In Italy, FGA’s share was 29.4%, down 0.9 p.p. for the year – primarily as a result of a 2.3 p.p. loss in Q1 2011 compared to Q1 2010, which benefited from the tail of eco-incentives – notwithstanding significant share increases in its three main market segments. There were modest declines in the other major European markets, with Germany down 0.1 p.p. to 3.1%, France -0.4 p.p. to 3.6%, the UK -0.2 p.p. to 3.0% and Spain -0.2 p.p. to 3.1%. Elsewhere in Europe, notable performance was achieved in the Netherlands, which, with approximately 37,000 vehicles sold6 and a share of 6.7%, has become FGA’s fifth largest European market.

The Fiat brand registered a 5.0% market share in Europe (-1.0 p.p. over 2010). The Fiat Panda and 500 retained the top two positions in the A segment, with the Fiat 500 gaining a further 0.8 p.p. in segment share and the new Panda to come fully on-line in the first quarter of 2012. The Lancia brand registered a 0.8% share of the European market (in line with 2010), with the contribution of the new Lancia Ypsilon compensating for a generally unfavorable trend in market demand. Alfa Romeo recorded sales of 130,500 vehicles, with the Giulietta driving the increase and marking the brand’s best ever performance in the C segment. The brand’s market share came in at 1.0% for the year.

For LCVs, demand in Europe was 7.6% higher for the year at nearly 1,800,000 units. Across major markets, demand was uneven with double-digit growth in Germany (+15.3%) and the UK (+15.3%), a more modest increase in France (+3.4%), but declines in both Italy (-4.7%) and Spain (-10.3%). Throughout the rest of Europe, demand was 12.6% higher for the year.

FGA shipped a total of 420,000 LCVs, representing a 7.6% increase over 2010. In Europe, 223,700 LCVs were shipped, representing a 10.5% increase over 2010, with double-digit increases recorded in the two largest European markets: France (+15.4%) and Germany (+28.9%). Volumes were also higher in the UK (+4.8%), Spain (+1.1%) and Italy (+0.7%), despite a 16.4% contraction in market demand in the final quarter. In the smaller European markets, FGA registered an 11.1% increase in shipments and significant share gains.

In terms of market share, Fiat Professional achieved a 0.4 p.p. gain in Italy to 44.4%. For Europe overall, share of the LCV market remained essentially stable at 12.5%7 (excluding Italy, share was up 0.2 p.p. to 9.0%). The primary contribution came from the Ducato, which recorded a 13.5% increase in sales over the prior year to 110,000 vehicles and the best ever share in its segment.

In Brazil, overall demand for passenger cars and LCVs rose 2.9% to more than 3.4 million units. Demand for passenger cars was in line with the prior year, while a 13% increase was registered for LCVs.

FGA shipped a total of 772,700 passenger cars and LCVs, representing a 1.5% increase over 2010 and an all-time annual record. Including Chrysler Group brands, share in Brazil was 22.2% (+1.8 p.p. over the nearest competitor). Fiat brand retained its leadership for the 10th consecutive year, while maintaining pricing discipline in an increasingly competitive market.

In Argentina, where the market was up approximately 29% year-over-year, FGA increased sales by around 34% to 88,000 units, with share up 0.4 p.p. to 10.8%.

In Turkey, following the boom recorded in 2010 (+36.6%), the market grew a further 13.6 percentage points to a total of 865,000 units for the year. By segment, passenger cars were up 16% and demand for LCVs grew 8%. FGA, through its joint venture Tofas¸ (held 37.9%), sold a total of 130,000 passenger cars and LCVs and increased market share to 15% (+0.4 p.p. overall; +0.8 p.p. for passenger cars only).

(5) “Shipments”: new cars & LCVs invoiced to external customers (i.e., dealer network, importers, rental companies, corporate fleets, government agencies and local authorities, etc.)

(6) “Sales”: sales to end customers based on official, non-official and internal sources considered reliable, including the following agencies: Italy - Ministero dei Trasporti; Brazil - Associaçao Nacional dos Fabricantes de Veiculos Automotores; France - Chambre Syndicale; Germany - Kraftfahrzeug Bundesamt; Spain - Direccion General de Trafico; the United Kingdom - Society of Motor Manufacturers and Traders

(7) Due to the unavailability of data since January 2011, figures for Italy are an extrapolation and, as a result, the EU total is subject to a margin of error

Innovation and Products

The Fiat brand confirmed its position as eco-leader in Europe for the fourth consecutive year with the lowest average CO2 emissions among the top selling brands for 2010 (down 4.7 g/km over 2009 to 123.1 g/km). Fiat was also first in the Group ranking, with average emissions down 5.1 g/km over the previous year to 125.9 g/ km (Source: JATO).

During 2011, Fiat brand presented two important new models, the Panda and Freemont.

The third generation Panda, presented at the Frankfurt Motor Show, boasts further enhancements in comfort, technology and safety – all packaged in an attractive modern exterior. The new model is available with a choice of highly fuel-efficient engines (3 gasoline and 1 diesel).

The Freemont, available throughout Europe since June and in Latin America since September, is the first Fiat brand vehicle based on a Chrysler platform to come out of the alliance with Chrysler Group.

In May, Fiat launched the new 500 TwinAir (both standard and cabriolet versions) in Europe. The “TwinAir” badge now designates an entire range of products that offer the innovative two-cylinder turbo engine. During the year, the Fiat 500 also received the “ADI Compasso d’Oro” (in the design award’s 22nd edition).

Alfa Romeo unveiled the captivating 4C Concept, a mid-engine, 2-seat compact “supercar”. The brand also released refreshed versions of the Giulietta and MiTo, most notable of which were the new 120 hp Giulietta 1.4 Turbo LPG and MiTo Turbo TwinAir. Alfa Romeo products received several awards during the year, including the compact category of “Die Besten Autos” awarded for the Giulietta by Auto Motor und Sport.

One year after beginning the integration of its product portfolio with Chrysler brand, Lancia launched 3 all-new models – the Ypsilon, Thema and Voyager – in addition to presenting the Flavia Cabrio, to be launched in Europe during 2012. The new 5-door Ypsilon, which combines luxury and technology, was offered in major European markets beginning in June 2011. In November, the brand launched the Lancia Thema and the Voyager.

During 2011, the Jeep brand presented a diesel-powered version of the Grand Cherokee, together with significantly refreshed versions of the legendary Wrangler and Wrangler Unlimited, as well as the Compass. All are available in Europe with a new turbo-diesel. At the Frankfurt Motor Show, Jeep premiered three additional products: the new Grand Cherokee SRT8, the fastest and most powerful Jeep model ever, equipped with the new 470 hp 6.4L HEMI® engine; the 284 hp 3.6L Pentastar V6 gasoline engine that will power the 2012 Jeep Wrangler and the Jeep Wrangler Unlimited; and the Jeep Wrangler Arctic, a special edition designed to tackle extreme terrain.

For Fiat Professional, May saw the launch of the new Ducato, the fifth generation of the best-selling van that has garnered numerous international awards and sold more than 2.2 million units since 1981.

Services

The recent economic downturn also had an impact on after-sales activity in most markets around the world.

The liquidity crunch and drop in consumer spending resulted in reduced demand for repairs and, consequently, spare parts leading to increased competition among service providers, as well as strong pricing and discounting pressures.

In response, a number of initiatives have been implemented throughout the network to maintain and increase customer loyalty, including improvements in levels of service. Those actions will continue in 2012 with the objective of increasing the contribution of after-sales activities to the profitability of the networks for FGA and Chrysler brands.

Distribution logistics is essential to maintaining competitiveness in an increasingly complex and demanding market, and a key lever in increasing business and ensuring customer satisfaction. Accordingly, as part of the World Class Logistics program, numerous measures have been put in place to optimize the logistics process. Chrysler’s spare parts distribution activities were also integrated with the FGA distribution network during the year.

Also in 2011, several initiatives were implemented throughout the service network to enhance customer satisfaction. The principal areas of focus were:

  • quality of service, through:

    • introduction of new tools such as the new WitechPlus diagnostic system for all FGA and Chrysler models
    • implementation of a qualification program for dealers’ front office staff
    • introduction of the Loan Tool Program, a simplified system for procurement of maintenance and repair equipment
    • extension, worldwide, of a new on-line technical database, which has been further enhanced in content as a result of the integration with Chrysler
    • launch of a new strategy for vehicle breakdown services, standardized throughout the European network, including provision of courtesy cars and extension of Roadside Assistance to 24 months
  • uniformity of service quality, through implementation of processes and standards throughout the aftersales network. This process also involved integration of the Chrysler network and included establishment of service agreements, and coaching and training by FGA personnel.
  • monitoring of service levels through customer feedback, including targeted interviews conducted by the Customer Service Center in Arese (Italy) to generate an indicator of the level of customer satisfaction with the service provided by the network.

The network’s satisfaction with services provided by FGA and its personnel is also measured and the technical support given and uniformity of that service has been further enhanced as a result of the integration with Chrysler.

The Customer Care service (handling of customer complaints and information requests) registered further improvements in its performance indexes. One of FGA’s key customer relationship tools is the Customer Service Center in Arese (Italy), which serves customers, prospective customers and employees for 18 brands in 20 markets throughout Europe. In 2011, the Center handled a total of 5 million contacts, while continuing to maintain high quality standards. This was achieved by further improving the integration between the Customer Services Center and the various entities involved in the case resolution process, and by strengthening the relationship with the network, which has been further facilitated by the introduction of customer care managers at dealerships. The process of getting closer to the customer has also been further strengthened by the Mobile Customer Care project, which utilizes innovative mobile communications channels to facilitate and manage the relationship with customers. Since launch in 2010, the project’s user base in major European markets has grown to around 150,000. Finally, at year-end 2011 the Customer Care Center had almost completed alignment of operating procedures for Fiat and Chrysler.

Fiat Group Automobiles offers financial services in Europe, Latin America and China directly through its financial services companies. In other major markets, Fiat Group sales activities are supported by vendor programs offered jointly with leading partner banks.

In Europe, financial services activities are managed by FGA Capital, a 50/50 joint venture with the Crédit Agricole group (accounted for under the equity method). FGA Capital supports the Group’s European sales activities with dealer financing, end-customer financing and medium and long-term rental. The collaboration with Crédit Agricole continued to perform effectively throughout 2011, meeting the Group’s expectations and commercial needs.

New loans to the dealer network totaled €15,166 million (€16,676 million in 2010). Retail financing was provided on 349,983 vehicles, representing a financed value of €5,008 million and a penetration rate of 20.0% on Group brand sales (2010: 427,429 vehicles, financed value of €5,670 million and 23.4% penetration rate for all Group brands).

There were new medium and long-term rental agreements on 53,410 vehicles, representing a financed value of €629 million and a penetration rate of 3.8% on Group brand sales (2010: 40,447 vehicle rentals, financed value of €493 million and 2.6% penetration rate for Group brands).

For Latin America and China, financial services are provided by Banco Fidis in Brazil, Fiat Credito Compania Financiera in Argentina and Fiat Automotive Finance in China. All three companies are subsidiaries of Fidis S.p.A. and also provide financing to end customers and the dealer networks of Iveco, CNH and their joint ventures in China.

In Italy, Fidis S.p.A. (a wholly-owned subsidiary of FGA) manages a factoring portfolio and issues guarantees on behalf of Fiat Group.

The average managed portfolio of Fidis and its subsidiaries was €2,627 million (€1,930 million in 2010), of which €1,305 million related to dealer financing, essentially in Brazil (€1,097 million in 2010), and €805 million to endcustomer financing (€449 million in 2010).

 

Interactive data

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