2006 Annual Report - Fiat SpA
2006 Annual Report - Fiat SpA
2006 Annual Report - Fiat SpA
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Trucks and Commercial Vehicles<br />
Iveco<br />
Operating Performance<br />
Since January 1, <strong>2006</strong>, Iveco powertrain activities have been<br />
included in the <strong>Fiat</strong> Powertrain Technologies Sector. As<br />
envisaged in IAS 14 – Segment <strong>Report</strong>ing, the figures for<br />
2005 have consequently been reclassified by excluding the<br />
powertrain activities from Iveco and allocating them to FPT.<br />
In <strong>2006</strong>, demand for commercial vehicles in Western Europe<br />
(GVW > 2.8 tons) totalled 1,132,300 units, up 2.3% from 2005.<br />
On the principal markets, demand rose in France (+3.6%) and<br />
Germany (+3.2%), while contracting slightly in Italy (-1.9%),<br />
Great Britain (-1.1%), and Spain (-0.2%).<br />
The light-vehicle segment (GVW of between 2.8 and 6 tons)<br />
grew by 1.8% from 2005. Among the main countries, a market<br />
increase was reported in France (+6.4%), while in Great Britain<br />
the market remained stable with virtually the same volumes as<br />
2005, and it contracted in Italy (-2.8%), Germany (-0.6%), and<br />
Spain (-1.2%).<br />
Demand for medium-vehicles (GVW of between 6.1 and 15.9<br />
tons) was also up (+1.9%) from 2005. This improvement was<br />
influenced principally by the German market (+7.4%) and<br />
Spanish market (+2.3%). Demand fell on the British (-8.2%),<br />
Italian (-3.4%), and French (-2.3%) markets.<br />
Demand for heavy-vehicles (GVW >16 tons) rose by 3.7%<br />
from the previous year. The greatest increase was reported<br />
in Germany (+11.9%); modest growth was reported in Spain<br />
(+1.9%) and Italy (+1.5%), while demand fell in France (-3.9%)<br />
and Great Britain (-2.7%).<br />
Trucks and Commercial Vehicles Market (GVW ≥ 2.8 tons)<br />
(in thousands of units) <strong>2006</strong> 2005 % change<br />
France 200.7 193.8 3.6<br />
Germany 246.0 238.3 3.2<br />
Great Britain 194.4 196.6 -1.1<br />
Italy 120.2 122.6 -1.9<br />
Spain 118.3 118.4 -0.2<br />
Other Western European Countries 252.7 237.6 6.4<br />
Western Europe 1,132.3 1,107.3 2.3<br />
70 <strong>Report</strong> on Operations Iveco<br />
Highlights<br />
(in millions of euros) <strong>2006</strong> 2005<br />
Net revenues 9,136 8,483<br />
Trading profit 546 332<br />
Operating result (*) 565 212<br />
Investments in tangible and intangible assets (**) 342 321<br />
- of which capitalised R&D costs 88 115<br />
Total R&D expenses (***) 174 211<br />
Employees at year-end (number) (****) 24,533 24,323<br />
(*) Including restructuring costs and unusual income (expenses).<br />
(**) Net of vehicles sold with buy-back commitments.<br />
(***) Including R&D capitalised and charged to operations.<br />
(****) Excluding employees of the powertrain activities conveyed in FPT<br />
(8,256 at December 31, <strong>2006</strong> and 8,050 at December 31, 2005).<br />
In <strong>2006</strong>, the demand for commercial vehicles in Eastern Europe<br />
(GVW > 2.8 tons) rose to 114,000 units (+23.7% from 2005).<br />
The most significant increase was reported for the heavyvehicle<br />
segment (+36.3% from 2005).<br />
The Western European bus market remained at substantially<br />
the same level as in 2005 (34,600 units), due to offsetting<br />
between the increases in France (+7.5%) and Germany (+6.9%)<br />
and the decreases in Spain (-7.4%), Italy (-3.9%), and Great<br />
Britain (-2.6%).<br />
The market share of Iveco in Western Europe (GVW > 2.8 tons)<br />
was 10.7% (-0.2 percentage points from 2005). Its share of the<br />
light-vehicle segment was 9.1% (-0.2 percentage points). The<br />
Daily confirmed its position as the absolute leader in the 3.5<br />
ton segment, with 17% of the market. In the medium-vehicle<br />
segment (Eurocargo), Iveco’s share, while contracting by 0.9<br />
percentage points, was still 25.4%, confirming the Sector’s<br />
position as co-leader on the European market. In the heavyvehicle<br />
segment, Iveco’s market share was 10.9% (11.1% in 2005).<br />
Trucks and Commercial Vehicles Market (GVW ≥ 2.8 tons)<br />
(in thousands of units) <strong>2006</strong> 2005 % change<br />
Heavy 260.2 250.8 3.7<br />
Medium 80.6 79.1 1.9<br />
Light 791.5 777.4 1.8<br />
Western Europe 1,132.3 1,107.3 2.3<br />
In Eastern Europe, Iveco’s market share (GVW > 2.8 tons) rose<br />
to 11.8% in <strong>2006</strong> (+0.1 percentage points). Its market share<br />
rose in the medium-vehicle segment, while remaining stable<br />
in the light-vehicle segment and contracting slightly in the<br />
heavy-vehicle segment.<br />
The market share of Irisbus in Western Europe, 20.6% in <strong>2006</strong>,<br />
rose 0.3 percentage points from 2005. In particular, its market<br />
share rose in France (+2.7 percentage points) and Germany<br />
(+1.3 percentage points), while remaining largely stable in Italy<br />
and falling in Spain (-1.2 percentage points) and Great Britain<br />
(-0.9 percentage points).<br />
In <strong>2006</strong>, Iveco delivered a total of 181,500 vehicles, including<br />
17,600 with a buy-back commitment, achieving growth of 5.2%<br />
from the previous year. In Western Europe, 135,100 vehicles<br />
were delivered, for an increase of 3.2% from 2005. At the<br />
individual country level, Germany and Spain reported<br />
significant increases (for the light and heavy vehicle segments<br />
in Germany and for heavy vehicles in Spain), while Italy and<br />
Great Britain, partly due to their soft markets, reported<br />
decreases in all segments (the decline in sales was<br />
concentrated in the light and heavy vehicle segments).<br />
Sales Performance<br />
Trucks and Commercial Vehicles sold by Country<br />
(in thousands of units) <strong>2006</strong> 2005 (*) % change<br />
- France 25.9 25.6 1.1<br />
- Germany 20.3 16.8 21.0<br />
- Great Britain 15.0 16.6 -9.9<br />
- Italy 36.0 37.9 -5.1<br />
- Spain 20.6 19.3 7.1<br />
- Other Western European Countries 17.3 14.8 17.5<br />
Western Europe 135.1 131.0 3.2<br />
Eastern Europe 19.7 15.8 25.0<br />
Rest of the World 26.7 25.7 3.5<br />
Total units sold 181.5 172.5 5.2<br />
Naveco 20.0 18.0 11.1<br />
Other associated companies (**) 5.2 64.8 n.s.<br />
Grand total 206.7 255.3 n.s.<br />
(*) Figures for 2005 present a break-down by country different from the one published in the<br />
2005 <strong>Annual</strong> <strong>Report</strong> as a result of an allocation of deliveries modified according to the<br />
criterion adopted for <strong>2006</strong>.<br />
(**) Units sold by the Indian company Ashok Leyland are no longer included as it was sold in<br />
August <strong>2006</strong>. The 2005 figure included 59,600 units sold by said company.<br />
Outside Western Europe, sales volumes were up sharply<br />
in Eastern Europe, rising in Africa and the Middle East, and<br />
virtually stable in Latin America.<br />
Iveco delivered a total of 9,300 buses, marking a 9.4%<br />
improvement over 2005.<br />
In China, Naveco, the 50-50 joint venture with the NAC Group<br />
(Nanjing Automotive Corporation), sold approximately 20,000<br />
light vehicles (+11% from 2005). In Turkey, the licensee Otoyol<br />
sold 5,200 units (in line with 2005 results).<br />
In August <strong>2006</strong>, Iveco sold its entire shareholding in Machen-<br />
Iveco Holding S.A., which controlled 51% of the Indian<br />
company Ashok Leyland Ltd.<br />
Iveco gave significant impetus to its growth strategy in <strong>2006</strong>,<br />
especially in China.<br />
In September, Iveco signed an agreement with SAIC Motor<br />
Corporation Ltd and Chongqing Heavy Vehicle Group Co. Ltd<br />
to establish a joint venture in the field of heavy commercial<br />
vehicles. On the basis of this agreement, Iveco and SAIC set<br />
up a 50-50 joint venture named SAIC Iveco Commercial Vehicle<br />
Investment Company Ltd, for the acquisition of a 67% share<br />
of the capital of Chongqing Hongyan Automotive Co. Ltd,<br />
controlled by the Chongqing Heavy Vehicle Group.<br />
In September, Iveco signed a joint venture agreement with<br />
NAC, according to which Naveco will acquire all of the<br />
commercial vehicle activities of the Yuejin Motor Company,<br />
a subsidiary of NAC. This acquisition falls within the scope<br />
of Iveco’s strategy to offer a complete range of commercial<br />
vehicles in China.<br />
Sales Performance<br />
Trucks and Commercial Vehicles sold by Product Segment<br />
(in thousands of units) <strong>2006</strong> 2005 % change<br />
Heavy 45.2 42.8 5.6<br />
Medium 21.8 21.3 2.3<br />
Light 100.6 95.7 5.1<br />
Buses 9.3 8.5 9.4<br />
Special purpose vehicles (*) 4.6 4.2 9.5<br />
Total units sold 181.5 172.5 5.2<br />
(*) Astra, Defence and Fire-fighting vehicles.<br />
<strong>Report</strong> on Operations Iveco 71