THE FIAT GROUP IN

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Alfa Romeo GTA.
The salient event of the year for Fiat-branded cars was
the introduction of the Stilo, a car noted for its use of
leading-edge technology, its innovative conception and its
high standard of quality. Production of this new model at the
Cassino factory was preceded by the introduction of a new
manufacturing organization that emphasizes lean processes,
high quality standards and attention to ergonomics. During
the first five months after its introduction (from October 2001
to February 2002), the Fiat Stilo generated about 135,000 orders
from the sales network, reflecting the interest and favorable
comments expressed by potential customers. Other models
introduced in 2001 include a passenger transport version of
the Fiat Doblò; new configurations for the Punto Go, Abarth
and Verve; the Seicento Brush; the Barchetta Naxos; and
the Multipla Special Series.
Lancia introduced the Thesis at the Geneva Motor Show. This
car, which is scheduled for market launch in 2002, is a luxury
sedan that features sophisticated technology and a top-flight
level of ride comfort.
Alfa Romeo expanded its Alfa 147 line by adding a five-door
model, a two-liter version with manual transmission and one
equipped with a 1.9-liter JTD engine.
The product renewal effort also includes several models that
will be introduced in 2002: new versions of the Fiat Ulysse
and Lancia Phedra, both entries in the multipurpose vehicle
segment; the Alfa 156 GTA and Sportwagon GTA, which
underscore the sporting tradition of the Alfa Romeo brand;
and the Fiat Stilo Station Wagon, which will round out the
Fiat brand’s core model line.
GROWTH STRATEGIES
During 2001, Fiat Auto continued to expand the global
reach of its industrial and commercial operations.
❚ In India, the extraordinarily successful introduction of the
Palio this past September enabled Fiat India to increase
sales by 14%.
❚ In China, the Sector completed the capital investments
needed to produce the Palio, which is scheduled for
commercial launch in the spring of 2002.
❚ In Thailand, working within the scope of the industrial
alliance with General Motors, Fiat Auto concluded the
agreements required to begin manufacturing the Alfa 156,
which will be introduced in the local market early in 2002.
❚ In Turkey, Tofas, an associated company and Fiat licensee,
was able to absorb the impact of the crisis affecting the
local economy thanks to the manufacturing of the Doblò.
This vehicle, which garnered a record share of the Turkish
commercial vehicle market (about 16%), is also exported
to other countries in Europe.
❚ In South Africa, the Sector posted satisfactory results
despite the devaluation of the rand, owing in part to the
success of the newly introduced Seicento and Alfa 147.
❚ In Egypt, Fiat Auto completed its first full year of operation
in 2001, achieving a market share of more than 11% and
the rank of second largest producer.
The capital expenditures of the Automobile Sector totaled
1,331 million euros (1,412 million euros in 2000). They were
targeted primarily at strategic investments in product
development.
Research and development outlays, which are charged in full
to income, amounted to 870 million euros in 2001 (776 million
euros in 2000). This increase demonstrates the extent of Fiat
Auto’s commitment to continue the effort started in 2000 to
strengthen its competitive position.
A major boost to the Sector’s competitiveness will
undoubtedly come from the industrial alliance with General
Motors. During 2001, Fiat Auto transferred its purchasing
operations to GM-Fiat Worldwide Purchasing, which
immediately began operating at full capacity with excellent
results, and its mechanical engineering Divisions to Fiat-GM
Powertrain, which was completely deconsolidated as of
June 30, 2001.