THE FIAT GROUP IN

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FINANCIAL ACTIVITIES AND SERVICES
In 2001, Fiat Auto continued to pursue opportunities in the
area of mobility services, strengthening its position as the
leading Italian player in this business. This achievement was
made possible by offering more streamlined services and
broadening the product spectrum, using, when appropriate,
cooperation agreements with partners who could contribute
specific expertise.
The Arese Contact Center handled more than six million calls
in 14 languages both from consumers and Fiat Auto dealers,
using a Customer Relation Management system.
Targa Connect, a multimedia, interactive infomobility system,
was introduced in all European markets in April 2001. This
service, which was extremely well received, was further
expanded in September to coincide with the launch of the
Fiat Stilo. In order to round out its spectrum of infomobility
products, Fiat Auto established Targa Trafficmaster S.p.A.,
a 50-50 joint venture with an English partner, Trafficmaster plc.
The new company will use leading-edge monitoring technologies
to collect, process and distribute traffic information in real
time.
Among the Sector’s financial activities, financing provided to
end customers amounted to 8,920 million euros, or 4% less
than in 2000. This decrease reflects weakness in Fiat Auto’s
target markets and a financing policy focused on quality
and profitability rather than on increasing volume. Financing
supported the sale of 1,154,000 vehicles (7% less than in
2000), equivalent to 39% of the new vehicles sold by Fiat
Auto (40.3% in 2000). In Italy, the Sector financed the sales
of over 340,000 new vehicles. Its share of the units shipped
by Fiat Auto was virtually unchanged at 37%.
At 24,500 million euros, financing offered to the sales network
and suppliers held at the strong level achieved in 2000.
Fiat Auto’s renting operations were strengthened with the
establishment of a new joint venture called Leasys S.p.A.
Savarent and Sei (Enel Group) have transferred their renting
businesses to the new company. Savarent contributed its
rental contracts with large fleet operators. The rental fleet of
the Sector’s European subsidiaries and associated companies
numbered 107,900 units, for a gain of 59% over 2000.
RESULTS FOR THE YEAR
The Sector had consolidated net revenues of 24,440 million
euros, or 921 million euros (-3.6%) less than in 2000.
The decline in revenues was smaller than the drop in unit
sales due to the growing importance of the financial and
service operations, whose contribution to Fiat Auto’s overall
Connect system integrates information and online technologies.
revenues increased by almost a percentage point, and to
an improvement in the revenue earned per unit sold. Another
positive contribution came from the revenues generated by
the sale of spare parts inventories to a joint venture that the
Sector established with DHL Worldwide Express and other
financial partners in its effort to reengineer its logistical
system.
Fiat Auto reported an operating loss of 549 million euros,
compared with an operating income of 44 million euros in
2000. The return on sales was negative by 2.2% (positive
return of 0.2% in 2000). This sharp decline is the result of
lower unit sales in Europe and Poland, the costs incurred
to enhance the standard equipment of the Sector’s vehicles
without adequate price increases, and the charges associated
with a reduction in the inventories held by dealers. The
operating result was also adversely affected by a rise in
research and development outlays (+94 million euros) and
an increase in advertising expenses (+64 million euros)
attributable in part to the launch of the Stilo.
These negative developments were offset only in part by
improvements in efficiency that reduced product costs and
overhead; the increased synergies generated by the alliance
with General Motors (+251 million euros); and the gain earned
on the sale of the spare parts inventories mentioned above
(+300 million euros).