THE FIAT GROUP IN

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Case 521 D wheeled loader.
with superior options for their customers. The dominant
position of the Case IH Axial Flow combine harvester in
North America was enhanced by the introduction of new
models. New models of seeders and planters extended the
company’s position in tillage equipment, and a new Case
IH 6-row cotton picker puts the brand in a leading position
in this important niche market. Capitalizing on the strengths
of the united companies, the Case IH brand introduced
a new line of compact tractors to immediate success in
the market.
FINANCIAL ACTIVITIES
In 2001, revenues from financial activities accounted for
about 7% of the sector’s net revenues.
CNH Capital completed its transformation into a financial
services company dedicated solely to the support of CNH
dealers and customers across all its brands. In the final
phase of the transition, begun in the first quarter of 2001,
CNH Capital exited the commercial lending business, ended
retail financing activities outside its own dealer networks and
reorganized its European businesses to better support the
company’s customers and dealers.
In 2001, the performance of the Sector’s finance companies
were penalized by a decline in the volume of financing
provided to construction equipment customers and by losses
in its non-core lending operations.
Financial activities as a whole required the recognition of
allowances for doubtful accounts totaling 220 million euros
(152 million euros in 2000), including 155 million euros for the
non-core activities.
RESULTS FOR THE YEAR
CNH revenues in 2001 totaled 10,777 million euros, about
the same as in 2000.
Sales of agricultural equipment grew significantly during the
year, more than offsetting revenue lost through governmentmandated
divestitures, while sales of construction equipment,
which carry higher average margin, declined with the industry.
CNH ended the year with operating income of 209 million
euros (1.9% of sales), against income of 45 million euros
in 2000 (0.4% of sales).
The combined effect of lower volumes, a worsening mix,
an unfavorable exchange rate for the U.S. dollar, reduced
coverage for overhead (caused by production cutbacks
to reduce inventories) was more than offset by margin
improvements achieved through CNH’s merger-related
profit improvement initiatives.
The Sector’s increasingly successful integration and industrial
streamlining plan undertaken after the merger resulted in