fiat - piano 30.10.2012

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October 30, 2012 1

Gro up ’s v iew s on Eur opean m ark et and br oadim p l i ca t ions on i t s d eve lopm en t p lans fo r t he fu t u r e

October 30, 2012

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October 30, 2012 3

• New Chrysler formed out of “363” sale June 2009 withFiat at 20%

• Government loans repaid in May 2011, 6 years early;Fiat to 58.5%

• GEC formed to drive single management organizationwith 4 regional hubs Sept 2011

• Chrysler sales activities integrated into Fiat in EMEA & LATAM

• Fiat brand successfully launched in NAFTA with Fiat500 early 2011

• Converged to 3 key architectures and launched first

vehicle with New Panda (Mini), 500L (Small), Dart(Compact)

• Maserati brand relaunch accelerating, 2 new sedanslaunching H1 2013

• Integrating Fiat LCV vehicles into RAM brand tocomplete full-range commercial vehicle brand

• Completing worldwide powertrain offering with Fire1.4 in NAFTA, Pentastar downsize for APAC, 8-speed/9-speed planetary transmission

• APAC business developing driven by Jeep SUVsuccess, localization started with launch of Viaggio inChina

• Purchasing & WCM progressing with significantsavings, efficiency & capacity improvement

• No longer a marginal player in global ranking

L i n g o t t o

P l a n

T a r g e t s

( A p r 2 0 1 0 )

Net Revenues (€b n)

Fiat Group (pro-forma) >64 76

Trad ing Pro f i t (€b n)Fiat Group (implied pro-forma) >1.3 >3.0

Trad ing Marg in

Fiat Group (pro-forma) 2.0-2.2% 4.0-4.8%

6 7 7 5

2 ,3 3 ,2

2010A* 2011A*

FI AT GROUP

Trading m arg in (% ) 3 .4 % 4 .3 %

DECENT EXECUTI ON OF A N AMB I TI OUS PLAN ,W I TH EMEA’S M ARKET DECLI NE HAV I NG

FUNDAMENTALLY CHAN GED THE LAND SCAPE

Net revenues (€bn)

Trading profit (€bn)

* pro- f orm a

The planProgress to-date

2 0 1 0 A 2 0 1 1 A

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October 30, 2012 4

13 ,9

15 ,4

16 ,5

17 ,4

18 ,2

14 ,4

15 ,3

14 ,1 13 ,9 14 ,1

14 ,915 ,6

2010 2011 2012E 2013E 2014E 2015E 2016E*

Industry reflects aggregate key markets where Group is competing (i.e. China,Ind ia, Japan, Australia, South Korea)

13 ,5

15 ,2

16 ,4 16 ,6

17 ,1

14 ,2

15 ,6

~ 1 71 7,7 1 7,7 18 ,2

18 ,3

2010 2011 2012E 2013E 2014E 2015E 2016E

7 ,1

5 ,2

5 ,5 5 ,86 ,0

6 ,3

6 ,97 ,3

2010 2011 2012E 2013E 2014E 2015E 2016E

Chrysler forecast @ 2009 Investor Day

Revised forecast

Fiat forecast @ 2010 Investor Day

Revised forecast

Fiat forecast @ 2010 Investor Day Revised forecast

Industry trend and forecast(mn units)

EU27 + EFTA(passenger cars & LCVs)

NAFTA(passenger cars,SUV, pick-uptrucks & LCVs)

APAC*

(passenger cars & LCVs)

LATAM(passenger cars & LCVs)

~ 2 4

2 5

2 7

2 9

3 1

2012E 2013E 2014E 2015E 2016E

Fiat forecast

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October 30, 2012 5

1 .6

2 .4

FY 2010production(mn units)

Full utilizationincluding

additional shifts(Standard UnionContract Terms)

Efficiencyimprovement(line speedincreases)

Additionalproduction

through extra-overtime and

holidays

FY 2012Eproduction(mn units)

I NDUSTRI AL FLEXI BI LI TY

CAPACI TY UTI LI ZATI ON

73%

92%

107%

49%

60%

73%

0%

20%

40%

60%

80%

100%

120%

2010 2011 2012E

Harbour definition Technical definition

CAPA CI TY UTI LI ZATI ON

140% 140% 143%

85% 85% 88%

0%20%

40%

60%

80%

100%

120%

140%

160%

2010 2011 2012E


Flexible work practices have allowed us to deliver

on strong market demand in the Americas

Harbour definition: 235 days p.a. / 16 hours per dayTechnical definition: 280 days p.a./3 shifts per day for LATAM; 265 days p.a./3 shifts per day at all plants (ex Saltillo where applied 2 shifts at 285 days) for NAFTA

• Stab le a t ~ 90% u t i l i zat ion o f t echn ica l

capac i ty f o r m any years

• Cons isten t u t i l i zat ion o f a l l f l ex ib i l i t y

ins t r u m en ts ( ex t r a -ove r t im e and ho l idays )

to m ax im ize ou tp ut

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October 30, 2012 6

EXTERNAL MARKET FACTORS

• Slump in European market demand, with 2012 beingthe 5th consecutive year of decline

Expected 2012 volume of ~12.5mn passenger cars is the lowest

level since 2007 and down 20+% from 16mn peak

Italian market at <1.4mn units and down 40+% from 2.5mn peakin 2007

European LCV volumes expected at ~1.6 million units and down30+% from 2.4mn peak in 2007

• Pricing pressure, especially for mass market segments

• Further pressure from Korean and potential Japanese

and Indian FTA’s• Market becoming bi-polar with profitability limited to

premium

• Low-end brands increasingly relevant in mass market

• Lack of visibility for recovery to pre-crisis level

• Structural overcapacity of European manufacturerswill delay any pricing recovery

• Industry heavily regulated and no moves to simplify

But Fiat Group isn’t immune to the effects of the European “Carmageddon ”…

88%

80%

~69%

56%52%

~45%

2010 2011 2012E


GROUP CAPA CI TY UTI LI ZATI ON I N EMEA(passenger cars & LCVs; including JVs; percent)

235 days p.a. / 16 hours per day 280 days p.a. / 3 shifts per day

MARKET EXPECTED TO BE FLAT I N 2 0 1 3 AND THEN

GRADUAL RECOVERY TO ~ 1 5 MN I N 2 0 1 5 / 2 0 1 6( PASSENGER CARS & LCVS)

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October 30, 2012 7

Nega t i vePos i t i ve

• Mass-market brands with strong heritage,extensive dealer network

• A leading position in LCV market

• Fiat 500 continued leadership in up-market A-segment

• Fiat Panda & Fiat Freemont success showseffectiveness of focus on utility / priceproposition

• Quality problems behind us & leadership inrecent products out of all production locations(Pomigliano/Tychy/Serbia)

• European leadership in C02 emissions for 5

years in a row

• Ferrari & Maserati unique iconic & profitableassets, with Maserati launching 2 newproducts in H1 2013

• Conserved cash through 2008-2012

Our strengths and weaknesses in EMEA

• Portfolio heavily skewed to A- & B-segment & geographically concentrated in SouthernEuropean markets

• Inability to leverage Fiat brand to move into C-segment and above

• Historical core segments have become

commodity purchases with limited ability toreturn capital employed

• Lancia–Chrysler integration hindered bymarket condition and limited brand appealoutside Italy

• Dealer network effectiveness still not ideal

• Alfa Romeo brand opportunity limited byhistoric lack of industrial volume in C- & D-segment to leverage

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October 30, 2012 8

• Twinair engine, 0.9L 2-cylinder: 90g/km NEDC CO2 emissions on Fiat500

• 1.4L Turbo MultiAir engine: 41 EPAhighway mpg on Dodge Dart

• New generation of planetaryautomatic transmissions for FWD,RWD and AWD applications

• Dual Dry Clutch spread across theportfolio in EMEA, NAFTA & China

• Fiat’s leadership in flex-fuel

technology in Brazil, utilizingvariable mix of gasoline and ethanol

• TetraFuel first engine in the worldable to run 4 different fuels: petrol,bioethanol, “gasolina”, natural gas

• Totally electric vehicle, 83 kW motor

• 100-mile cruising range in urbancycle

• 100+ MPGe EPA label on combinedcycle

• Real-time, on-board feedback on

how to improve driving style for fueleconomy

• Available on Fiat 500L, standard onuConnect infotainment system

• Recorded savings on off-boardEco:Drive up to 16%

• The widest range of vehicles in EU

• New Fiat Panda powered by Twinairengine: 86 g/km NEDC CO2 emissions

• New Fiat 500L coming in 2013

• Bio-methane application easilyimplementable: well-to-wheel CO2

emissions comparable to electricvehicles

FOR THE FI FTH YEAR I N A ROW , EUROPEAN LEADER I N CO2 EMI SSI ONS I N 2 0 1 2

Our starting pointA wide array of differentiated, sustainable technologies

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October 30, 2012 9

Solving the EMEA quandary

We have chosen the second op t ion because

• We have installed up-to-date available capacity in EMEA and have littlecapacity left elsewhere

• We have at least 3 brands that are capable of competing in the higher

margin business

• Fiat-Chrysler has developed over the last 3 years the relevant architecturesand baseline powertrains to enter the premium end of the business and

• Fiat-Chrysler has access to the NAFTA and APAC markets

OR

REMAI N FOCUSED ON NON- PREMI UM MASS- MARKET AND

RATI ONALI ZE CAPA CI TY BY CLOSI NG 1 OR MORE PLANTS1

LEVERAGE HI STORI CAL PREMI UM BRAND HERI TAGE ( ALFA

ROMEO & MASERATI ) , RE- ALI GN PRODUCT PORTFOLI O AND

REPOSI TI ON THE BUSI NESS FOR THE FUTURE

2

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October 30, 2012 10

Our strategy going forward

1. Focus Fiat brand on 500 and Panda as pillar vehicles (brands within a brand) and

derive all future products therefrom

2. Reduce/curtail Lancia exposure, preserving uniqueness of Ypsilon and rely onChrysler’s NAFTA development to feed European brand, if economically viable

3. Focus on Alfa Romeo and Maserati to access higher-end of bi-polar market

4. Fully flesh out Jeep brand by developing appropriate products for European andinternational markets

5. Continue to develop and maintain leading position in LCVs

OVERRIDING OBJECTIVES ARE:

1 . TO UTI LI ZE EMEA PRODUCTI ON BASE TO DEVELOP OUR GLOBAL BRANDS ( ALFA ROMEO,MASERATI , JEEP AND THE FI AT 5 0 0 “ FAMI LY” )

2 . TO SHI FT A SI GNI FI CAN T PORTI ON OF PRODUCT PORTFOLI O TOW ARDS HI GHER M ARGI N

OPPORTUN I TI ES

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October 30, 2012 11

2 0 1 3 2 0 1 42 0 1 2 2 0 1 5 2 0 1 6

NOT CURRENTLY IN PRODUCTIONANYWHERE

only for EMEAfor EMEA and export

for EMEA

Major new model launches in EMEA(SoP within each year indicated)

VEHICLES

PRODUCED IN

EMEA

for EMEA and export

only for EMEAOUTSIDE ITALY

IN ITALY

for EMEA and export

New model

IMPORTEDVEHICLES

Refresh

MODELREFRESH

OUTSIDE ITALY

IN ITALY

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October 30, 2012 12

Synergies on capital and costUtilize European manufacturing base for WW volume growth

• Pro d u c t s n e ed e d f o r co m p e t i t i v e o f f e r i n g i n Eu ro p e a re co m p l em e n ta r y t o

t ho se prod uced in NAFTA and LATAM w her e pr odu ct io n capac i t y i s or w i l l soonb e s a tu ra t e d a s Ch ry s l er p ro d u c t o f f e r i n g co n t i n u e s t o b e r e n ew e d t h ro u g h2 0 1 5

• Targe t to u t i l i ze up t o 15 % o f capaci t y fo r expo r t , espec ia l ly f o r Jeep sm a l le rSUV ( no t cur r en t l y i n p r odu c t ion an yw her e) , Al fa Rom eo and Masera t i b r ands

•

Arch i tec tu r e a l l oca t i on• Italian footprint for higher value-added production

• Focus ex-Italy on smaller segments

• Wor k ing w i th I t a l i an Gove rnm en t on act i ons to im p rov e com pe t i t i veness fo re x p o r t

• New Union agreement in place which addresses labor flexibility issue but need fulladherence

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October 30, 2012 13

Our new EMEA Targets

• 20 12 conf i r m ed Trad ing Loss o f ~ €7 00 m i l l ion

• 20 13 Eur opean m ark e t expec t ed t o be f l a t and EMEA loss expec ted a t s im i l a ror s l ig ht ly low er lev e l

• Act i on s on p rod uc t p l an and com m i tm en t o f cap i ta l t o I t a l i an m anu fac tu r i ng

s i tes

• are dependent on respect and compliance with new labor agreements;

• will require 24-36 months for implementation and

• will allow Fiat-Chrysler in EMEA to recover some market share in a more rationalmarket and to act as export base for sales by other regions

• Break -even ach ievab le i n 201 5 -1 6

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October 30, 2012 14

2012-14 Group financial targetsOld vs. new plan (IFRS)

2 0 1 2 E 2 0 1 3 E 2 0 1 4 E

Investor Day2010

RevisedInvestor Day

2010Revised

Investor Day2010

Revised

Volumes(units/mn)

~4.8 ~ 4. 2 ~5.5 4 .3 -4 .5 ~6.0 4 .6 -4 .8

Revenues(€bn)

~85 ~ 8 3 ~97 8 8 - 9 2 ~104 9 4 - 9 8

Trading Profit(€bn)

~4.6 ~ 3. 8 ~6.1 4 .0 -4 .5 ~7.5 4 .7 -5 .2

TradingMargin

~5.4% ~ 4.6 % ~6.3% 4.6% -4 .9% ~7.2% 5.0% -5 .3%

EBITDA (€bn) 9.8-10.6 ~ 8 .0 11.9-12.7 9 .0 -9 .5 13.8-14.6 10 .3 -10 .8

EBITDA % ~11.5% ~ 9.6 % ~12.3% ~ 10 .3% ~13.3% ~ 11 .0%

Capex (€bn) ~8.0 ~ 7 .5 ~6.2 7 .5 -8 .5 ~6.2 8 .5 -9 .5

Capex/D&Aratio

~1.5 ~ 1 .9 ~1.1 1 .6 -1 .8 ~1.0 1 .6 -1 .8

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October 30, 2012 15

Some conclusions

• EMEA w i l l con t inu e t o p r ov ide g rea t cha l lenges fo r every one f o r m any years t oco m e

• Fi at - Ch r y sl er d eci si on t o sh i f t p r o du ct p o r t f ol io i s t h e p r ef er r e d ch o ice

because

• It is the best economic alternative

• Group has all necessary elements to execute (brands, architectures, powertrains,

installed capacity and experienced workforce)

• Group can manage financial requirements for implementation

NOT FOR THE FAI NT- HEARTED, BUT A POTENTI ALLY EXCI TI NG FUTURE

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October 30, 2012 16

GROUP I NVESTOR RELATI ONS TEAM

Mar co Aur iem m a +39-011-006-3290 Vice Pres ident

A lexandra Deschner +39-011-006-2308

Tim o t hy Krause +1-248-512-2923

Paolo Moso le +39-011-006-1064

Sara Nico la +39-011-006-2572

Mar is te l l a Bo ro t t o +39-011-006-2709

fax: +39-011-006-3796

email: investor . re la t ions@fia tspa.com

websites: w w w .f i at spa.co m

w w w .chry slerg ro up l lc.com

Contacts

fiat - piano 30.10.2012

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