operating sectors the fiat group in 1999 - fiat spa
TRANSCRIPT
Operating Sectors
The Fiat Group in 1999
Contents
This Report is available on the Internet atwww.fiatgroup.com
Financial Highlights by Sector
The Fiat Group
Products and Services of the Group
Operating Sectors
Automobiles (Fiat Auto)
Ferrari and Maserati
Commercial Vehicles (Iveco)
Agricultural and Construction Equipment (CNH Global)
Metallurgical Products (Teksid)
Components (Magneti Marelli)
Production Systems (Comau)
Aviation (FiatAvio)
Rolling Stock and Railway Systems (Fiat Ferroviaria)
Publishing and Communications (Itedi)
Insurance (Toro Assicurazioni)
Services
Principal Fiat Group Companies
1
2
4
6
12
14
20
26
30
34
38
40
42
44
46
48
p
in millions of euros 1999 1998 1997 1996 1995
Operating income 788 746 1,791 932 1,717
Income before taxes 1,024 1,442 2,160 1,965 1,758
Income before minority interest 506 916 1,550 1,420 1,329
Group net income 353 621 1,248 1,225 1,109
Net financial position (Net borrowings) (4,031) 1,420 1,340 (1,142) (1,341)
Stockholders’ equityincluding minority interest 14,767 15,120 15,462 14,026 13,236
Group interest in stockholders’ equity 12,874 12,998 13,203 12,042 11,178
Cash flow (income before minority interest
plus depreciation and amortization) 2,860 3,226 4,184 3,867 3,501
Capital expenditures 2,712 2,418 2,398 2,746 2,918
Research and development 1,406 1,264 1,166 1,129 1,079
Operating income fromIndustrial Activities/Net revenues 1.9% 2.2% 4.4% 2.9% 4.8%
Operating income/Averagenet invested capital 4.8% 5.4% 12.2% 6.3% 12.3%
Income before minorityinterest/Net revenues 1.1% 2.0% 3.4% 3.5% 3.4%
Net income/Average stockholders’equity (after minority interest) 2.7% 4.7% 9.9% 10.5% 10.3%
Value creation (*) (480) (714) 144 (607) 26
(*) Difference between operating income for the fiscal year (including investment income) and the cost of average netinvested capital at an annual rate of 10% in 1999, and of 12% in the previous years.
Financial Highlights of the Fiat Group
Fiat S.p.A. adopted the euro as its reporting currency as of January 1, 1999, opting foran early use of this currency, as allowed under Legislative Decree No. 213/1998 “ProvisionsGoverning the Introduction of the Euro in the Italian National System.”
The Consolidated and Statutory Financial Statements at December 31, 1999 of FiatS.p.A. are therefore denominated in euros. To make the respective data comparable,the amounts for the previous years have been restated in euros using the fixed exchangerate of 1 euro = 1,936.27 lire established on December 31, 1998.
Research anddevelopment
number Companies Employees Facilities Centers
Italy 233 122,730 83 72
Europe excluding Italy 454 53,654 79 34
Mercosur 67 27,883 24 9
North America 161 9,379 38 12
Other regions 133 7,673 25 4
Total 1,048 221,319 249 131
Statistical data by geographical region
1997
242,322
1998
220,549
1999
221,319237,865
19961995
237,426
Number of Employees
Net Invested Capitalin millions of euros
1997
14,122
1998
13,700
1999 (*)
18,798
15,168
1996
14,577
1995
(*) Includes the controlling interest in the Case Groupacquired at the end of 1999 and valued at cost.
48,123
1999
45,769
1998
46,257
1997
40,244
1996
39,092
1995
Consolidated Revenuesin millions of euros
Financial Highlights by Sector
1
Operating income from
Industrial Activities/ Income beforeNet revenues Operating income Net revenues minority interest
1999 1998 1999 1998 1999 1998 1999 1998(in millions (in millions (in millions (in millions (in %) (in %) (in millions (in millions
of euros) of euros) of euros) of euros) of euros) of euros)
Automobiles (Fiat Auto) 24,101 24,859 (121) (108) (0.5) (0.4) (493) (258)
Commercial Vehicles (Iveco) 7,387 6,649 311 261 4.2 3.9 180 192
Agricultural and Construction Equipment (CNH Global) 5,246 5,127 371 452 7.1 8.8 216 507
Metallurgical Products (Teksid) 1,682 1,165 76 42 4.5 3.6 26 4
Components (Magneti Marelli) 4,062 3,793 108 56 2.7 1.5 107 21
Production Systems (Comau/Pico) 1,693 843 43 (1) 2.5 (0.1) (8) (6)
Aviation (FiatAvio) 1,361 1,361 109 60 8.0 4.4 61 79
Rolling Stock and Railway Systems (Fiat Ferroviaria) 375 389 13 18 3.5 4.6 3 (1)
Publishing and Communications (Itedi) 413 437 17 19 4.1 4.3 11 –
Insurance (Toro Assicurazioni) 3,922 2,959 (103) (168) n.m. n.m. 92 64
Miscellaneous and eliminations (2,119) (1,813) (36) 115 n.m. n.m. 311 314
Total for the Group 48,123 45,769 788 746 1.9 2.2 506 916
NumberCash flow Capital expenditures Net invested capital of employees
1999 1998 1999 1998 1999 1998 1999 1998(in millions (in millions (in millions (in millions (in millions (in millions
of euros) of euros) of euros) of euros) of euros) of euros)
Automobiles (Fiat Auto) 855 1,146 1,464 1,373 5,021 5,863 82,553 93,514
Commercial Vehicles (Iveco) 433 368 359 307 2,359 1,764 36,217 31,912
Agricultural and Construction Equipment (CNH Global) 333 624 178 151 5,777 1,123 19,049 21,344
Metallurgical Products (Teksid) 123 74 182 73 793 504 14,522 10,981
Components (Magneti Marelli) 310 254 209 222 1,289 1,270 25,613 29,398
Production Systems (Comau/Pico) 30 12 26 14 485 165 16,943 7,103
Aviation (FiatAvio) 145 167 42 36 163 159 5,590 5,962
Rolling Stock and Railway Systems (Fiat Ferroviaria) 18 15 11 12 29 94 2,109 2,294
Publishing and Communications (Itedi) 19 11 8 9 25 21 934 1,473
Insurance (Toro Assicurazioni) 120 89 97 25 311 327 2,907 2,869
Miscellaneous and eliminations 474 466 136 196 2,546 2,410 14,882 13,699
Total for the Group 2,860 3,226 2,712 2,418 18,798 13,700 221,319 220,549
Being aGroup
ValueCreation
Achievingcompetitiveexcellence
Focusing andmotivatingmanagement
Inno
vatin
g ou
r pr
oduc
ts
Reduc
ing c
omplex
ity
Lengthening the
value chain
Globalizing our activities
Focusing on our
core businesses
Enhan
cem
ent o
f
hum
an re
sour
ces
Customer satisfaction
VALUESSTRATEGIES
1 – Paolo Annibaldi, Corporate Senior Vice President External Relations and Communication Fiat S.p.A.2 – Giancarlo Boschetti, Chief Executive Officer Iveco N.V.3 – Paolo Cantarella, Chief Executive Officer Fiat S.p.A.4 – Damien Clermont, Chief Financial Officer Fiat S.p.A.5 – Luca Cordero di Montezemolo, Chairman and Chief Executive Officer Ferrari S.p.A.6 – Pier Luigi Fattori, Corporate Senior Vice President Human Resources Fiat S.p.A.7 – Paolo Fresco, Chairman Fiat S.p.A.8 – Carlo Gatto, Chief Administration Officer Fiat S.p.A.9 – Francesco Paolo Mattioli, Executive Vice President Fiat S.p.A.
10 – Paolo Monferino, Executive Vice President Fiat S.p.A.11 – Umberto Quadrino, Co-Chairman CNH Global N.V.12 – Jean Pierre Rosso, Chairman and Chief Executive Officer CNH Global N.V.13 – Roberto Testore, Chief Executive Officer Fiat Auto S.p.A.
1
7
2
8
3
9
4
10
5
11
6
12 13The Management
Main acquisitions/agreements strengthening the Group competitivenessLengthening
Leadership Globalization the value chain
Fiat Auto Joint venture with Yuejin Motor Company (China) ●
Set up of Fiat Auto Egypt Industrial ●
Strategical industrial alliance with General Motors ● ● ●
Iveco Acquisition of a majority interest in Fraikin (France) ●
CNH Global Acquisition of a majority interest in Case Corporation (United States) ● ● ●
Teksid Acquisition of a majority interest in Meridian Technologies (magnesium) ● ●
Magneti Marelli Joint venture with Bosch (lighting) ●
Acquisition Seima Group (lighting) ●
Comau Acquisition Pico Group (United States) ● ●
Acquisition of a majority interest in Renault Automation (France) ● ●
Acquisition of Sciaky activities (France) ●
Toro Assicurazioni Acquisition of the French operations of the Guardian Group ●
T H EFIAT
2
Established in 1899, Fiat was one of the founders
of the European automobile industry. Since its
inception, the Company followed a two-prong
growth strategy — penetration of foreign markets
and focus on innovation — which characterized its
subsequent development and translated into the
manufacturing of high-tech quality products and
the adoption of the most innovative industrial and
organizational systems.
Fiat is a lot more than just cars. The Company
leveraged its expertise in an original and perhaps
unique way among international groups, expanding
its mission to include every area of mobility: from
cars to aircraft, from trucks to trains, from farm
tractors to marine engines and, in more recent
years, even space launchers. Fiat’s industrial
diversification continued at an increasingly rapid
pace, with a growing presence in metallurgical
products and components, followed later on by
production systems, insurance and support
services.
15% Services (*)85% IndustrialActivities
(*) It includes the following service activities operated by the IndustrialSectors: financial, insurance and mobility services supplied by Fiat Auto,Iveco and CNH Global; Magneti Marelli’s quick-service centers and infomobilityservices; Comau’s plant maintenance operations, etc.
Revenues by Sector
Commercial Vehicles (14%)
Agricultural andConstructionEquipment (10%)
Other IndustrialSectors (17%)
Other companies (4%)
Automobiles (45%)
Insurance (7%)
Ferrari and Maserati (2%)
Publishing and Communications (1%)
Metallurgical Products (3%)
Components (7%)
Production Systems (3%)
Aviation (3%)
Rolling Stock and Railway Systems (1%)
Service Sectors (8%)
creating increasingly complex competitive challenges. In its endeavors, it is bolstered by the values it has
consistently applied over its one-hundred-year history and which will guide it into the future: value creation,
customer satisfaction, and the enhancement of its human resources.
This approach is dictated by the pursuit of a specific goal: the achievement of competitive excellence, which
means the attainment of a leadership position in those markets where the Group chooses to operate.
To translate these values into concrete actions, the Company is committed to fully implementing its strategies:
focusing on its core businesses, globalizing its activities, lengthening the value chain and innovating its products.
The Fiat Group is pursuing aggressively all these main avenues of growth. Its commitment is demonstrated
by the major acquisitions and alliances it has concluded, the increasingly balanced geographic mix of its
revenues, the expanding range of its services, the streamlining of its organization, and the successful launch
of new products.
During its long history, Fiat has often been ahead of its time, anticipating trends and repeatedly transforming
itself in an effort to seize every available growth opportunity. The Company has chosen to go down this road
once again, as it continues the journey and the industrial adventure it started in Turin over a century ago.
Fiat was the main force behind the development of a mass
automobile market in Italy, driving the expansion of the national
economy and contributing to the enhancement of its
competitive position in Europe and the rest of the world. This
was particularly true in Southern Italy, where Fiat stimulated
economic growth with the construction of one of its biggest
manufacturing hubs.
The Group also provided a significant contribution to the
economic expansion of emerging countries, where the
Company used the expertise it developed with its early
automotive ventures to implement its overall growth strategy.
Fiat entered the second century of its life against the backdrop
of a profound transformation that is reshaping industry and
G R O U P
Revenues by geographical region of destination
Europe excluding Italy (41%)
Italy (38%)
Other regions (21%)
Sales trend of the last ten years
1990
in millions of euros
0
1991 1992 1993 1994 1995 1996 1997 1998 1999
10,000
20,000
30,000
40,000
29,546 29,17430,526
28,176
34,005
39,092 40,244
46,257 45,76948,123
Abroad
Italy
Revenues by geographical region of origin
Europe excluding Italy (22%)
Italy (61%)
Other regions (17%)
PRODUCTS OF THE GROUPAgricultural and Construction EquipmentThe Sector is headed by CNH Global N.V., anew company created in 1999 through themerger of New Holland and Case. It operatesin the field of tractors and agricultural equipmentwith the New Holland, Case, Case IH, DMI,AFS, Flexi-Coil and Steyr brands. Its constructionequipment products are sold under the NewHolland, New Holland Construction, Case,Fermec, Link-Belt, O&K, FiatAllis and Fiat-Hitachibrands. CNH Capital offers a broad range offinancial services to customers worldwide.
Other Industrial SectorsThese Sectors, which include MetallurgicalProducts, Components, Production Systems,Aviation and Rolling Stock and Railway Systems,offer the following products and services:
• Cast-iron and aluminum engine blocks andcylinder heads, other cast-iron components,transmission components, cast-iron andaluminum gearboxes and suspension systems,and magnesium bodywork components.
• Motor vehicle components and systemsin the areas of powertrain, suspensions,interior/bodywork, and electronics, as wellas aftermarket, quick repair and infomobilityservices.
• Industrial automation systems for theautomotive industry, including productand process engineering, logistics andmanagement, program management,manufacturing, installation and productionstart-up, and maintenance.
• Components and systems for airplanesand helicopters, ship propulsion turbines,propulsion systems for launchers and satellites,and aircraft engine overhaul services.
• Railway and urban transit transportationsystems, rolling stock of different types,railway bogies, trams and subway systems.
ServicesThese Sectors, which include Publishing andCommunications and Insurance, are active inthe following principal areas:
• Publication of the daily La Stampa and salesof advertising space for multimedia customers.
• Full range of casualty and life insuranceproducts, bankassurance products througha joint venture with Banca di Roma, salesof Toro Targa Assicurazioni insurance productsby a joint venture with Fiat Auto that operatesthrough the Fiat dealer network.
The Companies of the Fiat Group are organized into10 operating Sectors that manufacture automotiveproducts and provide services to customers in morethan 180 countries throughout the world. Drivenby an unflagging determination to achieve marketleadership and excel in customer satisfaction,the Group engages in the areas of automobiles,commercial vehicles, agricultural and constructionequipment, components, production systems, aviation,rolling stock and railway systems, insurance andfinancial services, and publishing.
Commercial VehiclesThe Sector designs, produces and sells a completerange of commercial vehicles under the brandsIveco, Seddon Atkinson, Iveco Pegaso and IvecoFord, as well as buses (through a joint venturewith Renault V.I.) under the Iveco brand, fire-fightingequipment under the Camiva, Iveco and Magirus
brands, and diesel engines under the Aifo brand. Through Transolver, the Sector furnishes afull spectrum of financial services, includinglong-term leases. The Sectorlead company is Iveco N.V.
Through Targa Services, the Sector offers its suppliers, dealersand customers a complete range of automotive services.Financial services are provided by Fidis. The Group also controlsFerrari and Maserati, which manufacture sports and luxury cars.
AutomobilesThe Group’s automobile operations are carried out primarilyby Fiat Auto S.p.A. and its subsidiaries, which sell cars underthe Fiat, Lancia and Alfa Romeo brands, and light commercialvehicles under the Fiat brand.
4
AND SERVICESLengthening the Value ChainThe Group devotes significant attention to lengthening its value chain by developingservices and solutions that are linked to the products it sells: financial and insuranceservices and mobility services for Fiat Auto, Iveco and CNH Global; aftermarket servicesand supply of quick repair and infomobility services for Magneti Marelli; maintenanceservices for Comau; engine overhaul services for FiatAvio; and mileage-based maintenanceand support services for Fiat Ferroviaria.
Support Services for the Group’s Industrial ActivitiesThe services that support the Group’s industrial activities, which in the past were structuredat the Sector and country level, have been re-engineered with the establishment ofdedicated organizational units that can supply better quality services at lower costs,primarily in the areas of information and communication technologies, real estate,administration, finance, and personnel management and training.
Automobiles
FIAT AUTO
6 7
Fiat built its first car in 1899.The Lingotto, the Company’sfirst mass-production carfactory, was inaugurated inTurin in 1923. It now housesthe Group’s headquarters.Other plants were later openedin Turin (Mirafiori in 1939 andRivalta in 1967), followed byadditional facilities in Italy andin the world. The acquisitionsof Lancia S.p.A. in 1969 andAlfa Romeo in 1986 representlandmark events in theCompany’s history. Fiat’sdomestic markets extendbeyond Italy, to include theMercosur countries, where itbuilt factories in 1960 (Argentina)and 1976 (Brazil), and Poland,where in 1993 it purchased FSM’sautomotive activities. In 1979,at the end of a decentralizationprocess launched in 1973, FiatS.p.A. divested its automotiveoperations and transferred themto Fiat Auto S.p.A.
Highlights of the year
Marketing of the Lancia Lybra and new Fiat Punto, which were
introduced at the events celebrating Fiat’s Centennial, got underway
in the second half of 1999. These models were well received
by motorists, as demonstrated by brisk sales in the closing months
of 1999 and the beginning of 2000.
New companies established in 1999 include a 50-50 joint venture
between Fiat Auto and Yuejin Motor Corporation, which will
manufacture cars in China, and Fiat Auto Egypt Industrial Company
SAE, which will manufacture and distribute World Car models
for the local market. This family of vehicles (Palio, Siena and Palio
Weekend), which are built at different factories throughout the
world, is intended to drive Fiat Auto’s expansion in the emerging
countries, where the growth potential is greatest.
The Sector is studying with great interest potential opportunities in Russia. It
recently confirmed that it looks forward to the start of operations at Zao
Nizhegorod, its joint venture with OAO Gaz and EBRD, but is adjusting the
investment and production schedules to accommodate changing conditions
in the local automobile market.
On March 13, 2000, Fiat and General Motors, the world’s largest automotive
company, announced a strategic industrial alliance. General Motors will acquire
20% stake of Fiat Auto in exchange for the acquisition of about 5.1% of GM’s
capital stock. Fiat S.p.A. will thus become General Motor’s largest industrial
stockholder.
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Principal companies, production facilities and sales networks
Europe
Italy● Fiat Auto Turin
Termoli (CB) Arese (MI) Rivalta (TO)
Termini Imerese (PA)Verrone (VC)
Cassino (FR) Pomigliano d’Arco (NA)
● FMAPratola Serra (AV)
● SataMelfi (PZ)
◆ SevelAtessa (CH)
France◆ Sevelnord
Lieu-Saint-Amand
Poland● Fiat Auto Poland
TychyBielsko-Biala
Russia■ Zao Nizhegorod Motors
Nizhnjy Novgorod
Mercosur
Argentina● Fiat Auto Argentina Cordoba
Brazil● Fiat Automoveis
FIASABetim (Minas Gerais)
Other regions
China◆ Jiangsu Nanya
AutoNanjing
Egypt■ El Nasr Automotive
Manufacturing
Morocco◆ Somaca
Casablanca
India● Ind Auto
Lal Bahadur Shast(Maharastra)
Pakistan■ Raja Autocars
Turkey◆ Tofas
Bursa
Vietnam■ Mekong Corporation
● subsidiary◆ affiliated company■ licensee
Italy Rest of Europe Rest of the world Total
Production facilities 16 3 4 23
R&D centers 12 – � 1 13
Dealers 692 2,020 859 3,571
Roberto Testore,Fiat Auto’s Chief
Executive Officer.
Multipla Bipower
Operating Sectors – Automobiles
20%
13%
67%
15%
43%
42%
8 9
Innovation applied to the development, styling and
manufacturing of new products is a primary factor
in achieving customer satisfaction and gaining a
competitive advantage. As a result, it represents a
core value of this Sector’s growth strategy. Over the
last five years, this approach has enabled Fiat Auto
to earn Car of the Year honors for three of its models:
the Fiat Punto in 1995, the Fiat Bravo-Brava in 1996,
and the Alfa Romeo 156 in 1998.
In 1999, the new Fiat Punto and Lancia Lybra also
received numerous important awards, confirming the
growing success they are achieving in the markets
where they have been introduced.
Operating Sectors – Automobiles
Products
Automobiles
Full-size166 Lancia k
Lancia k SW
Intermediate156 Lybra
Lybra SWMarea
Marea Weekend
Intermediate/Compact146 Palio Weekend
Siena145
Bravo - Brava
SubcompactLancia Y Punto
Palio
City subcompactPanda
Seicento
Niche Products
Luxury and Sports carsLancia k coupéGTV
SpiderBarchetta
Punto Cabrio
Coupé
MinivansLancia Z Ulysse
Multipla
Light Commercial Vehicles
ScudoFiorino
Ducato
Strada
156 Sportwagon*
(*) Distribution started in 2000.
Fidis is the lead company of all the financial service
units which, within the scope of Fiat Auto’s operations,
offer products designed to support automobile sales to
consumers, and help Fiat Auto dealers and the suppliers
of the Fiat Group in general. Fidis is present directly
or through cooperation agreements in four continents.
The portfolio of loans handled in 1999 averaged 17
billion euros, including 10.8 billion euros in financing
provided to end customers, 3.9 billion euros granted
to the sales network and 2.4 billion euros loaned to
suppliers.
Formula, an innovative financial product that offers
end customers a wide range of options upon expiration
of the financing contract, has grown particularly well
in recent years. In the area of network financing,
Fidis continued to develop its traditional inventory
financing products and now finances about 90% of
the vehicle inventories purchased by dealers.
Fidis has achieved significant growth in financing
provided to Group suppliers, expanding both traditional
services like factoring and more innovative support
activities. This was accomplished through focused
programs that targeted domestic and international
expansion, including, in particular, financing provided
to several Fiat Auto suppliers for the construction of
new production facilities in Argentina, Brazil and India.
Service Activities
Highlights
in millions of euros 1999 1998 1997
Net revenues 24,101 24,859 26,202
Operating income (loss) (121) (108) 758
As a % of revenues (0.5) (0,4) 2,9
Income (loss) beforeminority interest (493) (258) 402
Cash flow 855 1,146 2,068
Capital expenditures 1,464 1,373 1,341
Research and development 711 608 535
Net invested capital 5,021 5,863 5,992
Number of employees 82,553 93,514 118,109
Production of Fiat Auto and its subsidiariesAutomobiles and Light Commercial Vehiclesin thousands of units 1999 1998 1997
Fiat 1,165.2 1,154.7 1,331.2
Lancia Autobianchi 160.1 175.4 181.7
Alfa Romeo 208.3 197.7 160.6
Total Western Europe 1,533.6 1,527.8 1,673.5
Brazil 391.6 393.0 581.7
Poland 343.8 336.7 327.9
Argentina 42.8 93.4 95.7
Total 2,311.8 2,350.9 2,678.8
Other regions 41.2 38.1 –
Grand total 2,353.0 2,389.0 2,678.8
Sales Performance - Automobiles and Light Commercial Vehicles
in thousands of units 1999 1998 1997
France 151 152 120
Germany 185 195 168
Great Britain 96 109 101
Italy 955 951 1,136
Spain 73 67 53
Rest of Europe 216 210 172
Western Europe 1,676 1,684 1,750
Poland 177 160 178
Brazil 304 365 509
Rest of the world 171 188 203
Total sales 2,328 2,397 2,640
Affiliated companies 59 89 99
Grand total 2,387 2,486 2,739
10 11
In 1999, the automobile market continued to expand in
Europe, where it grew by 5% marking the sixth consecutive
up year, and in North America. However, demand was down
about 18% for the year in Brazil and Argentina. Competitive
price pressure increased steadily in Europe, especially in
Italy, with a negative impact on the level of profitability.
Fiat Auto sold a total of 2,328,000 vehicles, compared with
2,397,000 in 1998. Lower sales in South America account
for most of this 2.9% decline.
Consolidated revenues of Fiat Auto amounted to 24,101
million euros, showing a slight decline compared with 1998.
The Sector reported an operating loss of 121 million euros,
compared with a loss of 108 million euros in 1998. However,
operating margins, which had been deteriorating during the
first half of the year, improved sharply in the closing months
of 1999, owing to the good performance of new models.
Performance in 1999
Fiat Auto continues to be firmly committed to
expanding its range of services. Motorists who visit
one of the Company’s sales outlets must be able
to find solutions to the numerous and increasingly
complex needs that will arise while they own their
cars. The wisdom of this strategy is demonstrated
by the success of Targa Services in its first year of
activity.
New services like Targa Rent, which offers short-term
rentals of Fiat Auto vehicles through the dealer
network, have been added to roadside assistance,
insurance programs, authorized body shops and
maintenance centers.
Operating Sectors – Automobiles
The Sportronic electronic automatic gearbox
combines the benefits of an automatic
transmission with the advantages of a stick
shift. It can be set in either fully automatic
(position A) or sequential (position S) mode.
Other Companies
FERRARI
12 Operating Sectors – Ferrari and Maserati 13
The Ferrari Team was founded inModena in 1929 to help memberscompete in car races, initially withAlfa Romeo automobiles. The firstFerrari-built sports car raced in the1940 Mille Miglia, and in 1943 theproduction facilities were moved toMaranello. The company officiallyadopted the Ferrari name and anew model, the 125 Sport, madeits debut in 1947. Since then, Ferrariautomobiles, with some of theworld’s greatest drivers at thewheel, have become legendary,winning more than 5,000 racesat racetracks everywhere on theplanet. Ferrari’s achievementsinclude 9 Formula 1 World Drivers’Championships, 14 Manufacturers’World Championships, 3 Formula 1Constructors’ Championships and,as of the end of 1999, 125 victoriesin Formula 1 Grand Prix races.In 1969, Enzo Ferrari sold 50% ofhis company to Fiat, which increasedits interest to 90% in 1988.In 1997, Ferrari purchased 50%of Maserati, another historicaland prestigious Italian brand,and gained full control of thecompany in 1999.
Highlights of the Year
1999 was a favorable year from every standpoint. Ferrari launched
its most important product, the 360 Modena, and sales rose to
5,588 units, up from 4,267 in 1998. The total includes 3,735
Ferrari cars and 1,853 Maserati automobiles. During the year,
Ferrari purchased the 50% of Maserati it did not own. This
positive development will enable Ferrari to realize considerable
synergies and revitalize the Maserati brand through a program
of industrial and commercial restructuring.
The Ferrari Racing Team was particularly successful in 1999,
winning back the Formula 1 Constructors’ Championship after
16 years.
At the consolidated level, Ferrari/Maserati reported revenues of 758 million euros
and operating income of 24 million euros.
Significant events that occurred in the early months of 2000 include the introduction
of the 360 Spider at the Geneva Auto Show, rising sales to end customers, with
motorists buying twice as many Maseratis as in the first two months of 1999,
and the outstanding performance of the racing team in the first Grand Prix races
of the current Formula 1 Championship.
Ferrari: Automobile sales bygeographical region of destination
Maserati: Automobile salesby geographical region
Italy
Rest of Europe
Rest of the world
Highlights
in millions of euros 1999 1998 (*) 1997
Net revenues 758 617 539
Operating income 24 11 36
As a % of revenues 3.1 1.9 6.6
Cash flow 61 47 58
Capital expenditures 63 61 50
Research and development 55 47 32
Net invested capital 185 170 162
Number of employees 2,282 2,264 1,922
(*) Figures do not include Maserati.
Ferrari makes exclusive cars, individually crafted
in limited series, for racing drivers, car enthusiasts
and collectors. Racing is the very reason of its
existence, enabling the Company to offer motorists
the ultimate in automotive performance. Ferrari is
the leader of its market segment.
Maserati automobiles are beguiling machines, made
in small series for car connoisseurs. Its prestigious
models are noticeable for their distinctive and
elegant styling and performance, which are
outstanding when compared with other models
in their class.
Products
Luca Cordero di Montezemolo,Ferrari’s Chairman and CEO.
MASERATI
Ferrari 360 Modena Berlinetta powered by an eight-cylinder 3586cm3 engine with output of 400 bhp (manualor F1-type gearbox)
456M GT/GTA 2+2 coupé powered by a 12-cylinder 5474cm3 engine with output of 442 bhp (manualor automatic)
550 Maranello Berlinetta powered by a 12-cylinder 5474 cm3 engine with output of 485 bhp (top speed 320 km/h)
Maserati Quattroporte Saloon powered by a V8 3217 cm3 engineEvoluzione with output of 335 bhp (manual or automatic)
3200 GT/GTA Coupé powered by a V8 3217 cm3 engine with output of 370 bhp (manual or automatic)
Product range
United States
10%
27%
46%
17%
16%
67%
17%
The 5474-cm3 65° V12 engine that powersthe 550 Maranello.
Trucks Commercial Buses Defense Firefighting Enginesvehicles vehicles vehicles
Europe Italy Astra V.I. ●
Iveco Aifo ●
Iveco Mezzi Speciali ●
Iveco ● ● ● ●
Irisbus Italia ●
Austria Lohr-Magirus ●
Czech Republic Karosa ●
France Camiva ●
Iveco France ●
Irisbus France ●
Heuliez Bus ●
Germany Brandshutz Gorlitz ●
Iveco Magirus Brandsch. ●
Iveco Magirus ●
Great Britain Seddon Atkinson Vehicles ●
Yugoslavia Zastava-Kamioni ●
Spain Iveco Pegaso ● ●
Irisbus Iberica ●
Ukraine Iveco-Kraz ● ●
Iveco Motor-Sich ●
Mercosur Argentina Iveco Argentina ●
Brazil Iveco Fiat Brasil ●
Venezuela Iveco Venezuela ●
Other regions Australia Int. Trucks Australia ● ●
China Naveco ●
Ethiopia Amce - Autom. Manuf. ●
India Ashok Leyland ●
Turkey Otoyol Sanayi ●
Commercial Vehicles
IVECO
14 15
Iveco (Industrial VehicleCorporation), a wholly-ownedsubsidiary of Fiat S.p.A., wascreated in 1974 as a result ofan agreement between Fiatand Klockner-Humboldt-Deutz, a German company.The new entity absorbed thecommercial vehicle activitiesof five different companies:Fiat, Lancia, OM, MagirusDeutz and Unic.OM, the oldest of thesecompanies, was founded in1849. Since its inception,Iveco adopted an innovativeindustrial organization,leveraging the availablesynergies and economiesof scale. In 1991, it took overEnasa-Pegaso, Spain’s largestmanufacturer of commercialvehicles. During the 90’s,Iveco expanded its internationalpresence, establishing jointventures and new companieson every continent. In 1998,together with Renault itestablished Irisbus, a jointventure with global reachto which both companiescontributed their busoperations.
Highlights of the year
During 1999, Iveco continued to implement a
strategy designed to foster its international
expansion and lengthen the value chain by offering
customers a comprehensive range of services.
In December 1999, it acquired a controlling interest
in the Fraikin Group, the unchallenged leader in
the French market for long-term leasing of
commercial vehicles and an established provider
of rental and fleet management services.
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Principal companies, production facilities and sales networks
Italy Rest of Europe Rest of the world Total
Production facilities 10 20 7 37
R&D centers 11 12 2 25
Dealers 89 378 189 656
Operating Sectors – Commercial Vehicles
Irisbus, a recently established 50-50 joint venture
with Renault, continued to grow, taking over Ikarus,
a Hungarian bus manufacturer.
Capital investment programs carried out during
1999 were focused primarily on the startup of
facilities that will manufacture Iveco engines and
the development of a new factory for the production
of Daily and Ducato commercial vehicles, which
the Sector is building through a joint venture with
Fiat Auto, at Sete Lagoas, in the Brazilian state of
Minas Gerais.
Giancarlo Boschetti,Iveco’s Chief
Executive Officer.
9%
44%
47%
14%
27%
59%
16 17
The new Daily was successfully introduced
throughout Europe in June 1999 and was later
honored as Van of the Year 2000.
During the year, Iveco’s range of heavy-load
vehicles grew to include the Euromover, a
low-cab model specifically designed for
municipal utilities.
The Sector also expanded its intermediate range, with the
introduction of the Eurocargo 120 EL models, which, with
their low beds and easy cab access, are particularly suited
for urban freight distribution.
The Sector also introduced the Cursor engine. This new
10-liter powerplant, with an output of 430 bhp, follows the
extremely successful Cursor 8, which was launched in 1998.
Operating Sectors – Commercial Vehicles
Products
Trucks Name Curb weight in tons Engine output in kW
Heavy-load road vehicles Eurotech 18-26 175-309
Eurostar 18-26 276-380
Seddon Atkinson 18-30 118-328
Heavy-load quarry/construction vehicles Eurotrakker 18-40 184-345
Astra 18-40 254-380
Intermediate vehicles Eurocargo 06-26 085-196
Eurocargo 4x4 10-14 105-167
Commercial Vehicles Name Curb weight in tons Engine output in kW
Daily Classe L 3.2 63-78
Daily Classe S 3.5 63-92
Daily Classe C 3.5-5.2 63-92
City and long-distance buses
Defense vehicles
Firefighting equipment
Engines Family Number of cylinders Engine output in kW
8100 4 in line 60-92
8000 4-6 in line 85-100 105-167
8360 6 in line 161-196
8460 6 in line 192-276
8210 6 in line 225-345
8280 8 V 260-378
Cursor 8 6 in line 180-259
Cursor 10 6 in line 287-316
Highlights
in millions of euros 1999 1998 1997
Net revenues 7,387 6,649 5,850
Operating income 311 261 203
As a % of revenues 4.2 3.9 3.5
Income (loss) beforeminority interest 180 192 174
Cash flow 433 368 374
Capital expenditures 359 307 265
Research and development 215 200 187
Net invested capital 2,359 1,764 1,440
Number of employees 36,217 31,912 32,074
18 19
The EuroTech and EuroStar heavy-load
vehicles with Cursor engines are
becoming the trucks of choice for
long-range and domestic freight hauling.
The heavy-load vehicle range features Cursor
10 engines and a number of other innovations.
These new engines have been designed
specifically for long-distance tractor trailers, a
key segment in Europe of the heavy-load market.
In 1999, the European market for commercial vehicles continued
to grow at the rapid pace it had experienced the previous year,
consolidating the expansionary trend that started in 1994. In
Western Europe, demand for commercial vehicles with a curb
weight equal to or greater than 3.5 tons totaled about 630,000
units, up 10.8% over the previous year. With the exception of
Great Britain (-2.8%), all European markets turned in a positive
performance. Particularly good results were achieved in Italy
(+24.8%) and Spain (+22.2%). Demand was also up significantly
in Germany (+13.6%) and in France (+12.4%).
Overall, Iveco sold 149,900 vehicles in 1999, or 9.6% more than
in 1998. Counting the contribution of joint ventures and licensees,
unit shipments totaled 192,000 vehicles, about the same as in
1998.
The Sector’s financing activities continued to grow both internally,
with the introduction of new products and the establishment
of new companies (Transolver Service GmbH in Germany and
Transolver Service S.A. in Spain), and through acquisitions (Fraikin).
The Sector’s net revenues amounted to 7,387 million euros,
or 11.1% more than in the previous fiscal year.
At 311 million euros (+50 million euros over 1998) operating
income was equivalent to 4.2% of revenues, up from 3.9% in
1998, owing to the beneficial effects of higher volumes and lower
product costs and overhead.�
Performance in 1999
Service Activities
Operating Sectors – Commercial Vehicles
In many businesses the notion that in certain cases
it is more efficient to pay for a service rather than to
purchase an asset has become an established belief.
Iveco has responded to the needs of the market by
creating Transolver, a company focused on supporting
the Sector’s marketing activities with a complete
package of products that can be sold by its
distribution system. Transolver includes Transolver
Finance, which offers its customers financing and
leasing options, and Transolver Services, which
provides vehicle rental services.
The acquisition of Fraikin is an example of this strategy
focused on expanding the company’s distribution
activities and services.
During 1999, the Transolver companies that provide
financing and rental services executed contracts
covering more than 22,500 new and used vehicles,
or 6% more than in 1998. In Western Europe,
Transolver’s penetration of the financing market rose
to 27% of new vehicles sold.
Sales Performance - Units sold
During 1999, the Sector’s profitability was adversely affected
by the phaseout of the old Daily line and the costs incurred
to launch the new range of these vehicles.
in thousands of units 1999 1998 in %
France 20.1 16.3 23.3
Germany 16.9 16.6 1.8
Great Britain 13.7 15.6 (12.2)
Italy 41.5 37.2 11.6
Spain 15.0 12.9 16.3
Western Europe 119.8 111.2 7.7
Rest of the world 30.1 25.6 17.6
Total sales 149.9 136.8 9.6
Joint ventures (*) 42.1 56.5 (25.5)
Grand total 192.0 193.3 (0.7)
(*)1998 data do not include Naveco sales (20,600 units).
Highlights of the year
On November 12, 1999, New Hollandand Case Corporation completed themerger of their respective operations.This transaction created CNH Global(CNH), the largest manufacturer ofagricultural equipment in the world,one of the top international manufac-turers of construction equipment andone of the world’s largest equipmentfinance companies, with the widestgeographical reach of any companyin its industry. CNH distributes its
strong, globally recognized brands in over 160 markets through an extensivenetwork of approximately 10,000 dealers and distributors. Fiat is CNH’s largeststockholder, with a 71% interest.This new company, whose securities are traded on the New York Stock Exchange,reported proforma consolidated revenues of about 10 billion euros in 1999.CNH’s products will continue to be distributed under the New Holland and Casebrands by the respective sales networks.In September 1999, Harbin New Holland Beidahuang Tractor Ltd, a joint venturein the People’s Republic of China in which CNH holds a 70% interest, started tomanufacture and sell a line of farm tractors with output ranging between 100 and180 bhp. In January 2000, CNH completed the acquisition of Canadian-basedFlexi-Coil Ltd, a leading producer of seeding systems and tilling equipment.
Agricultural and Construction Equipment
CNH GLOBAL
20 21
CNH Global is the newname of New Holland N.V.,following its acquisition ofCase Corporation in 1999.New Holland was createdin 1991 through the mergerof Ford New Holland andFiat Geotech. Ford builtits first tractor prototypein 1907 and started massproduction in 1917.Fiat’s first tractor cameto market in 1919.New Holland has becomea dominant force in theworld market for agriculturalequipment and has grownsignificantly in the area ofconstruction equipment.Case was founded in 1842 inWisconsin by Jerome IncreaseCase. Following developmentsand acquisitions (of strategicalimportance the acquisition ofInternational Harvesting in 1985),Case offers a broad range of farmequipment and is the largest U.S.manufacturer of small andmedium-sized constructionmachines. Since 1957 Case hasprovided superior financialproducts to serve its customers.
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Principal companies, production facilities and sales networks
Italy Rest of Europe Rest of the world Total
Production facilities 6 18 24 48
R&D centers 2 6 8 16
Dealers 174 3,890 5,936 10,000
Operating Sectors – Agricultural and Construction Equipment
Jean Pierre Rosso, CNH Global’s Chairman and CEO,and Umberto Quadrino, CNH Global’s Co-Chairman.
(pro-forma, incl. Case)
6%
37%
57%
14%
40%
46%
(pro-forma, incl. Case)
Agricultural equipment Construction equipment
Europe Italy New Holland ● ●
Austria Case ●
Belgium New Holland ●
France Case ● ●
New Holland ●
Germany Case ●
New Holland ●
Poland New Holland ●
United Kingdom Case ● ●
New Holland ●
NAFTA United States Case ● ●
New Holland ● ●
Canada New Holland ●
Mexico Case ●
Mercosur Brazil Case ● ●
New Holland ●
Other regions Australia Case ●
22 23Operating Sectors – Agricultural and Construction Equipment
ProductsCNH is managed as a global company, keeping
separate Case and New Holland brand names and
dealer networks. CNH is organizing its manufacturing
operations with global product line responsibilities,
and CNH will organize its sales and marketing
activities on a geographic basis, keeping separate
the dealer and customer-related activities of New
Holland and Case.
During the year, the CNH’s Equipment Operations
continued to renovate its product line and expand
its sales network. During the first quarter, Case
introduced the C Series wheel loader line, designed
in response to customer requirements for optimum
reliability and durability on the job site. Case also
introduced a new high-lift telescopic handler and a
new 7-ton excavator built for contractors who want
the versatility and productivity of a larger excavator,
but the maneuverability of a smaller unit.
In November, New Holland launched its new TM line
of tractors, available with engines with output ranging
from 92 and 135 bhp. In Europe, CNH introduced
new square balers, which are the first machines of
this kind to be equipped whit a self-steering from
axle for outstanding driving comfort.
Financial Services
CNH Capital, a Sector company, provides broad-
based financial services for the global marketplace
through various wholly owned subsidiaries and joint
ventures in the United States, Canada, Argentina,
Australia, Brazil and Europe.
CNH Capital provides and administers retail financing
to end-use customers for the purchase or lease of
new and used CNH and other agricultural and
construction equipment. CNH Capital also facilitates
and finances the sale of insurance products and other
financing programs to retail customers. In addition,
CNH Capital provides wholesale financing to CNH
dealers and rental equipment yards.
CNH Capital also provides financing options to dealers
and non-captive third parties to finance inventory,
working capital, real estate acquisitions, construction
Complete horsepower range
Two-wheel drive, four-wheel drive and Quadtrac
Specialty tractors
Combines
Cotton pickers
Grape and sugar cane harvesters
Self propelled and pull type harvesters
Balers
Complete line of sprayers
Planters and seeding systems
Precision farming systems
Tillage equipment
Skid-steer loaders
Loaders/backhoes
Mini/midi excavators
Telescopic handlers
Forklifts
Trenchers
Horizontal drills
Crawler and wheel excavators
Wheel and crawler loaders
Graders
Dozers
Harvesting equipment
Hay and forageequipment
Crop production
Constructionequipment
Light-to medium-construction equipment
Heavy constructionequipment
Agriculturalequipment
Business Unit Product Lines
Tractors
Highlights
in millions of euros 1999 (*) 1998 1997
Net revenues 5,246 5,127 5,284
Operating income 371 452 602
As a % of revenues 7.1 8.8 11.4
Income beforeminority interest 216 507 422
Cash flow 333 624 528
Capital expenditures 178 151 135
Research and development 158 136 113
Net invested capital 5,777 1,123 592
Number of employees 19,049 21,344 19,077
(*) Excluding Case.
24 25
CNH is a leader in the mechanized
farming market and one of the top international
producers of construction equipment.
and remodeling, business acquisitions, dealer
systems and service and maintenance equipment.
In North America, CNH Capital offers customers a
private-label credit card to purchase parts, service,
rentals implements and attachments from its dealers.
CNH Capital’s Soris Financial offers a broad range
of retail and wholesale financing products, including
equipment and commercial loans and leases for North
American manufactures, dealers, distributors, and
their customers. Soris Financial also facilitates and
finances the sale of insurance products to retail
customers.
At December 31, 1999, CNH Capital’s serviced
portfolio of receivables was approximately 11 billion
euros. On a pro forma basis, after giving effect to the
merger, CNH Capital’s revenues were approximately
737 million euros in 1999.
In 1999, the tractor market grew slightly in Western Europe. In North America,
although overall tractor sales evidenced a small increase, this was entirely
attributable to the growth in sales of low horsepower tractors. The North American
market for more powerful tractors, such as those produced by CNH, continued
to reflect ongoing market weakness. In Latin America, the market held steady,
slightly above 1998 levels.
Sales of heavy construction equipment experienced an overall decline, as buoyant
Performance in 1999
demand in Western Europe and Latin America could
only partially offset a sharp decline in North America.
Excluding Case, which was not yet consolidated, CNH
sold 78,900 farm tractors in 1999, down slightly from
the 80,800 units shipped in 1998. CNH’s revenues
amounted to 5,246 million euros, or 2.3% more than in
the previous fiscal year. This increase, which occurred
despite a reduction in unit sales, was due mainly to the
appreciation of the U.S. dollar, which is the Sector’s
reporting currency. When Case’s 1999 sales are included
on a pro forma basis, CNH’s revenues rise to about 10
billion euros.
Excluding Case, operating income came to 371 million
euros. The decrease from the 452 million euros earned
in 1998 is due mainly to a drop in units shipped and an
unfavorable sales mix.
Operating Sectors – Agricultural and Construction Equipment
Cast iron Aluminum Magnesium
Europe Italy M.P.I. ●
Teksid For ●
Teksid ● ●
France Fonderies Aluminium Cleon ●
Fonderies du Poitou ● ●
Metallurg. du Temple ●
Societé Bretonne de Fonderie et Mécanique ●
Poland Teksid Poland ● ●
Portugal Funfrap-Fundicao Portug. ●
NAFTA Canada Meridian Operations ●
Mexico Teksid Aluminio de Mexico ●
Teksid Hierro de Mexico (*) ●
United States Magnesium Products ●
Teksid Aluminum Foundry ●
Mercosur Argentina Teksid Argentina ●
Brazil Teksid do Brasil ● ●
Asia China Hua Dong Teksid Automotive Foundry Co. (*) ●
Nanjing Teksid Iron (*) ●
Nanjing Teksid Aluminum (*) ●
India Teksid Kalyani ●
Turkey Cevher Dokum Sanayi (*) ●
(*) Affiliated companies.
Highlights of the year
In 1999, with a transaction involving a capital increase reserved
for the Renault Group, Teksid completed the purchase of Renault’s
foundry activities. Following this transaction, Fiat S.p.A. will continue
to hold a controlling interest of 66.5% in Teksid, while the French
Group will own the remaining 33.5%.
In the United States, the Sector established Teksid Aluminum
Components (100% Teksid). In Canada, it laid the groundwork for
an expansion of manufacturing capacity at Meridian Technologies
Inc., a world leader in magnesium technology owned for 51% by
Teksid and for 49% by Norsk Hydro. Another important development
was the gradual integration of the former Renault facilities, with the
goal of increasing the product specialization of the individual
manufacturing locations. This resulted in the creation of two centers of excellence
in Italy: Crescentino for cast iron and Carmagnola for aluminum. The output of
the Carmagnola cast-iron production unit, which will be phased out in July 2001,
will be picked up by other Sector locations in Italy and abroad. These transactions
enabled Teksid to consolidate its position as a world producer of cast-iron, aluminum
and magnesium components and strengthen its leadership of the European market.
In 1999, the Sector had revenues of 1,682 million euros, up more than 44% over
the previous fiscal year. Operating income rose to 76 million euros (4.5% of
revenues), compared with 42 million euros (3.6% of revenues) in 1998.
Metallurgical Products
TEKSID
26 Operating Sectors – Metallurgical Products 27
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Highlights
in millions of euros 1999 1998 1997
Net revenues 1,682 1,165 1,190
Operating income 76 42 54
As a % of revenues 4.5 3.6 4.5
Income beforeminority interest 26 4 20
Cash flow 123 74 98
Capital expenditures 182 73 78
Research and development 23 16 15
Net invested capital 793 504 521
Number of employees 14,522 10,981 11,730
Principal companies and businesses
Founded in 1978, Teksidinherited the steel makingand metallurgical expertisedeveloped by Fiat duringsixty years of activity. Afterdivesting its primary steelmaking activities in 1982,the Company focused itsoperations on the productionof metallurgical components.Toward the end of the 1970’s,Teksid embarked on aninternationalization strategy,establishing manufacturingfacilities in Brazil and NorthAmerica. Over the last twentyyears, the Sector’s geographicalexpansion has been patterned toachieve the greatest proximity toits customer’s facilities worldwide.The largest expansion ofproduction capacity occurred inEurope (Italy, France, Portugal andPoland), North and South America(Canada, United States, Mexico,Brazil and Argentina)and the Far East (China).
Italy Rest of Europe Rest of the world Total
Production facilities 7 8 11 26
R&D centers 4 3 5 12
Paolo Filomeni,Teksid’s Chief
Executive Officer.
28%
38%
34%
31%
37%
32%
28 Operating Sectors – Metallurgical Products 29
Business Unit Core products
Cast iron Engine blocks
Cylinder heads
Drive shafts
Cam shafts
Exhaust manifolds
Differentials
Struts
Wishbones
Aluminum Cylinder heads
Engine blocks
Gearboxes/clutches
Suspension components
Magnesium Instrument panels
Seats
Products
14%
43%
Revenues by business unit
Cast iron
Aluminum
Magnesium
43%
28%
Revenues by customer
Other carmakers
Fiat Group
72%
The use of magnesium alloys in the productionof automotive components has grown
substantially in the past three years. The worldmarket has consolidated first generation
products (bulkhead beams, gearboxes, steeringwheel shafts, seat backs) and, at the same
time, has developed new components(instrument panels, frames for moving body
parts) fully capable of benefiting from thepotential of pressure casting technology
(integration of functions, reduced wall thickness).The substantial weight reduction obtainable
by replacing steel (-40%) and aluminum(-10%) for the same performance allowsmagnesium to maintain its uncontested
position as the metal for the future of ecologicalcars (low emissions, recyclable).
The Sector is a world-leader producer
of engine blocks (cast iron), cylinder
heads (aluminum) and instrument panels
(magnesium).
Fiat Group
Fiat Auto, Iveco, CNH Global.
Other carmakers
Renault, Daimler Chrysler, General Motors,
Ford, Cummins, Volkswagen, Volvo, Toyota,
BMW.
Competitive Positioning
Principal customers
Policast currently represents an interesting processalternative for the production of automotive componentswith a particularly complex geometry.In particular, engine designers are increasingly interestedin exploiting the “near net shape” potential of the processapplied to aluminum alloys for the making of cylinderheads, valve covers, and engine blocks.The recent development of materials used in the process(polymers, paints, sands) together with increasedexperience in the design of molding equipment(polystyrene molds, gluing and painting stations) have
made it possible to achieve high levels of quality in theresulting products.Teksid is a world leader in the production of aluminum-alloy Policast castings. In addition to the Carmagnolafacility, another plant specializing in this technology andcapable of meeting the fast growing demand of the NorthAmerican market is being built in Alabama, United States.
Components
MAGNETI MARELLI
30 Operating Sectors – Components 31
Magneti Marelli was founded in1919 by Fiat and Ercole Marelli. In 1938, Enrico Fermi, a NobelPrize winner for physics, wasplaced at the head of theCompany’s researchlaboratories. In 1939, theCompany carried out its firsttelevision transmission andreception experiments and,after the Second World War,produced Italy’s first televisionsets. However, it left thisbusiness in the 1970’s. In 1967,Fiat took over this company,transforming it into a globalcenter for the production ofautomotive components. In1994, Magneti Marelli was mergedwith Gilardini. In 1997 it acquiredthe Cofap Group, South America’slargest components producer. In1998, the Company entered thequick-service business, acquiringMidas’ European service centers,and started to offer online servicesthrough Viasat, a 50-50 joint ventureestablished with Telespazio, aTelecom Italia company, to provideinfomobility products based onsatellite technologies.
Highlights of the year
The most important events of 1999 were the conclusion of an
agreement with Textron Automotive in the United States for the
production of dashboard modules, the acquisition of Fiat Auto’s
Suspension Systems operations in Italy, Poland and Brazil, and
the establishment of Automotive Lighting Holding, a 50-50 joint
venture with Bosch of Germany to which both companies transferred
their worldwide lighting systems activities. Coupled with the
acquisition of Seima, a producer of automotive headlights and
taillights, in 2000, this transaction will propel Magneti Marelli into
the rank of co-leader of the global lighting systems market.
The Sector is carrying out an ambitious program designed to
streamline its portfolio of businesses, focusing its efforts on carefully
selected industry segments. With this in mind, it divested its Rotary Devices
and Fuel Systems Divisions and plans to sell its Lubricants Division.
The 1999 fiscal year ended with revenues of 4,062 million euros, up more than
7% over 1998, and with an operating income that at 108 million euros (2.7% of
revenues) was almost double the figure reported a year earlier (56 million euros,
or 1.5% of revenues).
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
19%
48%
33%
Highlights
in millions of euros 1999 1998 1997
Net revenues 4,062 3,793 3,451
Operating income 108 56 99
As a % of revenues 2.7 1.5 2.9
Income beforeminority interest 107 21 78
Cash flow 310 254 271
Capital expenditures 209 222 207
Research and development 185 195 167
Net invested capital 1,289 1,270 991
Number of employees 25,613 29,398 24,352
Domenico Bordone,Magneti Marelli’s
Chief Executive Officer.
Principal companies and businesses
26%
46%
28%
Italy Rest of Europe Rest of the world Total
Production facilities 20 18 19 57
R&D centers 8 8 8 24
Powertrain Suspension Interior and Electronic Aftermarketsystems systems bodywork systems and
systems services (**)
Europe Italy Automotove Lighting (*) ●
Magneti Marelli ● ● ● ● ●
Magneti Marelli Climatizzazione ●
Sistemi Sospensioni ●
France Magneti Marelli France ● ● ● ●
Germany Automotove Lighting (*) ●
Great Britain Automotove Lighting (*) ●
Poland Automotove Lighting (*) ●
Magneti Marelli Poland ● ●
Spain Magneti Marelli Iberica ● ● ● ●
NAFTA Mexico Automotove Lighting (*) ●
Magneti Marelli Mexico ● ●
United States Cofap of America ●
Magneti Marelli USA ●
Mercosur Argentina Magneti Marelli Argentina ● ●
Magneti Marelli Denso ●
Brazil Magneti Marelli Brasile ● ● ● ●
Magneti Marelli Cofap ●
Other regions China Magneti Marelli Guangzhou ●
India Magneti Marelli India ●
South Africa Magneti Marelli Pty ●
Turkey Magneti Marelli Electronic ●
(*) Magneti Marelli and Bosch 50-50 joint venture.(**) Other companies active in this area include Midas (Italy, France, Poland, Spain and Brasil) and Viasat (Italy).
Interior and bodywork systems
32 Operating Sectors – Components 33
Business Unit Product lines
Powertrain systems Engine control systemsExhaust systemsSelespeed transmission systems
Suspension systems Front and rear suspensionsShock absorbers
Interior and bodywork systems Climate control systemsDashboard modulesLighting systemsRearview mirrors
Electronic systems Instrument panelsElectronic control unitsOnline systems
Aftermarket and services Quick-repair servicesReplacement partsInfomobility servicesLubricants
Products
Revenues by business unit
Electronic systems
Powertrain systems
Suspension systems
Aftermarket and services
40%
Revenues by customer
Other carmakers
Fiat Group
60%
The Sector is co-leader of the world’s lighting
systems market and is the second largest European
producer of instrument panels. Also in Europe, it
ranks third among manufacturers of gasoline fuel
injection systems, climate control systems and
rearview mirrors.
Competitive position
Magneti Marelli’s products canaccount for as much as 35% ofthe modules and systems thatcomprise a motor vehicle.
Fiat Group Fiat Auto, Maserati, Iveco,
CNH Global.
Other carmakers Peugeot/Citroën, Renault,
Volkswagen, BMW,
DaimlerChrysler.
Principal customers
Magneti Marelli’s high-end instrument panels combineseveral essential functions, such as an encryptedanti-theft device (immobilizer), an automatic oil changereminder and a diagnostic system with a dot-matrixdisplay of alarms and faults. It can also display informationprovided by a navigation system.
Equipped with a control unit that reads and processesthe input of a sophisticated system of onboard sensors,Magneti Marelli’s leading-edge climate control systemdelivers a massive flow of 430 m3 of air per hour and canbe programmed with different temperature settings forthe driver and front passenger seats.
31%
17%
24%
9%
19%
Highlights of the year
Comau is a global supplier of industrial automation systems to
automotive manufacturers, to whom it offers a complete range of
services: product and process engineering; logistics and management,
including program management; manufacturing, installation and
start-up of production lines and equipment; and maintenance services
that ensure the proper and reliable operation of industrial facilities.
In 1999, Comau completed important acquisitions with the goal of
strengthening its presence in its core business segments (bodywork,
mechanical engineering and maintenance services). Fiat’s acquisition
of Pico, a leading U.S. producer of bodywork systems, and Comau’s
purchases of Renault Automation and Sciaky structurally reinforced
the Sector’s presence in its principal markets and its position as a
supplier of the major carmakers.
Comau Service, a Business Unit with outstanding growth potential that offers
innovative maintenance services for automotive production facilities, became
operational in 1999.
Owing in part to the acquisitions mentioned above and including Pico’s contribution,
the Sector reported revenues of 1,693 million euros in 1999, double the figure
booked a year earlier. Operating income totaled 43 million euros (2.5% of revenues).
In 1998, Comau without Pico reported an operating loss of 1 million euros.
In 2000, Comau signed an important agreement with Fanuc, in Japan, in the area
of robotic components that will help both companies strengthen their respective
core businesses.
Production Systems
COMAU
34 Operating Sectors – Production Systems 35
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Highlights
in millions of euros 1999 1998 1997
Net revenues 1,693 843 841
Operating income (loss) 43 (1) 27
As a % of revenues 2.5 (0.1) 3.3
Income (loss) beforeminority interest (8) (6) 12
Cash flow 30 12 29
Capital expenditures 26 14 16
Research and development 20 14 17
Net invested capital 485 165 179
Number of employees 16,943 7,103 4,809
Principal companies and businesses
Fiat started regular andorganized production ofmachine tools in 1935. TheSector was reorganized in1973 with the establishmentof Consorzio MacchineUtensili (CO.MA.U.), aconsortium of Fiat and otherTurin manufacturers, whichresulted in the creation ofComau S.p.A. in 1997 andhelped significantly expandsales volume. Over the years,by acquiring and absorbingother companies, Comaubroadened its product range,becoming one of the few “total”suppliers of automation systemsfor the automotive industry.In the mid 1990’s, the Sectorlaunched a globalization effort,developing organizations thatcovered a complete portfolioof businesses in the majorindustrial regions of the world.
Italy Rest of Europe Rest of the world Total
Production facilities 7 11 20 38
R&D centers 10 4 � 1 15
Piero Maritano,Comau’s Chief
Executive Officer.
Product and Production Maintenanceprocess Systems services
engineering
Europe Italy Comau ●
Comau Service ●
Italtech ●
UTS ●
France Renault Automation Comau ● ● ●
Comau Sciaky ●
Germany Comau Deutschland ●
Poland Comau Poland ● ●
United Kingdom Comau Estil ● ●
Spain Mecaner ●
NAFTA Mexico Trebol Tepotzotlan ● ●
United States Progressive Tools & Industries ● ●
Mercosur Brazil Comau do Brasil ● ●
Comau Service do Brasil ●
Argentina Comau Argentina ● ●
Other regions China Comau Cina ●
India Comau India ●
South Africa Aims ●
26%
47%
27%
42%
40%
18%
36 Operating Sectors – Production Systems 37
Business Unit Product lines
Engineering Product and process
engineering
Bodywork Sheet-metal dies
Bodywork assembly and welding systems (sheet-metalworking, final assembly, materials handling)
Robotics
Painting Systems Painting systems
Plastics Plastic dies
Injection molding presses
Mechanical Machining systems
Engineering Mechanical assembly systems
Maintenance Maintenance services
Products
Revenues by business unit28%
Revenues by customer
Other carmakers
Fiat Group
72%
The inclusion of Pico (Progressive Tool &Industries Co.) in the Production Systems
Sector will strengthen Comau’s position in theNAFTA market, providing it with the specialized
knowhow and resources that Pico hasacquired over the last 20 years as the leadingsupplier of bodywork assembly and weldingsystems to the largest carmakers in America. A finely meshed network of skilled technicalrepresentatives, who are available directly at
production sites, is an invaluable tool inincreasing customer loyalty and ensuring a
steady stream of orders for new systemsand maintenance services.
The Sector is the world’s leading
producer of bodywork systems.
Fiat Group
Fiat Auto, Iveco.
Other carmakers
General Motors, Ford, DaimlerChrysler,
Volkswagen Group, BMW, Renault and PSA.
Competitive position
Principal customers
All Comau products and services reflect sophisticated engineeringand the use of leading-edge hardware and software applications.They also embody years of experience with the top carmakers inthe world, an in-depth knowledge of the market, decades of researchand innovation, and the contribution of Comau’s men and women,who day after day work side-by-side with their customers, developingindividual and total solutions for every aspect of manufacturing.
Comau’s goal is to provide simple and effective automation systems.Even the most complex automation system, the most completeproduction line, the most sophisticated equipment must be easy touse, cost-effective to operate, and flexible and adjustable enoughto allow shifts in component production in response to changingmarket needs. From the start of the design process, Comau worksclosely with its customers, providing a comprehensive approach tothe development of production alternatives — from engineering tomanufacturing and from assembly to maintenance services —offering a “full service” package to customers throughout the world.
Engineering
Maintenance
Bodywork
Plastics
Painting Systems
58%
4%
2%
20%
4%
Mechanical Engineering12%
Since its founding, Fiat hasbeen noted for its ability todevelop, test and manufactureengines for the differentbusinesses included in theGroup. Aircraft productionstarted with the beginningof the First World War andcontinued until 1969. At thattime, Fiat transferred itsframe-production activities toAeritalia, a newly establishedcompany, concentratinginstead on the manufactureof engines. In 1976, allaviation activities weretransferred to Fiat AviazioneS.p.A., an independentcompany that later changed itsname to FiatAvio. In 1994, withthe acquisition of BPD Difesa eSpazio, FiatAvio strengthened itsposition in the aerospace market,which has grown to represent itssecond main area of strategicinterest. The acquisition of AlfaRomeo Avio in 1997 expandedFiatAvio’s presence as a providerof maintenance services, with afurther extension of the valuechain.
Aviation
FIATAVIO
38 Operating Sectors – Aviation 39
Highlights of the year
FiatAvio develops, produces and distributes components and systems
for airplane and helicopter engines, and assembles turbines for marine-
propulsion applications. Its space activities manufacture propulsion
systems for launchers and satellites. The Sector has also developed
overhaul services for aircraft engines and energy production facilities.
In the area of commercial aircraft engines, FiatAvio participates in
important development and production programs in partnership
with the world’s top engine manufacturers. In the field of Defense
applications, the Sector is a partner in the European consortium
that is developing and will manufacture the EJ200 engine for the
new Eurofighter.
FiatAvio has developed a significant presence in the area of space
activities. In Europe, it collaborates in the development of the
Ariane programs, for which it produces such high-tech components as boosters
and separation engines for the Ariane 4 launcher, and boosters and a liquid
oxygen turbopump for the Ariane 5 launcher.
In 1999, the Sector had revenues of 1,361 million euros, about the same as in
the previous fiscal year. Operating income increased to 109 million euros (8%
of revenues), compared with 60 million euros in 1998 (4.4% of revenues).
In 2000, FiatAvio helped establish Turboprop International GmbH (22% FiatAvio,
12% ITP, 33% Motoren und Turbinen Union and 33% Snecma Moteurs), which
will coordinate the design, development and production of the M138 engine for
the A400M military transport aircraft.
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Highlights
in millions of euros 1999 1998 1997
Net revenues 1,361 1,361 1,263
Operating income 109 60 56
As a % of revenues 8.0 4.4 4.5
Income beforeminority interest 61 79 18
Cash flow 145 167 112
Capital expenditures 42 36 37
Research and development 128 99 119
Net invested capital 163 159 244
Number of employees 5,590 5,962 6,505
Italy French Guyana Total
Production facilities 9 2 11
R&D centers 8 � – 8
This Sector is a worldwide leader in the production of
accessory gearboxes for aeronautical engines. In this area
it also holds the European leadership position in the production
of power reduction boxes, afterburners, and helicopter
engines. In aerospace, it is the European leader in the
production of solid-fuel propulsion engines and separation
engines.
Competitive position 52%
12%
2%
Revenues by business unit
Gas Turbines
Engine Overhaul
Aviation16%
18% Space
Automation electronics
Saverio Strati,FiaAvio’s Chief
Executive Officer.
Products Partners
Accessory gearboxes General Electric, Pratt & Whitney,
Rolls-Royce, Motoren und Turbinen
Union, ITPPower reduction boxes Pratt & Whitney Canada
Low pressure General Electric, Pratt & Whitney, turbines Rolls-Royce, Pratt & Whitney
Canada, Snecma Moteurs, Motorenund Turbinen Union, ITP
Heaters and Rolls-Royce, Pratt & Whitney, afterburners Motoren und Turbinen Union, ITP,
Allied SignalAuxiliary Allied Signal, Others power units
Helicopter engines General Electric Helicopter transmissions Eurocopter, Sikorsky Marine propulsion General Electric and automation
Aircraft engine components and systems
Products Partners
9.5 to 230 ton solid-fuel Snecma Moteurs, SNPE propulsion engines
Separation engines Liquid oxygen Snecma Moteurs turbopumps
Satellite launchers
Space
Products
28%
41%
31%
1%
97%
2%
Roll ing Stock and Railway Systems
FIAT FERROVIARIA
40 Operating Sectors – Rolling Stock and Railway Systems 41
Fiat built its first tram in 1906,but officially entered the rollingstock market in 1917, whenit acquired the Diatto worksin Turin. In the 1920’s, theCompany manufacturedthe world’s first electriclocomotive, followed in the1930’s by the Littorina, anenormously successful self-propelled rail car equippedwith an internal combustionengine, originally poweredwith gasoline and later withdiesel fuel. In response to theneed for faster, more comfortableand efficient transportation, FiatFerroviaria developed its tiltingbody train and a series of high-speed bogeys, which it started tomanufacture in the 1970’s utilizingoriginal and futuristic solutions.The Sector’s low-platformtrams have made an importantcontribution to the developmentof light subways and surface urbantransportation systems.
Highlights of the year
Fiat Ferroviaria operates in rail and tramways, producing traction
systems, rolling stocks of various types, railway bogeys, trams and
subway systems.
The Sector has been remarkably successful in the international
markets with its Pendolino, a tilting-body train that can achieve
higher speeds on existing railway lines and assure maximum ride
comfort, with limited investments and a short implementation
schedule.
In 1999, the markets where the Sector operates were relatively
stagnant, with the exception of urban transport systems in Italy.
At December 31, 1999, Fiat Ferroviaria’s order portfolio totaled
1,288 million euros (1,599 million euros at the end of 1998).
Revenues totaled 375 million euros in 1999, slightly less than in the previous
fiscal year. Operating income was 13 million euros (3.5% of revenues), down
from 18 million euros in 1998 (4.6% of revenues). Orders booked under extremely
competitive conditions account for most of this decline.
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Highlights
in millions of euros 1999 1998 1997
Net revenues 375 389 384
Operating income 13 18 26
As a % of revenues 3.5 4.6 6.7
Income (loss) beforeminority interest 3 (1) 14
Cash flow 18 15 30
Capital expenditures 11 12 14
Research and development 9 9 9
Net invested capital 29 94 90
Number of employees 2,109 2,294 2,401
The Pendolino trainTrains
Trains in Trains on under operation order option Total
Italy 40 – – 40
Switzerland 9 24 � – 33
Spain 10 – � 14 24
Germany 60 3 � – 63
United Kingdom – 53 25 78
Finland 2 8 15 25
Portugal 5 5 – 10
Czech Republic – 7 – 7
Croatia – 3 – 3
Total 126 103 54 283
Berlin
Dresden
Stuttgart
Wien
Bern
Lyon
München
Praha
MilanoVeneziaTorino
Bologna
Roma
Bari
Helsinki
BarcelonaMadrid
Lisbon
Oporto
Salzburg
Nünberg
Turku
Tampere
Düsseldorf
Furtimwald
Hof
Zürich
Basel
Pescara
Genova
Marseille
Firenze
Napoli
Reggio Calabria
Frankfurt a.M.
Genève
Valencia
London
Glasgow
Ljubijana
Maribor
EdinburghEdinburgh
ManchesterLiverpool
Birmingham
Italy Switzerland Total
Production facilities 3 1 4
R&D centers 3 � 1 4
Lines in operationContracts
km/h onconventional tracks250
The Sector is a leader in the design and production of variable-
geometry trains with active tilting-body systems, and holds
a preeminent position in the design and production of railway,
tram and subway bogeys.
Competitive position
10%
13%
55%
Revenues by business unit
Other trains
High-speed trains
Pendolino trains8%
14% Tram and subway systems
Components
Maurizio Magnabosco,Fiat Ferroviaria’s
Chief Executive Officer.
1%
33%
66%
11%
89%
La Stampa uses a complete range of
electronic publishing tools: a professional
database available worldwide in real time,
CD-ROM publishing of multimedia
projects, Internet presence through
the www.lastampa.it website with a
dedicated editorial staff, electronic
distribution (Dayfax summary edition
and an edition available at the website
of the National Telemedicine Project
in a version accessible to visually
challenged persons).
Publishing and Communications
ITEDI
42 Operating Sectors – Publishing and Communications 43
Fiat has been active in thepublishing business since1926, when it establishedEditrice La Stampa, theeponymous publisher ofTurin’s daily. The newspaper,which was created in 1867as the Gazetta Piemontese,changed its name to LaStampa in 1895, when it washeaded by Alfredo Frassati.Publikompass, a companyfounded in 1972 to selladvertising space for Italiancommunication media on alicensee basis, has significantlyexpanded its customer portfolio. In 1979, Fiat established Itedi,to which it transferred all itspublishing and communicationsinterests.
Highlights of the year
La Stampa, one of Italy’s premier non-specialized national circulation
newspapers, is also present on the Internet with its own website,
www.lastampa.it. The new edition of this site, which went on line
on December 18, 1999 with content provided by a dedicated
editorial staff, is recording as many as 100,000 page-hits a day.
La Stampa Interattiva, a subsidiary that was set up toward the end
of 1999, is developing an Internet portal in cooperation with CiaoWeb.
Publikompass is a leader among Italian companies that solicits
advertising sales on a licensee basis and is the advertising partner
of 33 publishers. At the end of the year, the Sector sold a 75%
interest in its non-strategic industrial publishing activities, which
are headed by Satiz, to MSX International, a U.S. group.
In 1999, net revenues totaled 413 million euros, down from the previous fiscal
year due to the deconsolidation of the Satiz activities. Operating income was
equivalent to 17 million euros (4.1% of revenues), compared with 19 million euros
in 1998 (4.3% of revenues).
In February 2000, Itedi launched Koinet, the first business-to-business portal
developed by a major Italian group. Koinet is specifically designed to meet the
communication needs of small and medium-sized businesses.
Revenues by business unit
Advertising
Newspaper publishing
Industrial publishing
Highlights
in millions of euros 1999 1998 1997
Net revenues 413 437 406
Operating income 17 19 11
As a % of revenues 4.1 4.3 2.7
Net income (loss) 11 – 2
Cash flow 19 11 13
Capital expenditures 8 9 7
Net invested capital 25 21 33
Number of employees 934 1,473 1,505
La Stampa is Italy’s third-largest national
circulation newspaper.
Publikompass is the largest non-captive
company licensed to sell advertising on
behalf of Italian newspapers and enjoys
a significant presence in the periodical,
Internet and television advertising
markets.
Competitive position
Alberto Nicolello,Itedi’s Chief
Executive Officer.
Newspapers● La Stampa, with daily circulation of 400,000
copies, which are distributed with varioussupplements, and reach 1,650,000 readers.
● The weekly Specchio, with circulation ofabout 210,000 copies.
Multimedia advertising licenseeAbout 70,000 pages of advertising space sold
and 100,000 customers.Sells advertising space for 11 newspapers,
11 periodicals, 6 local TV stations and 20Internet sites.
Editorial offices: TurinCorrespondent offices: Rome, Milan, Washington, Moscow,
Paris, London, Bonn and Brussels.Field offices in all the provincial capitals of the regions of
Piedmont, Liguria and Valle d’Aosta.Collaborative relationships with Le Monde (of which Editrice
La Stampa is a stockholder), The New York Times, The LosAngeles Times and The Guardian.
Head office: MilanAn area office in Rome.24 branch offices in all the main Italian business centers and
where the major clients are located.The staff consists of 298 employees and the sales organization
of 320 agents.
Publikompass
Editrice La Stampa
Principal companies and businesses
48%
33%
19%
Toro Assicurazioni Life insurance and casualty insurance products and reinsurance
Nuova Tirrena Life insurance and casualty insurance products and reinsurance
Roma Vita Joint venture with Banca di Romafor the distribution of life insurance products
Giano Assicurazioni Joint venture with Banca di Roma for the distribution of casualty insuranceproducts through the bank-branch network
DAS Legal assistance insurance
Toro Targa Distribution of casualty insuranceAssicurazioni products (auto insurance primarily)
through the Fiat dealer network
Phenix Seguradora Casualty insurance products in Brazil
Continent Life insurance and casualty insurance Assurances Group products and reinsurance in France
Guardian Royal Life insurance and casualty Exchange Group insurance products and reinsurance
Insurance
ASSICURAZIONI
44 Operating Sectors – Insurance 45
Highlights
Consolidated premiums
1995 1996
in millions of euros
0
1,000
2,000
3,000
4,000
1998 19991997
Highlights of the year
The Italian insurance market posted strong growth in 1999,
expanding by about 20% compared with the previous year. The
gains were especially pronounced in life insurance, which increased
by more than 30%, and now accounts for 58% of all premiums
written. Unit- and index-linked policies, which are linked to the
performance of mutual funds or stock market indices, have been
particularly successful, and sales through bank branches have
expanded at a brisk pace. In the French market, which is the
Sector’s other major profit center, demand was about the same
as in 1998. The Sector had an outstanding year, reporting higher
insurance revenues (premiums written totaled 4,088 million euros,
+29%) and an improved operating performance (net income of 92
million euros, +44%). The programs introduced in recent years
were particularly successful, including the sale of insurance products through
such innovative channels as bankassurance (Roma Vita +72%) and Fiat dealers
(Toro Targa Assicurazioni, +103% in Italy). In December 1999, in continued
pursuit of its growth strategy, Toro acquired the French operations of the Guardian
Group, which will be merged with the Continent Group, strengthening its range
of products. The newly acquired companies, which will be consolidated as of
2000, booked premiums totaling more than 180 million euros in 1999.
At the end of 1999, the Sector received the authorizations required to operate
in Poland through a direct subsidiary.
in millions of euros 1999 1998 1997
Consolidated premiums 4,088 3,169 2,162
Premiums earned 3,922 2,959 2,016
Income before taxes 178 116 133
Net incomebefore minority interests 92 64 88
Technical reserves 9,733 6,386 4,738
Investments in financialassets and real estate 10,867 7,393 5,520
Stockholders’ equity 1,444 1,334 1,083
Number of employees 2,907 2,869 2,786
Revenues by geographical regionof destination
Employees by geographical region
Italy
Rest of Europe
Rest of the world
Toro Assicurazioni ranks third among Italian insurance
groups. Based on current estimates, Roma Vita is
the second largest service provider in the
bankassurance market.
Competitive position
Principal companies and activities
TORO
Consolidated premiums per employee
1995 1996
in thousands of euros
0
375
750
1,125
1,500
1998 19991997
Investments and technical reserves
1995 1996
in millions of euros
0
2,500
5,000
7,500
10,000
1998 19991997
Life insurance
Casualtyinsurance
Technical reserves
Investments
Italy Rest of Rest of TotalEurope the world
Agents 919 400 – 1,319
Dealers 814 305 227 1,346
Bank branches 1,300 – – 1,300
Premiums by business unit
Other casualty insurance
Automobile insurance
Life insurance
Francesco Torri,Chief Executive Officer
of Toro Assicurazioni.
1,364
1,9322,162
3,169
4,088
696 743840
1,193
1,574
3,676
4,6845,520
7,393
10,867
2,838
3,965
4,738
6,386
9,733
54%
29%
17%
3%
26%
71%
1%
10%
89%
Established in 1833, ToroAssicurazioni graduallyexpanded its activities toinclude all segments of theinsurance market. In 1983,IFI acquired the companyfrom Banco Ambrosiano andlater transferred its ownershipto IFIL. In 1989, Fiat purchaseda relative majority of its sharesand gained full control in 1990.Toro Assicurazioni heads oneof Italy’s leading insurancegroups, ranking in third placein terms of revenues andamong the top performersin terms of earnings. TheCompany operates in theinternational markets as well. Itis particularly well established inFrance, where it has operated since1956 through the Continent Group.Toro Targa Assicurazioni, a venturelaunched in 1998 to distributeinsurance products through Fiatdealers, is present in Italy, Brazil andPoland. Roma Vita, a joint venturewith Banca di Roma, in which theSector acquired a significant interestin 1997, has become one of theleading bankassurance distributors.
Other Companies
SERVICES
46 Operating Sectors – Other Companies 47
Information and Communication Technology
CIAOHOLDING is a joint venture owned in equal shares by Fiat andIFIL. It operates the CiaoWeb Internet portal which has among its purposesthe creation of an online channel to promote the products and services
offered by the Fiat Group’s companies, IFIL and their sales networks. At the sametime, CiaoWeb collaborates with external partners who can help it increase the rangeand depth of its e-commerce lineup. CiaoWeb was launched on December 18, 1999. By March of this year, 115,000 subscribers were using its free Internet service, with400,000 page hits a day. CIAOHOLDING also coordinates investments in venturecapital funds that specialize in e-commerce, and provides professional Internet services(Web Hosting, Web Design, Virtual Internet Service Provider).
Fiat G.S.A. This company providesinformation technology supportservices in the development of soft-
ware specifically designed for industrial, commercial,administrative and personnel management appli-cations. It also coordinates and manages theseactivities in France, Germany, United Kingdom, Spain,Belgium, Poland, Argentina and Brazil. It has 701employees in Italy and 257 abroad.
ITS provides information technology services(hardware management and maintenance)and data transmission systems. It has 725employees in Italy. It also coordinates and
manages these activities in France, Germany, Spain,Poland and Brazil, where it has a total of 233 employees.
Telexis’ corporate mission is todevelop, produce and operate tele-
communication services that encompass the supplyof products and services for online communications, including Internet-relatedservices. It has 256 employees in Italy. It also coordinates and manages activitiesin France, Spain, Poland and Brazil, where its overall staff totals 48 employees.
Real Estate Services
Ingest-Segim All services related to the regular maintenance of theGroup’s real estate assets (office and residential buildings) are beingconcentrated in this recently established company.
IPI This company, which is listed on the Stock Exchange, has traditionallyengaged in the development and management of real estate assets, andthe provision of related consulting services, for Fiat Group companies
and external customers. It has 113 employees.
Administrative and Financial Services
Fiat Gesco All the administrative activities of the Group Sectors (accounting, financial reporting,
taxation and management reporting) have been concentrated in this company, which employs
1,931 people in Italy. It also coordinates and manages these activities in France, Germany, United Kingdom,
Spain, Belgium, Poland, Argentina, Brazil and the United States, where it has a total of 1,277 employees.
Fiat Ge.Va. This company provides centralized cash management services to Fiat Group
companies and acts as a financial management consultant. It is present in all the major
countries where the Group operates either directly or through its international cash management units.
Fiat Ge.Va. S.p.A. has 204 employees.
In 1999, Fiat Ge.Va. responded to the substantial financial commitments undertaken by the Group by
mobilizing significant resources in the Eurobond market and through real estate and financial securitization
transactions in Italy and abroad.
Personnel Administration and Training Services
Fiat Se.p.In This company specializes in personnel management, administration and selection,as well as in the development of human resources and the provision of health benefits andthe management of business centers. It has 1,110 employees.
Isvor Fiat provides personnel training and educational services to Group companies andexternal customers. It also supplies standard and customized products, and designs personneltraining courses for the Group’s sales networks and its principal suppliers. It has 232 employeesin Italy. It also coordinates and manages activities in Argentina, Brazil and India and operates
professional centers in France, Germany, Spain, Great Britain and Poland.In providing its services, Isvor Fiat relies on the contribution of a staff of 160 instructors and more than900 consultants from 15 countries.
Consistently with the strategylaunched by the Group in previousfiscal years to reduce thecomplexity of all its businesses,the services that support theindustrial activities, whichpreviously operated at the Sectorand country level, have beenconcentrated at dedicatedorganizational units. Thesecenters of professional excellenceprovide the Group with betterquality services at lower cost.
48
Automobiles Commercial Vehicles Agricultural andConstruction Equipment
A U T O M O T I V E C O M P A N I E S
Iveco N.V.Netherlands
Astra Veicoli Industriali S.p.A.Italy
Iveco Aifo S.p.A.Italy
Iveco S.p.A.Italy
Sicca S.p.A.Italy
Camiva S.A.France
International Trucks Australia Ltd.Australia
Iveco Argentina S.A.Argentina
Iveco Austria GmbHAustria
Iveco Belgium S.A. N.V.Belgium
Iveco Danmark A/SDenmark
Iveco Ford Truck LtdGreat Britain
Iveco France S.A.France
Iveco Magirus AGGermany
Iveco Mercosul LtdaBrazil
Iveco Pegaso, S.A.Spain
Iveco Portugal Ltda.Portugal
Naveco Ltd (*)China
Fiat Auto S.p.A.Italy
FMA - Fabbrica MotoriAutomobilistici S.p.A.Italy
SATA - Società AutomobilisticaTecnologie Avanzate S.p.A.Italy
Fiat Auto Argentina S.A.Argentina
Fiat Auto Belgio S.A.Belgium
Fiat Auto España, S.A.Spain
Fiat Auto (France) S.A.France
Fiat Auto Hellas S.A.Greece
Fiat Auto (Ireland) Ltd.Ireland
Fiat Auto Japan K.K.Japan
Fiat Auto Maroc S.A.Morocco
Fiat Auto Nederland B.V.Netherlands
Fiat Auto Poland S.A.Poland
Fiat Auto Portuguesa, S.A.Portugal
Fiat Auto South Africa Pty. LtdRepublic of South Africa
Fiat Auto (Suisse) S.A.Switzerland
Fiat Auto (U.K.) LtdGreat Britain
Fiat Automobil AGGermany
Fiat Automobil GmbHAustria
Fiat Automobiler Danmark A/SDenmark
Fiat Automóveis S.A. - FiasaBrazil
Fiat CR Spol S.R.O.Czech Republic
Fiat India Automobiles LimitedIndia
Fiat Magyarorszag KFT.Hungary
Sevel S.p.A. (*)Italy
Sevel Nord S.A. (*)France
Tofas A.S. (*)Turkey
Ferrari S.p.A.Italy
Maserati S.p.A.Italy
Fiat Sava S.p.A.Italy
Fidis S.p.A.Italy
Sava-Leasing S.p.A.Italy
Savarent S.p.A.Italy
Targa Services S.r.l. a S.U.Italy
Banco Fiat S.A.Brazil
Fiat Auto Contracts LtdGreat Britain
Fiat Auto Financial Services LtdGreat Britain
Fiat Bank GmbH Germany
Fiat Bank Polska S.A. Poland
Fiat Credit France S.A.France
Fiat Credito CompaniaFinanciera S.A.Argentina
Fiat Credito Portugal S.A.Portugal
Fiat Distribuidora Portugal LtdaPortugal
Fiat Finance Netherlands B.V.Netherlands
Fiat Financiera, S.A.Spain
Sofice - Société de Financementdes Concessionnaires S.A.France
Transolver Finance S.p.AItaly
Transolver Service S.p.A.Italy
Fraikin Société AnonymeFrance
Transolver Finance S.A.France
Transolver Financial Services LtdGreat Britain
Transolver Operational Services LtdGreat Britain
Transolver Services S.A.France
Case Canada Investments Ltd.Canada
Case Credit Australia Pty LtdAustralia
Case Credit CorporationUnited States
Case Credit Ltd.Canada
Case Receivables II Inc.United States
Case Wholesale Receivables Inc.United States
CNH Capital CorporationUnited States
CNH Global N.V.Netherlands
Fiat Hitachi Excavators S.p.A.Italy
New Holland Italia S.p.A.Italy
Case Brasil & Cia.Brazil
Case Canada CorporationCanada
Case CorporationUnited States
Case Corporation Pty LtdAustralia
Case France S.A.France
Case Germany GmbHGermany
Case Harvesting SystemsGmbHGermany
Case United Kingdom LimitedGreat Britain
FiatAllis Latino Americana Ltda Brazil
New Holland Australia Pty Ltd.Australia
New Holland Belgium N.V.Belgium
New Holland Canada LtdCanada
New Holland DeutschlandGmbHGermany
New Holland France S.A.France
P R I N C I P A L C O M P A N I E SFIAT GROUP
Metallurgical Products Components Production Systems
O T H E R I N D U S T R I A L C O M P A N I E S
Teksid S.p.A.Italy
Teksid For S.p.A.Italy
Fonderies Aluminium Cleon S.A.France
Fonderies du Poitou S.A.France
Meridian Technologies Inc.Canada
Société Bretonne de Fonderieet Mecanique S.A.France
Teksid Aluminio de Mexico S.A. de C.V. Mexico
Teksid Aluminum Foundry, Inc. United States
Teksid do Brasil Ltda.Brazil
Teksid, Inc. United States
Teksid Poland S.A. Poland
Teksid Hierro de Mexico S.A. (*)Mexico
Comau S.p.A.Italy
Geico S.p.A. Italy
Italtech S.p.A. Italy
U.T.S. S.p.A. Italy
Aims Holdings (Pty) Ltd.Republic of South Africa
Autodie International, Inc.United States
Comau Argentina S.A.Argentina
Comau Deutschland GmbHGermany
Comau do Brasil Ind. e Com. LtdaBrazil
Comau Estil UK UnlimitedGreat Britain
Comau France S.A.France
Comau India Pvt. Ltd.India
Comau Poland Sp. zo.o.Poland
Comau Sciaky S.A.France
Mecaner S.A. Spain
Pico Holdings CorporationUnited States
Pico Mexico, Inc. United States
Progressive Tools & Industries Co.United States
Renault Automation Comau S.A.France
New Holland Latino Americana LtdaBrazil
New Holland North America Inc.United States
New Holland U.K. LimitedGreat Britain
O&K Orenstein & Koppel AGGermany
Al-Ghazi Tractors Limited (*)Pakistan
Flexi-Coil Ltd (*)Canada
New Holland de Mexico S.A.de C.V. (*)Mexico
Türk Traktör Ve ZiraatMakineleri A.S. (*)Turkey
New Holland Credit CompanyLLCUnited States
New Holland Receivables Co.United States
New Holland Trade N.V.Netherlands
Comau Service S.r.l.Italy
Comau Service do Brasil Ltda.Brazil
Magneti Marelli S.p.A.Italy
Magneti Marelli Climatizzazione S.p.A.Italy
Sistemi Sospensioni S.p.A.Italy
Magneti Marelli Argentina S.A.Argentina
Magneti Marelli Cofap S.A.Brazil
Magneti Marelli Components B.V.Netherlands
Magneti Marelli Deutschland GmbHGermany
Magneti Marelli do Brasil Industria e Comercio Ltda.Brazil
Magneti Marelli France S.A.France
Magneti Marelli Iberica S.A.Spain
Magneti Marelli Mexico S.A.Mexico
Magneti Marelli Poland S.A.Poland
Magneti Marelli U.K. LtdGreat Britain
Magneti Marelli U.S.A. Inc.United States
Automotive Litghting HoldingGmbH (*)Austria
Midas Europe S.A. M.Princ. of Monaco
Viasat S.p.A. (*)Italy
Rolling Stockand Railway Systems
Insurance Publishing and Communications Miscellaneous andHolding Companies
S E R V I C E C O M P A N I E S
Fiat Ferroviaria S.p.A.Italy
Elettromeccanica Parizzi S.p.A.Italy
Fiat Rail LtdGreat Britain
Fiat-Sig Schienenfahrzeuge AGSwitzerland
Aviation
FiatAvio S.p.A.Italy
Sepa S.p.A.Italy
FiatAvio Inc.United States
Regulus S.A.French Guyana
Serene S.p.A. (*)Italy
Sogetel S.p.A. (*)Italy
Vegaspazio S.p.A. (*)Italy
Eurojet Turbo GmbH (*)Germany
Europropulsion S.A. (*)France
Turbo-Union Ltd (*)Great Britain
Toro Assicurazioni S.p.A.Italy
D.A.S. - Difesa AutomobilisticaSinistri S.p.A.Italy
Giano Assicurazioni S.p.A.Italy
Iniziative Sviluppo Immobiliare -Isim S.p.A.Italy
Nuova Tirrena S.p.A.Italy
Roma Vita S.p.A.Italy
Toro Targa Assicurazioni S.p.A.Italy
Companhia de SegurosMaritimos e Terrestres PhenixBrazil
Continent Assistance S.A.France
Guardian France S.A.France
Guardian Risques S.A.France
Guardian Vie S.A.France
Le Continent I.A.R.D. S.A.France
Le Continent Vie S.A.France
L’Union Générale du Nord S.A.France
Augusta Assicurazioni S.p.A.Italy
Prime Augusta Vita S.p.A.Italy (*)
Itedi - Italiana Edizioni S.p.A.Italy
B. & B. Immobiliare S.p.A.Italy
Editrice La Stampa S.p.A.Italy
Publikompass S.p.A.Italy
Other Service Companies
Centro Ricerche FiatSocietà Consortile per AzioniItaly
Elasis - Sistema RicercaFIAT nel Mezzogiorno -Società Consortile per AzioniItaly
Fenice S.p.A.Italy
Fiat Ges.co. S.c.p.A.Italy
Fiat GE.VA. S.p.A.Italy
Fiat G.S.A. S.r.l.Italy
Isvor Fiat S.p.A.Italy
ITS S.r.l.Italy
Telexis S.r.l.Italy
Fiat Engineering S.p.A.Italy
IPI S.p.A.Italy
Sicind S.p.A.Italy
Fiat Argentina S.A.Argentina
Fiat Deutschland GmbHGermany
Fiat do Brasil S.A.Brazil
Fiat France S.A.France
Fiat Iberica, S.A.Spain
Fiat United Kingdom LtdGreat Britain
Fiat U.S.A., Inc.United States
I.H.F. - Internazionale HoldingFiat S.A.Switzerland
New Holland Holdings N.V.Netherlands
(*) Affiliated Company
Engine Overhaul activities carried outby FiatAvio S.p.A.
The Fiat Group in 1999Operating Sectors
Published by:Fiat Information & Communication Services
Editorial Coordination:Micrograf – Turin, Italy
Design by:Fantinel & Associati – Turin, Italy
On the cover:Oil on canvas, 100x25 cmby Roberto Bergonzo – Turin, Italy
Printed by: Puntografico – Brescia, Italy
Printed in Italy
June 200001UK