EMEA Region - FCA US LLC

EMEA Region
Alfredo Altavilla
Our plan leverages the resources of a
Global Company
EMEA
Architecture
Sharing
Industrial
Infrastructure
Purchasing
Synergies
EMEA Region
Powertrains
Technology
Sharing
‘10-’14: an unforeseeable journey through the
perfect storm, but the ship contained the damage
Slump in European market demand,
with Italy affected at the most
Product launches
2.15
34
EU28+EFTA
@Inv. Day Apr. '10
@Inv. Day May '14
PASSENGER CAR AND LCV
18.3
16.9
16.0
15.4
15.4
16.5
17.4
15,3
13,9
2007
2008
2009
2010
2011
14,2
14,0
13,8
2012
2013 2014E
Announced @ Inv. Product launches
Day Apr. '10
'10-'14
Manufacturing capacity
Utilization @ 2014 (Harbour)
forecast @ Inv.
Day Apr. '10
forecast @ Inv.
Day May '14
Network Development (10-14)
Points of Sales
30%
2.7
2.2
0.93
100%+
PASSENGER CAR AND LCV
2.3
22
18.2
ITALY
2.4
Sales forecast @2014
(Million units)
2.2
2.4
2.5
67%
2.6
(2%)
2.0
1.9
1.5
2007
2008
EMEA Region
2009
2010
2011
2012
1.4
1.4
2013 2014E
forecast @ Inv.
Day Apr. '10
IQ '14
forecast @ Inv.
Day Apr. '10
POS evolution
In Europe difficult trading conditions
continued throughout 2013…
EMEA
Decreasing demand: FY industry down 1.6%
(EU28+EFTA, Passenger cars & LCV)
Highly competitive environment:
enduring price pressure
MARKET VOLUMES DECREASED FOR THE 6TH YEAR IN A ROW
LIST PRICE FOLLOWING SAME PATTERN OF CONSUMER PRICE
INDEX IN GERMANY, WHILE TRANSACTION PRICE LAGGING
BEHIND BOTH IN ITALY AND GERMANY
2007-13 MARKET TREND, MILLION UNITS
18.3
16.9
2007
2008
16.0
2009
15.4
2010
15.3
2011
2007-13 PRICE TREND (A-, B-, C- & D-Segment)
14.0
2012
13.8
2013
2007 Index
= 100
102
2013 H2 REPRESENTED THE END OF THE DECLINE: STRONG
RECOVERY SIGNALS IN UK AND SPAIN, ITALY LIMITING THE
DETERIORATION BUT STILL SUFFERING THE MOST
104
104
104
102
98
2007
2008
2009
106
105
100
2010
113
115
107
108
101
102
102
2011
2012
2013
109
106
2013 YOY MARKET TREND
25%
HY1
H1
HY2
H2
15%
107
5%
2007 Index
= 100
-5%
103
101
100
-15%
EU28+EFTA
EMEA Region
UK
Spain
Germany
France
Italy
103
104
102
101
100
98
94
105
109
111
107
108
102
102
…but FCA in EMEA significantly reduced losses
while re-focusing and realigning FIAT Brand
TRADING PERFORMANCE (€M)
Q1
Q2
(91)
(205) (150) (134)
Q3
Q4
FY
(230) (160) (120) (51)
(452)
(689)
2012
2013
Sustained improvement driven by:
 More favorable mix driven by product Improvement
portfolio repositioning strategy
 Enhancement of industrial cost efficiencies with 4
plants reaching Gold WCM level
 Optimization of advertising spending by rechanneling resources to 5oo Family
 Continued tight grip on G&A costs
 Decision not to engage further in value destructive
price competition improving channels’ mix
EMEA Region
EMEA
Structural shift of
FIAT Brand towards upper
layer of core segments
 Expanded 5oo Family
with 5ooL, Trekking &
Living variants, adding
to iconic hatchback model (1+M units sold in
Europe since launch in 2007)
 5oo Family now representing
33% of brand sales (20% in
2012)
 Segment leadership in FY 2013 for 5oo (A-Segment,
first-time since launch) and 500L (Small-MPV) in
EU27+EFTA
 3 out of 4 Fiat 5oo sold
outside Italy
Pillars of the plan
EMEA Region
EMEA
Industry trend and forecast
EMEA
Passengers cars & LCV, Million units
21.1
21.2
2013
2014 E
1.4
1.4
2013
2014 E
EMEA
EU28+EFTA
CAGR 3.4%
CAGR 3.2%
22.0
2015 E
22.9
24.0
25.0
13.8
2016 E
2017 E
2018 E
2013
14.2
14.7
2014 E
2015 E
15.2
2016 E
16.1
2017 E
2018 E
Italy
Other EMEA countries*
CAGR 7.1%
CAGR 3.9%
1.6
2015 E
1.8
2016 E
1.9
2017 E
2.0
2018 E
7.3
7.0
7.3
2013
2014 E
2015 E
7.7
2016 E
Source: IHS, April 2014. Iran not included - * Including: Russia, Eastern Europe, Turkey , Middle East and Africa
EMEA Region
15.7
8.3
2017 E
8.9
2018 E
Industry outlook by segment
EMEA
2013-18, Passengers cars & LCV (EMEA)
5.377
2013 (k units)
2018 (k units)
Segments showing the higher % growth
4.468
4.485
4.119
2.523
2.478
2.129
1.337
2.018
1.497
1.147
462
1.205
1.495
1.656
2.122
1.673
1.367
799
514
193 250
Mini Cars Small cars Compact
Mid & MPV Small
MPV
Small SUV Compact
Mid & Specialties Pick Up
Cars
Large Cars
Compact &
SUV
Large SUV
Large
CAGR
‘13-’18
2.3%
3.8%
1.7%
Source: IHS, April 2014. Iran not included
EMEA Region
3.1%
2.1%
1.0%
13.3%
4.0%
4.1%
5.3%
821
516 561
1.7%
951
VAN
LCV
Others
3.5%
3.0%
Industry trend in terms of Customer:
increasing bi-polarity
EMEA
Passengers cars (EU 28+EFTA)
18%
70%
12%
2004
Source: 2004, 2013 actuals. For 2018: IHS, April 2014
EMEA Region
25%
30%
Premium Customer
56%
42%
Traditional Mainstream
Customer
28%
Budget Conscious Customer
19%
2013
2018
A new Brand strategy ready to be rolled-out
EMEA
Guidelines for a new product portfolio…
• Shift a significant portion toward higher margin opportunities exploiting the
potential of our Brands’ Equity (Alfa Romeo, Jeep, FIAT 5oo Family) …
• … focusing, at the same time, on a more accessible offer to meet market increased
bi-polarity, maintaining attractiveness on budget conscious consumers
…through Brands positioning
• Alfa Romeo re-entering and Jeep increasing its presence in the Premium battlefield
• FIAT brand re-shaping to meet both higher margin objective and budget driven
demand
• FIAT Professional consolidating as a Profit Pillar
EMEA Region
FCA Portfolio strategy by segment
EMEA
2013-18, segment mix evolution, Passengers cars and LCV (EMEA)
Market
2013
46%
FCA
27%
24%
19%
9%
22%
2018
27%
10%
2%
2%
7%
5%
0%
4% 1%
8%
1%
6% 6%
10%
1% 1%
2% 1%
18% 19%
17%
10%
4%
Mini and Small Compact Cars Mid & Large
cars
Cars
2%
6%
MPV Small
5%
0%
MPV Compact
& Large
6% 8%
8% 8%
7% 9%
Small UV
Compact UV
Mid & Large
UV
10%
1% 2%
2% 2%
Specialties
Pick Up
• Sustain leadership in core segments: Mini car, LCV and Small MPV.
• Regain key position in the Compact Cars segment
• Conquest a primary role through products line expansion in
• SUV segments: reinforce presence leveraging Jeep Brand traditional strength
• CUV and Mid-large cars: enter these segments with a brand new Alfa Romeo line-up, fully
respecting its DNA
• Pick up, with the launch of a new Global product
Source: IHS, April 2014. Iran not included
EMEA Region
LCV
Sales by Brand
EMEA
Passengers cars and LCV (EMEA), Million units
1.5
270
1.1
1.1
250
240
110
70
50
100
70
80
620
610
2013
2014 E
Note: numbers may not add due to rounding – Including JV
EMEA Region
80
150
270
730
2018 E
Sales by sub-region
EMEA
Passengers cars and LCV (EMEA), Million units
1,5
1,1
1,1
0,2
0,2
0,4
Other EMEA countries
0,5
0,4
0,4
0,5
0,5
Italy
0,6
Eu28+EFTA excl.Italy
2013
Note: numbers may not add due to rounding – Including JV
EMEA Region
2014 E
2018 E
EMEA Network strategy
EMEA
Deliver premium-quality customer
experience across all brands
Resize dealer network to improve network
sustainability still maintaining / expanding
market coverage
Focus and upgrade Alfa / Jeep franchise
combination
Reorganize network coherently with Lancia
becoming an Italy-driven brand
EMEA Region
EMEA Dealer network evolution
• Fiat and Alfa decreasing their number of POS by 15% to
increase network sustainability
• Jeep to increase the network size by  25%, to sustain
volumes ambition
• Throughput / POS increased by around 60% on average
• Market coverage increased at  90% min for the main
Brands
EMEA Region
EMEA
EMEA Manufacturing strategy and job done so far
EMEA target is to Utilize its production base to fuel WW volume Growth
• Supporting our global premium brands expansion (Maserati, Jeep, Alfa Romeo)
and Fiat 5oo Family
• Focusing existing production capacity in Italy on higher value-added production
• Supporting a significant increase in export volumes
Relevant plant actions have already been Kicked-off in Italy
• Production of Maserati Quattroporte and Ghibli in AGAP plant with overall investment of around €1B
• Melfi investment program of €1+B, including modification to existing production processes to
accommodate new modular architecture and produce Fiat 5ooX and Jeep Renegade
• Plans for future activities at Sevel plant (~€700M over 5 years)
• Refurbishment of Mirafiori plant for production of new models, including
a Maserati luxury SUV
EMEA Region
All EMEA plants are involved in the
investment plan
Vehicle Plants
9
Powertrain Plants
6
EMEA
Tychy (3)
Partnerships
(1) PSA GROUP
(2) KOÇ GROUP
(3) FORD GROUP
(4) REPUBLIC OF SERBIA
Bielsko Biala (2)
Verrone
Kragujevac (4)
Mirafiori
Cento (VM Motori)
AGAP (Grugliasco)
Atessa (Sevel)
Termoli
(1)
Melfi (Sata)
Cassino
G. Vico (Pomigliano)
EMEA Region
Pratola Serra
Bursa (Tofas) (2)
Plan’s impact on capacity utilization
EMEA
EMEA (capacity utilization)
Italy (capacity utilization)
100%+
100%+
66%
53%
Harbour
2013
EMEA
centered
products
Global
Products
Harbour
2018
Harbour
2013
EMEA
centered
products
Global
Products
Harbour
2018
The plan will allow EMEA region to reach 40% of export on total production in 2018
Harbour definition: 235 days p.a. / 16 hours per day
EMEA Region
A challenging starting point …
EMEA
 European market slowly coming back, but currently mainly
relying on Fleet and with an intense price competition
 Group perceived as mainly dependent on small models in the
mass-market, that need to move up-market
 Dealer Network to be strengthened to deal with a Premium
offering
 Manufacturing capacity available to deal with Premium and
export volumes
EMEA Region
…with a clear action plan
EMEA Industry expected to grow, reaching
25.0M in 2018, with Europe still below precrisis level
FCA Portfolio evolution sales targeting 1.5M
units in 2018, driven by 34 new models,
increasing market coverage by 10% and
better leveraging industry growth
FCA Dealer network evolving to improve
network sustainability and deliver premiumquality customer experience across all brands
FCA Capacity utilization exceeding 100%
both at Italian and EMEA level
EMEA Region
EMEA
A comprehensive approach to improve margins
Re-shaping Brands and increasing their equity
• Shift toward higher margin opportunities
• Focus Brands on their core segments to avoid overlaps
Launching a portfolio of market-fitting products
• Allowing a better control on channel-mix
• Positioned to compete in terms of features, avoiding
“price-wars”
• Able to meet increasing demand for fuel efficiency
Managing the cost structure
• Devoting capacity to export, to improve fixed costs absorption
• Continued tight grip on G&A costs
EMEA Region
A first step forward...
EMEA Region
EMEA
Disclaimer
Certain information included in this presentation, including,
without limitation, any forecasts included herein, is forward
looking and is subject to important risks and uncertainties that
could cause actual results to differ materially. The Group’s
businesses include its automotive, automotive-related and other
sectors, and its outlook is predominantly based on what it
considers to be the key economic factors affecting these
businesses. Forward-looking statements with regard to the
Group's businesses involve a number of important factors that
are subject to change, including, but not limited to: the many
interrelated factors that affect consumer confidence and
worldwide demand for automotive and automotive-related
products and changes in consumer preferences that could
reduce relative demand for the Group’s products; governmental
programs; general economic conditions in each of the Group's
markets; legislation, particularly that relating to automotiverelated issues, the environment, trade and commerce and
infrastructure development; actions of competitors in the
various industries in which the Group competes; production
difficulties, including capacity and supply constraints, excess
inventory levels, and the impact of vehicle defects and/or
product recalls; labor relations; interest rates and currency
exchange rates; our ability to realize benefits and synergies from
our global alliance among the Group’s members; substantial
debt and limits on liquidity that may limit our ability to execute
EMEA Region
the Group’s combined business plans; political and civil unrest;
earthquakes or other natural disasters and other risks and
uncertainties. Any of the assumptions underlying this
presentation or any of the circumstances or data mentioned in
this presentation may change. Any forward-looking statements
contained in this presentation speak only as of the date of this
presentation. We expressly disclaim a duty to provide updates to
any forward-looking statements. Fiat does not assume and
expressly disclaims any liability in connection with any
inaccuracies in any of these forward-looking statements or in
connection with any use by any third party of such forwardlooking statements. This presentation does not represent
investment advice or a recommendation for the purchase or
sale of financial products and/or of any kind of financial services.
Finally, this presentation does not represent an investment
solicitation in Italy, pursuant to Section 1, letter (t) of Legislative
Decree no. 58 of February 24, 1998, as amended, nor does it
represent a similar solicitation as contemplated by the laws in
any other country or state.
Copyright and other intellectual property rights in the
information contained in this presentation belong to Fiat S.p.A.
Fiat and FCA are trademarks owned by Fiat S.p.A. “Fiat Chrysler
Automobiles” (FCA) is the name expected to be used following
completion of the merger of Fiat S.p.A. into a recently formed
Dutch subsidiary.