Chrysler Update Citi 2012 North American Credit Conference Richard - - PowerPoint PPT Presentation

Chrysler Update

Citi 2012 North American Credit Conference Richard Palmer

November 15, 2012

1

Forward-Looking Statement

This document contains forward- looking statements that reflect management's current views with respect to future events. The words “anticipate,” “assume,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties, including, but not limited to: the effective implementation

• f

the Chrysler Group LLC 2010 – 2014 Business Plan

• utlined
• n

November 4, 2009, including successful vehicle launches; industry SAAR levels; continued economic weakness, especially in North America, including continued high unemployment levels and limited availability

• f

affordably priced financing for our dealers and consumers; introduction

• f

competing products and competitive pressures which may limit our ability to reduce sales incentives; supply disruptions resulting from natural disasters and other events impacting

• ur supply chain; and our ability to

realize benefits from our industrial alliance with Fiat, particularly in light

• f

the economic crisis currently affecting several European countries. If any of these or other risks and uncertainties

• ccur,
• r

if the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed

• r

implied by such statements. We do not intend or assume any obligation to update any forward-looking statement, which speaks only as of the date on which it is made. Further details

• f

potential risks that may affect Chrysler Group are described in Chrysler Group’s Annual Report on Form 10-K, and its subsequent periodic reports filed with the U.S. Securities and Exchange Commission.

2

Agenda

Product Update Fiat Group Alliance Fiat Group Business Plan Update - EMEA Chrysler Group Financial Results

3

Q3 YTD 2012 Financial Highlights

Chrysler Group

Net Income ($Mils) Net Industrial Debt($Bils) 2.9 0.7 Cash ($Bils) 11.9 9.6 Net Revenue ($Bils) Modified Operating Profit ($Mils) Modified EBITDA ($Mils)

• Growth primarily driven by

increased volumes and positive pricing, partially offset by unfavorable mix

• Worldwide shipments up 22% to

1,796k units (1,809k shipments adjusted for GDP units)

• Modified Operating Profit

increased 50% versus prior year

• Improved performance primarily

attributable to increased shipments and positive pricing, partially offset by unfavorable mix, increased ER&D and advertising costs and content enhancement costs on new vehicles 39.9 48.6 1.5 2.2 3.6 4.1

• Net income increased $1,332

versus the prior year loss of $42

• YTD 2012 net income increased

153% versus the prior year’s Adjusted Net Income of $509 (which excludes a loss on extinguishment of debt of $551 in Q2 2011)

Q3 YTD ‘11 Q3 YTD ‘12 Q3 YTD ‘11 Q3 YTD ‘12 Q3 YTD ‘11 Q3 YTD ‘12 Q3 YTD ‘11 Q3 YTD ‘12 Dec 31, ‘11 Sept 30, ‘12 Dec 31, ‘11 Sept 30, ‘12

• An increase of 15% versus prior

year primarily driven by higher volumes and positive pricing

• Margin reduced due to

unfavorable mix, increased ER&D and advertising costs and content enhancement costs on new vehicles

+22% 4.5% of Revenue

• Net Industrial Debt decreased to

$0.7 primarily due to positive free cash flow for the first nine months

• f 2012

3.7% of Revenue 8.5% of Revenue 9.0% of Revenue

Sept 30, ‘11 Sept 30, ‘11

9.5 2.9

• Free Cash Flow of $2.5 in first nine

months of 2012

• Total liquidity was $13.2, including

$1.3 available under a revolving credit facility 1,290

509 (42)

(U.S. GAAP)

4

Key Financial Metric Trends – Steady Improvement

Chrysler Group

• 1. Excludes loss on extinguishment of debt of $551 million in Q2 2011

(197) (172) (84) (199) 116 181 212 225 473 436 381 143

(1.5%)

183

(1.7%)

239

(2.2%)

198

(1.8%)

477

(3.6%)

507

(3.7%)

483

(3.7%)

508

(3.4%)

740

(4.5%)

755

(4.5%)

706

(4.6%)

9.7 10.5 11.0 10.8 13.1 13.7 13.1 15.1 16.4 16.8 15.5 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3'12

Net Revenue

($Bils)

Modified Op Profit (% of Net Revenue)

($Mils)

Adjusted Net Income (Loss) 1

($Mils)

Worldwide Shipments (000’s) 380 433 407 382 485 514 469 543 607 630 559 (U.S. GAAP)

5

Cash and Gross / Net Industrial Debt Trends

Chrysler Group

7,367 7,841 8,260 7,347 9,877 10,175 9,454 9,601 11,256 12,075 11,947 Q1 2010 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012 3,825 3,385 3,766 5,773 3,377 2,112 11,192 11,226 12,026 13,120 13,254 12,287

Addition of Mexico Development Banks Loan Addition of Canada Health Care Notes Refinancing of Gov’t debt plus equity proceeds from Fiat

GROSS INDUSTRIAL DEBT CASH NET INDUSTRIAL DEBT 2,868 12,322

Note – Financial results based on U.S. GAAP – see Non-U.S. GAAP Financial Information and Other Items

2,932 12,533 1,336 12,592 432 12,507 693 12,640 (U.S. GAAP; $ Mils)

6

2012 Chrysler Group Cash Walk

December 31, 2011 to September 30, 2012

Note: Numbersmay not add due to rounding Dec 31, 2011 Modified EBITDA Working Capital & Other Capital Expenditures Pension / OPEB Taxes & Interest Net Principal Payments & FX Sept 30, 2012

Change in Cash $2.3 (0.4) 2.8

11.9

(1.0)

9.6

4.1 (3.1)

• Free Cash Flow driven

by strong operating performance and working capital effects, partially offset by capital expenditures and VEBA interest payment

Free Cash Flow $2.5 (0.2)

(U.S. GAAP; $ Bils)

7

Chrysler Group Financial Liabilities Maturity Schedule

Treasury functions separate from Fiat

• Chrysler Group and Fiat continue to

separately manage their own financial matters, including treasury services

• No guarantee, support or similar obligations in

relation to other’s financing obligations; no

• bligation or commitment to provide funding to

the other

• Financial segregation also supported by legally

binding obligations

• Chrysler’s May 2011 credit agreement limits

financial support to Fiat (inter alia cumulative limit on dividend payments of $500mn payable only if specified minimum liquidity is met)

• Fiat’s 3-year RCF also limits financial support

to Chrysler (including limits on guarantees and loans)

• Chrysler’s financing agreements and its LLC

Operating Agreement contain additional restrictions limiting related-party transactions, including approval process for material commercial or financial transactions between the companies

• These restrictions apply, while these

instruments are in place, regardless of the percentage of Fiat’s ownership in Chrysler

Note: Excluding accrued and accreted interest

2012 2013 2014 2015 2016 2017+ Sept 30, ‘12 (Carrying Value)

12.6 0.4 0.5 0.5 10.7 0.4 0.1 Annual Maturities

Gross Industrial Debt 0.1 0.4 0.5 0.5 0.5 11.4 Face Value 13.4

(U.S. GAAP; $ Bils)

8

8.5 8.0 8.1 9.1 9.4 9.6 8.8 9.2 10.6 11.4 10.8 11.2 11.2 11.3 8.6 11.3 11.6 13.7 12.9 12.8 12.6 14.7 14.9 14.5 12.9 15.0 14.5 14.3

Chrysler Group Sales Performance (U.S. /Canada)

YTD Q3 2012

QUARTERLY MARKET SHARE (%)

2009

FY share 11.0% 8.8%

Q2 Q3 Q4 Q3 Q1 Q2 Q4 Q2 Q1 Q3 Q4

2010

FY share 13.0% 9.2%

2011

FY share 14.3% 10.5%

Q1 Q2

2012

YTD share 14.6% 11.2%

Q3 Vehicles (000s)

SALES GROWTH

(U.S. & CANADA) 1,192

+48

(+75%) Fiat 500 Jeep Grand Cherokee Chrysler 200 Ram Pickup

Q3’ 11 Q3’ 12

+33

(+131%)

+27

(+29%)

+22

(+119)

+40

(+18%)

+36

(+18%)

47

Chrysler T&C / Dodge Caravan

1,445 +24% +6%

CG SALES

Other

+253

(+21%)

Chrysler 300

INDUSTRY SALES +15% +7%

9 14.0% 11.6% 19.9% 35.8% 18.7% 16.8% 13.4% 20.8% 31.9% 17.1%

Chrysler Group U.S. Sales by Vehicle Segment

More competitive entries in the car segments

SUV

Chrysler Group’s car mix increased from 26% to 30% due to the continuing process of introducing more competitive car offerings

Pickups & Vans Small & Mid-Size Cars

YTD Q3 2011

(Total U.S. Sales = 1,009,000)

Large & Specialty Cars Minivan & Crossovers SUV Pickups & Vans Small & Mid-Size Cars Large & Specialty Cars Minivan & Crossovers Total Car = 25.6% Total Car = 30.2%

YTD Q3 2012

(Total U.S. Sales = 1,251,000)

10

Chrysler Group 2012 Product Introductions

NAFTA

Q1 Q2 Q3 Q4

2012 Fiat 500 Abarth 2012 Fiat 500 Abarth 2013 Dodge Dart 2013 Dodge Dart 2013 Ram 1500 2013 Ram 1500 2013 Viper SRT10 & GTS 2013 Viper SRT10 & GTS

• Aggressive, functional

styling

• Lightweight, track-tuned

handling and purpose-built design

• 0-60 mph in 7.5 seconds
• 160 Hp 1.4L MultiAir Turbo

engine

• 3 mode electronic stability

control with full-off capability for the track

• First C-segment sedan since

2005

• Executing a staged launch

integrating various powertrain combinations

• All-new Aero model (41

highway mpg) started productionin September, arriving in dealerships shortly

• Production ramp-up and sales

rates on track with plan

• 28k units produced in Q3
• Q3 sales exceeded 10k
• October dealer orders

exceeded productionby 8,000 vehicles

• Class exclusive infotainment

and connectivity technologies – attracting younger demographics

• “Top Safety Pick” by IIHS and

“5-Star Safety Rating” from NHTSA

• Best-in-class:
• Fuel economy – 17 city /

20 comb / 25 hwy mpg with Pentastar 3.6L V6 4x2 and segment- exclusive TorqueFlite 8- speed transmission

• Aerodynamics
• Outstandingpremium

engine fuel economy with the 5.7L V8 Hemi coupled with the all-new TorqueFlite 8-speed transmission

• Segment-leading technology

and improved telematics

• Upgraded exterior and

interior

• Two all-new models:
• SRT Viper and SRT Viper GTS
• 8.4L V-10 engine
• 640 hp and 600 lb.-ft. torque
• Carbon-fiber and aluminum skin

– lower drag coefficient

11

Chrysler Group 2013 Key Product Introductions

NAFTA

Jeep D-SUV Jeep D-SUV Ram Large Commercial Van Ram Large Commercial Van Fiat Fiat Ram 2500-3500 Pickup Major Refresh Ram 2500-3500 Pickup Major Refresh Jeep Grand Cherokee Major Refresh Jeep Grand Cherokee Major Refresh

12

New Powertrains Leading to Improved Performance and Fuel Economy

• First NAFTA OEM implementation of 8-speed transmission

technology (to be followed by 9-speed transmission in 2013)

• Provides 8-12% increase in EPA Combined Fuel Economy for

Chrysler’s RWD V6, V8 and small Turbo Diesel applications (vs. 5-speed transmission); and reduces CO2 emissions

• Delivers improved performance and shift quality over

conventional 5- and 6-speed transmissions

• Will be available across Chrysler Group’s RWD product

portfolio; first application with the 3.6L V-6 Pentastar Dodge Charger and Chrysler 300 vehicles; also in Ram 1500 pickup

8-Speed RWD Transmission

Fuel Economy Improvement for Chrysler 300 and Dodge Charger + 10-12%

2011 MY 2012 MY

• Extensive manufacturing base for FIRE engine: US-Michigan, Brazil, India and

Italy

• MultiAir add-on package on base engine; shot-by-shot control of air / fast

response continuously variable valve lift

• Up to 10% fuel economy improvement
• Highly fuel-efficient V6 engine family; first launched in 2011 Jeep Grand

Cherokee

• Fuel efficiency improvement up to 10%
• Flexible family architecture for downsized displacement, Direct Injection,

Turbo Charging and MultiAir

• Produced in two state-of-the-art manufacturing facilities in Trenton (US-

Michigan) and Saltillo (Mexico)

V6 Pentastar Engine Family FIRE MultiAir Engine 2.8L & 3.0L Diesel Engines

• Applied to Chrysler Grand Voyager, Jeep Wrangler, Chrysler

300, Lancia Thema and Jeep Grand Cherokee in Europe

• 24% (Grand Voyager) and 27% (Thema) improved fuel
• consumptionvs. 3.6L gas engine
• Meets Euro 5b emissions; Biodiesel capable

13

Chrysler Group World Class Manufacturing Update

Achieving consistent dimensional results drives improved vehicle fit and finish Injury reduction accelerating despite higher capacity utilization Productivity improvements leads to lower per unit costs 73% 92% >100% 49% 60% >70% 0% 20% 40% 60% 80% 100% 120% 2010A 2011A 2012E

Harbour = Two 8-hour shifts for 235 working days Technical = 3 shifts in all plants (except Saltillo) @ 285 days)

% Utilization

Assembly Capacity Utilization

CG Production 1.6M 2.0M ~2.4M

(excludes Purchased vehicles)

Harbour Technical

• Three “Bronze” level plants – Dundee Engine, Windsor Assembly

and Toledo complex

• Flexible body-in-white lines, increased jobs per hour, 3-crew and

4-day working patterns contribute to manufacturing efficiencies, including improved capacity, utilization, productivity and quality

14

Chrysler Group FY 2012 Guidance Confirmed

Revised NAFTA Industry sales forecast

Guidance Q3 YTD Actual Worldwide Vehicle Shipments 2.3 – 2.4 M 1.7 M Net Revenues ~ $65 B $49 B Modified Operating Profit ≥ $3.0 B $2.2 B Net Income ~ $1.5 B $1.3 B Free Cash Flow > $1 B $2.5 B

13.5 15.2 16.4 16.6 17.1 14.2 15.6 ~17 17.7 17.7 18.2 18.3 2010 2011 2012E 2013E 2014E 2015E 2016E

Chrysler plan @ 2009 Investor Day Actual / Revised forecast

NAFTA

(passenger cars, SUV, pick-up trucks & LCVs)

Revised Industry SAAR Estimates

15

Fiat Group Update

16

C e r t a in in f o r m a t io n in c lu d e d in t h is p r e s e n t a t io n , in c lu d in g , w it h o u t li m it a t io n , an y f o r e c as t s in c lu d e d h e r e in , is f o r w a r d lo o k in g a n d is s u b j e c t to im p o r t a n t r is k s an d u n c e r t a in t ie s t h at c o u ld c a us e a c tu a l r e s u lt s t o d if f e r m a t e r ia lly . T h e G r o u p ’ s b u s in e ss e s in c lu d e it s a u t o m o t iv e , a u t o m ot iv e - r e la t e d a n d

• t h e r

s e c t o r s , a n d it s

• u t lo o k

is p r e d o m in a n t ly b a s e d

• n

it s in t e r p r e t a t io n

• f

w h a t it c o ns id e r s t o b e t h e k e y e c o no m ic f ac t o r s aff e c t in g t h e s e b us in e s s e s . F o r w a r d - lo o k in g s t a t e m e n t s w it h r e g a r d t o t h e G r o u p ' s b u s in e s s e s in v o lv e a n u m b e r

• f

im p o r t a n t f ac t o r s t h a t a r e s u b j e c t t o c h a n g e , in c lu d in g , b u t n o t lim it e d t o : t h e m a n y in t e r r e la t e d f a c t o r s t h a t a ff e c t co n su m e r co nf id e n c e an d w o r l d w id e d e m a n d f o r au t o m o t iv e an d a u t o m o t iv e - r e la t e d p r o d u c t s an d c h a n g e s in co n s u m e r p r e f e r e n c e s t h a t c o u ld r e d u c e r e la t iv e d e m a n d f o r t h e G r o u p ’ s p r o d u c t s ; g o v e r n m e n t a l p r o g r a m s ; g e n e r a l e c o n o m ic c o n d it io n s in ea c h

• f

t h e G r o u p ' s m a r k e t s ; le g is la t io n , p a r t ic u la r ly t h a t r e la t in g t o a u t o m o t iv e - r e la t e d is s u e s , t h e e n v ir o n m e n t , t r a d e an d c o m m e r c e a n d in f r as t r u c t u r e d e v e lo p m e n t ; a c t io n s

• f

c o m p e t it o r s in t h e va r io u s in d u s t r ie s in w h ic h th e G r ou p c o m p e t e s ; p r o d u c t io n d if f ic u lt ie s , in c lu d in g c a p ac it y a n d su p p ly c o n s t r a in t s , e x c es s in v e n t o r y le v e ls , a n d t h e im p a c t

• f

v e h ic le d e f e c t s a n d / o r p r o d u c t r e c a lls ; la b o r r e la t io n s ; in t e r e s t r a t es a n d c u r r e n c y e x c h a n g e r a t e s ;

• u r

a b ilit y t o r e a li z e b e n e f it s a n d s y n e r g ie s f r o m o u r g lo b a l a ll ia n c e a m o n g th e G r o u p ’ s m e m b e r s ; s u b s t a nt ia l d e b t a n d li m it s o n liq u id it y t h a t m a y lim it

• u r

a b ilit y t o e x e c u t e t h e G r o u p ’s c o m b in e d b u s in e s s p la n s ; p o lit ic a l a n d c iv i l u n r e s t ; e a r t h q u a k e s a n d o t h e r r is k s a n d u nc e r t a in t ie s . A n y

• f

t h e as s u m p t io n s u n d e r ly in g t h is p r e s e n t a t io n

• r

a n y

• f

t h e c ir c u m s t a n c e s

• r

d a t a m e n t io n e d in t h is p r e s e n t a t io n m a y ch a n g e . A n y f o r w a r d - lo o k in g s t a t e m e n t s co n t a in e d in t h is p r e s e n t a t io n s p e a k

• n ly

as

• f

t h e d a t e

• f

t h is p r e s e n t a t io n . W e e x p r e s s ly d is c la im a d u t y t o p r o v id e u p d a t e s t o a n y f o r w a r d - lo o k in g s t a t e m e n t s . F ia t d o e s n o t as s u m e an d e x p r e s s ly d is c la im s a n y lia b i l it y in c o n n e ct io n w it h a n y in a cc u r a c ie s in a n y

• f

th e s e f o r w a r d - lo o k in g s t a t e m e n t s

• r

in co n n e c t io n w it h a n y u s e b y a n y t h ir d p a r t y

• f

su c h f o r w a r d - lo o k in g s t a t e m e n t s . T h is p r e s e n t a t io n d o e s n o t r e p r e s e n t in v e s t m e n t a d v ic e

• r

a r e c o m m e n d a t io n f o r th e p u r c ha s e

• r

s a le

• f

f in a nc ia l p r o d u c t s an d / o r

• f

a n y k in d o f f in a n c ia l s e r v ic e s . F in a lly , t h is p r e s e n t a t io n d o e s n o t r e p r e s e n t a n in v e s t m e n t s o lic it a t io n in I t a ly , p u r s u a n t t o S e c t io n 1 , le t t e r ( t )

• f

L e g is la t iv e D e c r e e n o . 5 8

• f

F e b r u a r y 2 4 , 1 9 98 , as a m e n d e d , n o r d o e s it r e p r e s e n t a s im ila r s o lic it a t io n a s c o n t e m p la t e d b y t h e la w s in a n y o t h e r c o u n t r y o r s t a t e .

Safe Harbor Statement

17

Fiat Group At-a-Glance

18

Unique brands covering the entire automobile landscape

GLOBAL VEHICLE BRANDS

• Jeep and Alfa Romeo strongly

recognized internationally

• Ferrari and Maserati as Luxury

& Performance brands

The Italian way of high-tech, sportiness, performance and racing for Fiat’s small and compact cars Italian design expressed in its most everyday, functional and simplest form A premium Italian brand with clear focus on advanced technology performance and design, set to deliver pure-spirited products, Italian design, dynamic and active driving experience engaging senses An American icon brand for SUV’s representing unique, freedom, adventure, authenticity, passion values Over 7 million vehicles on road worldwide – our most global brand with sales in 120+ countries Chrysler is a leader for design and innovation, innovator of minivans and creator of the 300 offering ultimate versatility vehicles for families and bridging exclusivity to masses Lancia represents 105 years of car making history and offering ultimate fusion of engineering and elegance of Italian cars A “quintessentially American” brand; embodies capability, style, and an ageless enthusiasm for fun and performance Products known for value, power, safety and style Street & Racing Technology has five hallmarks: awe-inspiring powertrain; outstanding ride and handling; aggressive exterior; race inspired interior; for discerning performance driving enthusiast The most up-to-date and complete commercial vehicle offerings of any EU producer with strong position in Europe and Latin America Established its own brand identity in 2009, Ram Trucks & Commercial Vehicles deliver on customer priorities with best-in-class capabilities and class exclusive features Luxury brand combining high- performance, highly refined craftsmanship and a high degree

• f personalization

Unique iconic asset, a legendary brand since 1947 with strong relationship between road & racing cars Authentic original parts, accessories & services with unique personalization

• pportunities

Sales of Mopar parts provide less cyclical revenue stream, profit and cash flow generation

MASS VEHICLE BRANDS WITH REGIONAL FOCUS

• Fiat brand to play in Europe, Latin

America and APAC regions with iconic intros in North America

• Chrysler fully integrated into Lancia

in Europe (RHD markets excepted)

• Dodge and RAM being mostly

maintained as American brands with select products being integrated into Fiat brand over time

• High-performance versions by

Abarth and SRT

• Customization leadership and global

service & parts footprint

19

Update on Integration Activities & Synergies

• New Chrysler formed out of “363” sale June 2009 with Fiat at 20%
• Government loans repaid in May 2011, 6 years early; Fiat ownership

up to 58.5% current

• GEC formed to drive single management organization with 4 regional

hubs Sept 2011

• Chrysler sales activities integrated into Fiat in EMEA & LATAM
• Fiat brand successfully launched in NAFTA with Fiat 500 early 2011
• Converged to 3 key architectures and launched first vehicle with New

Panda (Mini), 500L (Small), Dart (Compact)

• Maserati brand relaunch accelerating, 2 new sedans launching H1

2013

• Integrating Fiat LCV vehicles into RAM brand to complete full-range

commercial vehicle brand

• Completing worldwide powertrain offering with Fire 1.4 in NAFTA,

Pentastar downsize for APAC, 8-speed/9-speed planetary transmission

• APAC business developing driven by Jeep SUV success, localization

started with launch of Viaggio in China

• Purchasing & WCM progressing with significant savings, efficiency &

capacity improvement

• No longer a marginal player in global ranking

20

Fiat Group’s View on EMEA

21

EXTERNAL MARKET FACTORS

• Slump in European market demand, with 2012 being

the 5th consecutive year of decline

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

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

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

peak in 2007

• European LCV volumes expected at ~1.6 million units and

down 30+% from 2.4mn peak in 2007

• Pricing pressure, especially for mass market segments
• Further pressure from Korean and potential Japanese

and Indian FTA’s

• Market becoming bi-polar with profitability limited to

premium

• Low-end brands increasingly relevant in mass market
• Lack of visibility for recovery to pre-crisis level
• Structural overcapacity of European manufacturers

will delay any pricing recovery

• Industry heavily regulated and no moves to simplify

88% 80% ~69% 56% 52% ~45%

2010 2011 2012E Harbour definition Technical definition

GROUP CAPACITY UTILIZATION IN EMEA

(passenger cars & LCVs; including JVs; percent)

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

MARKET EXPECTED TO BE FLAT IN 2013 AND THEN

GRADUAL RECOVERY TO ~15MN IN 2015/2016

(PASSENGER CARS & LCVS)

Current State and Industry Forecast in EMEA

13.9 15.4 16.5 17.4 18.2 14.4 15.3 14.1 13.9 14.1 14.9 15.6 2010 2011 2012E 2013E 2014E 2015E 2016E Fiat forecast @ 2010 Investor Day Revised forecast

EU27+EFTA

(passenger cars & LCVs)

22

We have chosen the second option because:

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

elsewhere

• We have at least 3 brands that are capable of competing in the higher margin business
• Fiat-Chrysler has developed over the last 3 years the relevant architectures and baseline

powertrains to enter the premium end of the business and

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

OR

REMAIN FOCUSED ON NON-PREMIUM MASS-MARKET AND

RATIONALIZE CAPACITY BY CLOSING 1 OR MORE PLANTS

1

LEVERAGE HISTORICAL PREMIUM BRAND HERITAGE (ALFA ROMEO & MASERATI), RE-ALIGN PRODUCT PORTFOLIO AND REPOSITION THE

BUSINESS FOR THE FUTURE

2

BOTTOM LINE, WE NEED TO STOP CHASING OUR OWN TAIL IN EMEA

Solving the EMEA Quandary

23

1. Focus Fiat brand on 500 and Panda as pillar vehicles (brands within a brand) and derive all future products therefrom 2. Reduce/curtail Lancia exposure, preserving uniqueness of Ypsilon and rely on Chrysler’s NAFTA development to feed European brand, if economically viable 3. Focus on Alfa Romeo and Maserati to access higher-end of bi-polar market 4. Fully flesh out Jeep brand by developing appropriate products for European and international markets 5. Continue to develop and maintain leading position in LCVs OVERRIDING OBJECTIVES ARE: 1. TO UTILIZE EMEA PRODUCTION BASE TO DEVELOP OUR GLOBAL BRANDS (ALFA ROMEO, MASERATI, JEEP AND THE FIAT 500 “FAMILY”) 2. TO SHIFT A SIGNIFICANT PORTION OF PRODUCT PORTFOLIO TOWARDS

HIGHER MARGIN OPPORTUNITIES

Fiat Group Strategy Going Forward in EMEA

24

2013 2014 2012 2015 2016

NOT CURRENTLY IN PRODUCTION ANYWHERE

• nly for EMEA

for EMEA and export for EMEA

VEHICLES

PRODUCED IN EMEA for EMEA and export

• nly for EMEA

OUTSIDE ITALY IN ITALY

for EMEA and export New model

IMPORTED

VEHICLES Refresh MODEL

REFRESH

OUTSIDE ITALY IN ITALY

Major new model launches in EMEA

(Start of Production within each year indicated)

25

• Products needed for competitive offering

in Europe are complementary to those produced in NAFTA and LATAM where production capacity is or will soon be saturated as Chrysler product offering continues to be renewed through 2015

• Target to utilize up to 15% of capacity for

export, especially for Jeep smaller SUV (not currently in production anywhere), Alfa Romeo and Maserati brands

• Architecture allocation
• Italian footprint for higher value-added

production

• Focus ex-Italy on smaller segments
• Working with Italian Government on

actions to improve competitiveness for export

• New Union agreement in place which

addresses labor flexibility issue but need full adherence

Synergies and Targets

Utilize European manufacturing base for worldwide volume growth

Our new EMEA Targets

• 2012 confirmed Trading Loss of ~€700

million

• 2013 European market expected to be

flat and EMEA loss expected at similar or slightly lower level

• Actions on product plan and commitment
• f capital to Italian manufacturing sites
• are dependent on respect and compliance

with new labor agreements;

• will require 24-36 months for

implementation and

• will allow Fiat-Chrysler in EMEA to recover

some market share in a more rational market and to act as export base for sales by other regions

• Break-even achievable in 2015-16

26

GROUP INVESTOR RELATIONS TEAM

Marco Auriemma  +39-011-006-3290 Vice President Alexandra Deschner  +39-011-006-2308 Timothy Krause  +1-248-512-2923 Paolo Mosole  +39-011-006-1064 Sara Nicola  +39-011-006-2572 Maristella Borotto  +39-011-006-2709 email: investor.relations@fiatspa.com InvestorRelations@chrysler.com websites: www.fiatspa.com www.chryslergroupllc.com

Contacts