Fiat reported a net profit for the first time in 14 quarters, helped by the payout from GM to end their joint alliance and an improvement in margins.

"Despite a lower auto market demand which, in the quarter, caused a decline in Group revenues (-2.4%), Group trading profit – the new indicator that measures the regular company operations – almost doubled (from 24 million euros to 47 million euros), and Fiat Auto cut its loss from 146 million euros to 129 million euros," said this morning's statement, issued in Turin.

"Particularly positive was the performance of Iveco, with improved revenues by about 5%," Fiat announced, "and of Fiat Auto’s commercial vehicles, with a market share of about 40% in Italy which rose to 43.9% in April.

"During the first three months of 2005, Fiat achieved the leadership position in the Brazilian market for cars and commercial vehicles with a share of 24.6%, as registrations of its new vehicles rose by 15.8%, well ahead of the 4.9% recorded by the market as a whole.

"Net income amounted to 293 million euros, an improvement of 685 million euros due to the realized gain on the first installment of the settlement with General Motors attributable to the first quarter of 2005. In addition, the Group made important strategic decisions in the first quarter of 2005, including the creation of an alliance between Iveco Finance and Barclays that will provide financial services to Iveco customers, and the establishment of Fiat Powertrain Technologies. All of the Group’s engine and transmission know-how will be combined within this new industrial business unit, which will spearhead technological development in powertrain and drive sales of engine systems to third parties."

FIAT GROUP - CNH AND IVECO HELP TO OFFSET AUTO DIVISION LOSSES

The Fiat Group reported revenues of 10.8 billion euros, compared with 11 billion euros in the first three months of 2004. This 2.4 percent decrease was due to lower unit sales in the auto division, but was offset in part by gains from CNH, Iveco and the Components and Production Systems Areas.

FIAT AUTO - HARSH ENVIRONMENT AS THEY AWAIT NEW MODELS

Fiat Auto booked revenues of 4.6 billion euros, compared with 5.1 billion euros in the first three months of 2004. The 9.3% decrease is mainly attributable to a drop in units sold in a declining Western European market (-2.6%). The only Western European markets experiencing growth were Spain, where the market held steady, and France, where registrations grew by 3.7%. Financial services generated revenues of 153 million euros, or 21% less than in the first quarter of 2004. A reduction in business volume and the sale of the UK retail finance operations in the closing months of 2004 account for this decrease.
 

In the first three months of 2005, Fiat Auto shipped about 419,000 vehicles (-11.8%), of which 285,000 were sold in Western Europe. This shortfall was chiefly due to the negative demand trend that characterized Western Europe and the Italian market in particular.

The Automobile operations are facing an extremely harsh competitive environment while waiting for the upcoming launch of new models and pursuing a strategy that concentrates on sales offering the most attractive margins. Revenues were down in virtually all major European markets. Only in France did sales hold at the same level as in the first three months of 2004.

FERRARI MASERATI - RISING DEMAND FOR THE F430 AND QUATTROPORTE

Ferrari – Maserati reported revenues of 358 million euros, up 6.5% over the first three months of 2004. This increase reflects higher unit sales by Maserati, which benefited from strong demand for the Quattroporte. Shipments of Ferrari automobiles decreased due to the gradual retirement of the 360 and “Enzo” from the model lineup, offset in part by rising demand for the 612 Scaglietti and the launch of the F430, which generated a remarkable number of new orders.

In the first quarter of 2005, Ferrari – Maserati had a trading loss of 37 million euros, attributable to the unfavorable seasonal impact of the costs incurred by the racing operations.

The improvement over a loss of 39 million euros in the first three months of 2004 is mainly due to significant progress made in controlling production costs, offset in part by a less profitable product mix, the negative impact of foreign currency translations and higher research and development expenditures.