Group revenues for the second quarter totaled €14.8 billion, a 12.5% increase (+6.7% at constant exchange rates) over the same period in 2009, when all Group businesses were suffering the effects of weak trading conditions. All sectors contributed to the recovery in the quarter, with particularly positive top line performance at CNH, Iveco and all Components and Production Systems Sectors. The Automobiles business continued to improve, despite the phase-out of eco-incentives in Italy and Germany.

The Group reported trading profit of €651 million for the quarter (trading margin: 4.4%), compared with €310 million (trading margin: 2.4%) for the same period in 2009. The improvement in trading performance was driven by higher volumes, a better sales mix and the continuing positive effect of cost containment actions.

Q2 2010 closed with an operating profit of €628 million (€158 million for the second quarter of 2009). The €470 million increase reflects the significant improvement in trading profit (+€341 million) and lower net unusual expense (€23 million for Q2 2010 vs. €152 million for Q2 2009, both primarily attributable to restructuring costs).

Net financial expense totaled €301 million (€161 million for Q2 2009) and included a €19 million loss on the marking-to-market of two stock option-related equity swaps (€39 million gain for Q2 2009). The figure also included a €17 million one-off charge for the early repayment of a CNH bond (original maturity in 2014). Net of these items, financial expense increased €65 million over the prior year, reflecting the cost associated with maintaining liquidity in excess of €10 billion.

Profit before taxes was €374 million (€16 million loss in Q2 2009), due to the significant improvement in operating result (up €470 million) and an increase in investment income (up €60 million), partially offset by higher net financial expense. Income taxes totaled €261 million (€163 million for the second quarter of 2009) and mainly related to taxable income of companies operating outside Italy and employment related taxes in Italy (€22 million). Net profit for the period was €113 million, up €292 million over Q2 2009.

During the quarter, Group net industrial debt decreased by €1 billion, reflecting the strong trading performance and a reduction in working capital attributable to higher activity levels. At 30 June 2010, Group liquidity was €13.5 billion, up €2.3 billion over the first quarter due to a USD 1.5 billion bond issued by CNH in June coupled with positive operating performance.

For the first half of 2010, Fiat Group revenues totaled €27.8 billion, an increase of 13.5% over the prior year (+9.0% at constant exchange rates). The Group reported trading profit of €1,003 million (trading margin: 3.6%), up from €262 million for the first half of 2009 (trading margin: 1.1%). The improvement in trading performance was mainly driven by higher volumes and the continuing emphasis on cost containment actions.

Operating profit for H1 2010 was €980 million, compared to €29 million for the first six months of 2009, due to the significant increase in trading profit (+€741 million) and a €210 million decrease in net unusual expense. Net financial expense totaled €551 million (€371 million for H1 2009) and included a €32 million loss on the mark-to-market value of two stock option-related equity swaps (versus a €53 million gain in the first half of 2009). The figure also included a €17 million one-off charge for the announced early repayment of a CNH bond (original maturity in 2014). Net of these items, financial expense for the period was up €78 million, primarily due to the cost of maintaining a higher level of liquidity.

Profit before taxes was €531 million for the first half (€376 million loss in H1 2009), reflecting a significant improvement in the operating result (up €951 million) and an increase in investment income (up €136 million), partially offset by the €180 million increase in net financial expense. Income taxes totaled €439 million (€214 million for the first half of 2009) and related to taxable income of companies operating outside Italy and employment-related taxes (IRAP) in Italy (€44 million). Net profit for the first half totaled €92 million, compared with a loss of €590 million for the same period in 2009. Group net industrial debt decreased by €0.7 billion in the semester, reflecting the positive operating performance for all businesses.

Fiat Group Automobiles closed the quarter with revenues of €7.4 billion, up 6.4% over the second quarter of 2009, driven by an improved sales mix and favorable currency movements, offset in part by a decline in passenger car volumes. At constant exchange rates, revenues were substantially flat. Fiat Group Automobiles delivered a total of 554,300 passenger cars and light commercial vehicles during the quarter, representing a 6.2% decrease over the second quarter of 2009. In Europe (EU27 + EFTA), deliveries for Fiat Group Automobiles fell 13.2% to 325,600 units. Volumes increased in France (+10.5%), the UK (+0.3%) and Spain, where deliveries essentially tripled for the second consecutive quarter. The non-renewal of eco-incentives impacted performance in Italy (-21.5%) and in Germany (-42.1%).

Fiat Group Automobiles closed Q2 2010 with a trading profit of €185 million, up from €155 million in Q2 2009. The improvement was attributable to an improved mix, primarily related to the performance of light commercial vehicles, purchasing savings and favorable currency movements, partially offset by lower volumes and higher advertising spending due to new product launches. During the quarter, distribution of Chrysler, Jeep and Dodge vehicles began in Italy, France, Germany, Sweden, Denmark, the Netherlands and Belgium.

Fiat Group Automobiles closed the first half with revenues of €14.2 billion, up 13.5% over the first six months of 2009, driven by increased volumes, improved sales mix and favorable currency movements (+7.2% at constant exchange rates). A total of 1,086,700 passenger cars and light commercial vehicles were delivered during the first half, up 2.9% over the same period in 2009 (-2.2% for passenger cars only). In Europe, deliveries were down 1.6% to 655,800 units (-6.4% for passenger cars only). Fiat Group Automobiles achieved significant gains in France (+13.6%), the UK (+20.7%) and Spain (+180%), that were offset by a decrease in Germany (-51.6%). In Italy volumes were unchanged over the prior year. The European passenger car market remained essentially unchanged over the first six months of the prior year, with the increase recorded in the first quarter being essentially reversed during the second quarter. Demand fell significantly in Germany (-28.7%), but was offset by increases in all other principal markets (Italy +2.9%, France +5.4%, the UK +19.9% and Spain +39.5%). Market share for Fiat Group Automobiles in Europe was 8.1% (-0.9 percentage points compared with H1 2009), mainly attributable to performance in Germany and Italy (where there was a decrease in demand for vehicles in the ecological CNG and LPG segments). Share in Germany declined to 3.3% (-2.1 percentage points over 2009) and in Italy to 30.9% (-2.5 percentage points). A total of 193,800 light commercial vehicles were delivered in the first half, an increase of 36.2% over H1 2009. In Europe, where overall market demand rose 8.6%, total deliveries increased 33.7% to 106,200 vehicles. Market share for Fiat Professional rose to 44.9% in Italy (+4.8 percentage points) and to 13.7% for Europe overall (+0.4 percentage points). In Brazil, deliveries of passenger cars and light commercial vehicles increased 3.0%. Fiat Group Automobiles maintained its market leadership, for both cars and light commercial vehicles, achieving a share of 22.8% with the overall market increasing 7.3%.

Fiat Group Automobiles posted a trading profit of €338 million for the first half. The increase over the €125 million figure for H1 2009 was attributable to higher volumes, an improved product mix, attributable to demand for light commercial vehicles, purchasing savings and favorable currency movements, partially offset by higher advertising spending due to new product launches.

For Q2 2010, Maserati reported €174 million in revenues, up 56.8% over the same period in 2009. This increase was attributable to outstanding performance for both the Quattroporte and the new GranCabrio. A total of 1,697 cars were delivered to the network during the quarter, a 45.2% increase over the same period in 2009. Trading profit came in at €8 million (4.6% of revenues) for the quarter, improving significantly over the €2 million figure for Q2 2009. Maserati established a new single-marque championship for the GranTurismo MC Trofeo, the racing version of the GranTurismo S, with a race calendar consisting of 7 major European circuits.

Maserati reported €301 million in revenues for H1 2010, up 33.2% over the same period for the prior year. Sales to the network totaled 2,902 units for the period, increasing 24.8% over the first half of 2009 with a significant contribution from the GranCabrio. Maserati increased sales volumes in almost all markets, with particularly notable performances in the UK (+92%) and China (+147%). As a result of the strong revenue performance and efficiencies achieved, trading profit came to €12 million (4% of revenues), more than double the €5 million in operating profit for the first half of 2009.

For Q2 2010, Ferrari reported revenues of €489 million, up 8.7% over Q2 2009. This increase was attributable to the performance of the Ferrari California in addition to the positive contribution of the new F458 Italia, 599 GTO and the customization program. A total of 1,615 cars were delivered to the network during the quarter, representing a 2.6% increase over Q2 2009. Ferrari closed the quarter with a trading profit of €77 million (€70 million for Q2 2009). This improvement was attributable both to higher sales revenues and benefits realized from efficiency measures. April saw presentation at the Beijing Motor Show of the Ferrari 599 GTO: the most performing street version of a vehicle ever built by the maker from Maranello. Derived from the 599, production of this version will be limited to just 599 vehicles. Powered by a 12-cylinder, 6-liter engine and boasting 670 horsepower, it can accelerate from 0 to 100 in 3.35 seconds and achieve a top speed 335 kilometers per hour. Ferrari was also present at the International Expo in Shanghai where millions of visitors passed to admire the Hy-Kers concept car, the brand’s hybrid vehicle solution. Also of note was the launch of the F458 Italia for the US and right-hand drive markets and the opening of new Ferrari Stores in Manhattan and Johannesburg.

For H1 2010, Ferrari recorded revenues of €903 million, a slight increase over the same period for the prior year. The number of deliveries to the network was up 1.7% to 3,200. Trading profit totaled €116 million for the first half of 2010, compared with €124 million for the same period in 2009. The negative impact of a less favorable product mix, mainly in the first quarter, was partly offset by cost efficiencies.

On April 21st, John Elkann was appointed Chairman of Fiat, replacing Luca Cordero di Montezemolo, who resigned from office having accomplished the mandate given to him by the Company's core shareholder in May 2004. Mr. Montezemolo continues as a member of the Fiat Board of Directors and Chairman of Ferrari. On the same date, Fiat Group held an Investor Day in Turin, during which the CEO, Sergio Marchionne, and members of the Group Executive Council presented the 2010-2014 Business Plan to the financial community. The Plan marks a new chapter in Fiat's history and is designed to ensure the Group opportunity for growth, in particular through the two strategic projects announced during the presentation. The first is the envisaged demerger of various activities from Fiat to create two distinct groups: one focused on the automobiles business (Fiat, which includes FGA, Ferrari, Maserati, Magneti Marelli, Teksid, Comau, as well as the “Passenger & Commercial Vehicles” business line of FPT Powertrain Technologies) and the other on the capital goods business (Fiat Industrial, which includes CNH, Iveco and the “Industrial & Marine” business line of FPT Powertrain Technologies). The second project outlined in the Business Plan, referred to as Fabbrica Italia, addresses Fiat's commitment to strengthening the industrial presence of Fiat Group Automobiles in Italy.

In May, as part of the process to integrate the distribution activities of Fiat Group Automobiles and Chrysler Group in Europe, the two companies began reorganization and integration of the Chrysler and Lancia sales networks. This integration will lead to the creation of a new network of over 1,000 dealerships across Europe by 2014 under a new mandate. Early June saw the inauguration of a new plant in China (located in the automotive industrial district of Jiading, just outside Shanghai) under the joint venture formed in January 2009 between Magneti Marelli and Shanghai Automobile Gear Works (SAGW). This new plant will produce hydraulic components for around 300 thousand Magneti Marelli FreechoiceTM AMT transmissions annually. There were also significant developments in the dialogue with stakeholders on Fiat's vision for the future of the Giambattista Vico plant in Pomigliano d’Arco, which, under the 2010-2014 Business Plan, would be allocated production of the future Panda. Negotiations led to the signing of an agreement with the trade unions FIM, UILM, FISMIC and UGL in June on new work rules aimed at improving the efficiency and competitiveness of the plant. At the beginning of July, Fiat met in Turin with the above mentioned trade unions for the purposes of implementing the agreement. At the meeting, the parties expressed their commitment to adoption of the agreed mechanisms that will guarantee the necessary operating flexibility for the plant. Execution of that agreement according to the stipulated terms and conditions is essential to Fiat maintaining its commitment to realization of the Fabbrica Italia project.