Fiat CEO Sergio Marchionne impressed North American financial investors when he made an upbeat presentation in to them - titled "Fiat Group: In Competitive Mood" - in New York, late last week. It was the first time that Marchionne had briefed US investors face-to-face since he took over responsibility for steering the Fiat Group's fortunes, and by all accounts he was very well received. Giant US Investment Bank JP Morgan announced earlier today that the would keep Fiat Group shares overweight, with a target price of 8.5 euro (well above today's closing price of 7.58 euro on the Milan bourse). "Among the most interesting details," commented one analyst - who attended the presentation - this morning, "is the sales mix for the new Punto which has been better than expected. This could bring some surprises in both prices and margins in the auto unit."

Marchionne's investor presentation demonstrated as to where the Fiat Group had gone wrong in recent years, and to outline how the Italian carmaker would reclaim its place in the automotive industry, as well as offering feasible projections for the near future. Fiat has made "focus on leadership as the key agent of change," while the shift "from conglomerate to industrial group" has seen the disposal of many non-core assets. Overhanging onetary and financial issues have now been resolved, industrial flexibility has been regained, a "customer-centric mindset" has become the focus of management attention, while the Group's core strengths have been identified and leveraged.
 

The Fiat Group expects to turn in a net profit of 1.6-2.0 billion euros in 2007, while operating margins are targeted to rise to 5-6 percent, against neutral figures for 2004. Fiat Auto will target positive operating margins of 2-4 pct by 2007, against a negative 1.5 pct this year. This will be achieved in part by the greater mix of higher specification models that are currently being ordered, not least from the key new Fiat Grande Punto range. Iveco will raise margins up to around 7.5 pct, while CNH Global will achieve margins of 10 pct, will up from the current 6.0-6.5 pct.

Manpower ulitisation is projected rise to 100 pct at five out of six Italian plants by 2008, and Fiat will continue to make full use of the temporary shutdown facility in the immediate future to align production demand. The central staff headcount is down by 30 pct this year saving Fiat 65 million euros. As Marchionne - who last week was elected President of manufacturer body ACEA for 2006 - continues to chop out costs, advertising spending will drop by 150 million euros year-on-year (an 18 pct drop), while Research & Development spending will fall by 20 pct, saving a further 200 million euros. 75 pct of Fiat Auto products will be derived from four main platforms by 2009.

Marchionne emphasised his commitment to striking up targeted alliances with other carmakers, where Fiat would benefit, the 'no equity' approach allowing for greater flexibility and a retention of independence. He cited the recent extension of co-operation agreements with Peugeot-Citroen (PSA) and Tofas (in Turkey), as well as the new A-segment car to be built with Ford, the Memorandum of Understanding signed with Tata Motors, the licensing agreement with Zastava in Serbia, and another similar arrangement with Suzuki, but concerning engines.