During a conference call following the announcement of the Fiat Group's full year results yesterday, CEO Sergio Marchionne discussed the report, and looked to the future. Fiat will not close any plants in Italy he said, and the company is trying to balance market demand with the system's productive capacity. In regard to the Italian plants added that the company was trying to use the subsidised lay-off scheme as little as possible. He also said that their goal was to eventually produce 1,800,000 cars per year.

In reference to much speculation that the carmaker could beat its 2006 and 2007 financial performance forecasts Marchionne told the conference call that Fiat may "move the targets when we have a substantial part of 2006 under our belt," adding that cashflow should be positive this year: "I expect the auto business to stop burning cash in 2006. At worst it will be cash flow neutral.' Fiat Auto revealed in the financial report that it is targeting positive product margins this year of between 0.5 and 1.0 percent, as opposed to a loss last year.

The upbeat CEO sees the fortunes of the 'sporty' Alfa Romeo brand as being Fiat Auto's main concern for 2006, revamping and repositioning its market position. Marchionne said that it is "the brand with the biggest potential but we are struggling on repositioning." The arrival of the Alfa 159 sedan has got off to a slow start because only a limited range has been available so far.
 

As well a a wider array of further engine options, the arrival of the 'Sportwagon' version of the Alfa 159 next month will be significant, with Marchionne believing that 'estate' will account for a highly "significant" percentage of sales. He is aiming for sales of 85,000 units of the Alfa 159 in 2006, with a rise to around 120,000 in 2007, a reduction on initially set targets. "We had quality issues in 2005, now it is stable and we are producing sufficient volumes to penetrate the European market," he added.

Rectifying the recent slump in demand for the Alfa 147 hatchback will also be a priority for 2006, and its repositioning on price and value to more accurately target rival's offerings is now 'starting to show results', Marchionne said. The new Brera sportscar, launched in December in Italy, as the forthcoming Brera-based Spider convertible, will help Alfa Romeo through 2006 which is regarded as "a transition year" and will complete the brand's range. He added that overhauling the European distribution network is proceeding well. The situation on the ground has been rectified in France, and positive progress is now being made on Spain and Germany, while the UK will see major investment this year.

Fiat Group Chairman, Luca di Montezemolo expressed "deep satisfaction" with respect to yesterday's results and underlined that "these are results which a year and a half ago were difficult to predict, and which create the premise of interesting development for years to come". He added that "all sectors closed in the black and improved with respect to 2004. All targets given by Marchionne, to analysts in July of 2004 were exceeded, and target objectives for 2006 have been confirmed."