The Board of Directors of Fiat S.p.A. met today in Turin under the chairmanship of Luca Cordero di Montezemolo to approve the Group’s second quarter 2008 results.

Group Results – Second Quarter

Group revenues for Q2 2008 totalled €17 billion, an 11.8% increase over the same period in 2007, with all industrial businesses contributing to the increase. Group trading profit for the second quarter was €1,131 million, representing an increase of €185 million (+19.6%) over the same period in 2007. The trading margin improved to 6.7% from 6.2%. Net financial expenses for the quarter totalled €231 million compared to €111 million in Q2 2007. The €120 million increase includes the impact of the difference in the mark-to-market of two stock options related equity swap (€ 148 million swing, with a €79 million charge in Q2 2008 against a €69 million gain in Q2 2007). In addition, Q2 2007 included a €43 million charge for early repayment of a CNH bond (original maturity in 2011).

Profit before taxes totalled €955 million, an increase of €80 million over Q2 2007. Higher operating profit (+€185 million) and an increase in investment income (+€15 million) more than offset higher net financial expense (+€120 million). Income taxes totalled €309 million (€248 million for Q2 2007) representing an effective tax rate of 32.4%, at the high end of the Group’s expected effective rate for FY 2008 (driven in the main by tax related aspects of the mark-to-market of the two stock option related equity swaps). Net profit (before minority interests) was €646 million, compared to €627 million for the second quarter of 2007.

The Group generated net industrial cash flow (change in net industrial debt, excluding capital increases, dividends, share buy-backs, and the impact of foreign currency translation) of approximately €1.1 billion due to positive operating performance and working capital improvements, partially offset by capital expenditures of approximately €1 billion (€0.3 billion higher than in Q2 2007). After dividend distributions of €535 million (including €35 million to minority shareholders of consolidated entities, principally Ferrari and CNH) and share repurchases of €61 million, net industrial debt was reduced by €0.6 billion to €510 million. The Group’s liquidity at 30 June 2008 was €4.7 billion, in line with the Group’s objective of maintaining levels at ~€ 5 billion level.

Group Results – First Half

For the first half of 2008, Fiat Group revenues totalled €32 billion, an increase of 10.9% over the prior period, with all industrial businesses contributing. The semester closed with an operating profit of €1,914 million, including €17 million in unusual income, primarily relating to the release of provisions for risks and restructuring costs which were deemed unnecessary. The €373 million increase over 2007 was driven in the main by a €356 million increase in trading profit.

Net financial expense for the first half totalled €441 million (€168 million in 2007) and included a negative €142 million effect from the marking-to-market of two stock option related equity swaps (the equivalent item produced a €160 million gain in H1 2007, with a net difference year-over-year of €302 million). H1 2007 number included also a €43 million pre-payment charge for the early retirement of a CNH bond.

Profit before taxes was €1,591 million for the first half, compared with the €1,449 million figure for H1 2007. The €142 million increase was attributable to higher operating profit (+€373 million) and an increase in investment income (+€42 million) which more than offset higher net financial expense. Net profit (before minority interests) was €1,073 million for the first half, as compared to €1,003 million for the same period in 2007.

In the first half 2008, net industrial cash flow was negative for approximately €0.1 billion, wholly driven by seasonal factors. Strong cash generation from operations was reduced by a €0.5 billion working capital absorption and €1.6 billion in capital expenditures (€0.4 billion higher than in H1 2007). In addition, the Group distributed €544 million dividends (including €35 million to minority shareholders of consolidated entities) and made share buy-back for a total of €239 million. As a result, Net Industrial Debt rose € 0.9 billion in the semester.

Fiat Group Automobiles

Second Quarter

Fiat Group Automobiles contributed revenues of €7.8 billion, up 14.6% over Q2 2007, boosted by the success of new models and the continuing favourable performance of the Brazilian market. Fiat Group Automobiles delivered a total of 644,700 units, up 11.4% over Q2 2007. Approximately 384,200 automobiles were delivered in Western Europe, an increase of 6.6%.

Deliveries declined moderately in Italy (-1.8%) wholly attributable to very weak market conditions (-13.4%), whereas good growth was achieved in France (+61.6%), Germany (+29.9%), and Great Britain (+9.5%), all of which significantly outperformed or ran counter to the trend in market demand. In Spain, the sector performed in line with a severely declining market.

The Fiat brand continued its positive performance. In Europe, the Fiat Panda and the 500 were the most sold A-segment cars and the Punto was amongst the models in its segment experiencing the highest level of demand. The significant success of the Lancia Musa in several major European markets is also worthy of note. Alfa Romeo began its return to the sales volumes and market share levels held prior to restructuring at the Giambattista Vico plant.

In Q2 2008, the Western European passenger vehicle market declined by 2.5% year-on-year. This performance was driven by the marked decrease in demand in Italy (-13.4%) - reflecting a general economic slowdown and accelerating increases in fuel prices - and Spain (-19.6%), in addition to a slight decline in Great Britain (-2.5%). However, growth was achieved in both France (+7.4%) and Germany (+4.4%). The Polish market expanded by 7.3% and demand in Brazil surged 25.1%.

Fiat Group Automobiles continued to make gains in market share. Its share of the Italian passenger vehicle market reached 33.0%, up 1.6 percentage points year-on-year. In Western Europe, despite the negative performance of the Italian market, its market share stood at 8.3%, marking an increase of 0.1 percentage points. During the quarter, the Fiat brand continued to win market share in Western Europe. In Italy alone its share rose to 25.6% (+1.4 percentage points). The Sector’s deliveries in Brazil climbed 27.2% over Q2 2007 and it confirmed its position as market leader with a 25.5% market share (down 0.4 percentage points).

Light commercial vehicles delivered a total of 123,200 units in Q2 2008, a 20.8% year-on-year improvement. In Western Europe, where the market contracted 3.2%, deliveries rose 16.8% to 77,000 units. Fiat Professional benefited from the significant contribution of models such as the Ducato, Scudo, Doblò and new Fiorino Cargo, which went on sale at the end of 2007, followed by the Combi version offering a mixed passenger/cargo configuration, during the second quarter of 2008. Fiat Professional’s market share reached 13.3% in Western Europe (+0.6 percentage points over Q2 2007) and 44.8% in Italy (+2.1 percentage points).

For the second quarter of 2008, Fiat Group Automobiles had trading profit of €243 million (3.1% of revenues), a 25.9% increase over the €193 million (2.8% of revenues) reported for the second quarter of 2007. This increase was driven by higher volumes, a more favourable product mix resulting from the introduction of new models and, in particular, the positive performance of the Brazilian market.

In the second quarter of 2008, Lancia and Alfa Romeo each presented new models considered key to the development of their respective brands: the Delta and the MiTo. Delta is Lancia’s entry in the mid-size sedan segment, offering original solutions in both technology and style. The MiTo packs all of Alfa Romeo’s spirit in the sportiest compact available in the European market, an automobile designed to make the brand accessible to young customers, bringing the dynamism of Alfa and its state-of-the-art technology to the B segment for the first time. Abarth also had a new offering, having just launched the 500 under the scorpion trademark: a small car capable of offering high performance and the highest level of safety. Two special versions will be produced, one of which has been designed for racing. Fiat updated its SUV, the Fiat Sedici, with a 4x2 version and improved its offering for the 2008 Grande Punto with versions targeted specifically at younger customers.

First Half

Fiat Group Automobiles reported €14.6 billion in revenues, up 11.6% year-on-year driven by increases in volumes. Fiat Group Automobiles delivered a total of 1,208,300 units (+7.9%) in H1 2008, of which 718,400 units in Western Europe, where there was a slight rise in volumes (+0.3%) with the overall passenger vehicle market remaining weak. Fiat Group Automobiles reported significant gains in France (+45.7%) and Germany (+23%) and positive results in Great Britain (+2.8%), whereas declines were experienced in Italy (-6.8%) and Spain (-26.3%). The Western European market contracted 2.7% during the first six months. There was a marked decline in demand in Italy (-11.5%) and Spain (-17.6%), as well as a slight drop in Great Britain (-1.6%). The passenger vehicle market expanded however in both France (+4.5%) and Germany (+3.6%). Fiat Group Automobiles’ market share in Italy stood at 32% (+0.4 percentage points over H1 2007), continuing a positive trend. Market share in Western Europe remained substantially stable at 8.3% (-0.1 percentage points). There was significant growth in deliveries in Brazil (+30.6%), and Fiat Group Automobiles closed the first six months with a 25.5% market share, an increase of 0.1 percentage points, in a market that is continuing to experience double-digit growth (+26.6%).

Light commercial vehicle deliveries totalled 228,500 units for the first six months, an increase of 16.5% over the same period for the prior year. In Western Europe, where overall demand fell 2.5%, a total of 142,400 units were delivered, representing a 13.5% increase. Market share for Fiat Professional increased to 43.5% in Italy (+1.2 percentage points) and 12.4% in Western Europe (+0.7 percentage points).

Trading profit for Fiat Group Automobiles for the first half was €436 million (3% of revenues), a 13.2% increase over the €385 million for Q2 2007 (2.9% of revenues) driven by higher volumes, a more favourable product mix resulting from the introduction of new models and, in particular, the positive performance of the Brazilian market, partially offset by exceptional costs relating to the temporary closure of the Giambattista Vico plant.

Maserati

For Q2 2008, Maserati reported €205 million in revenues, an increase of 15.8% over the same period in 2007. This improvement is primarily attributable to the excellent performance of the GranTurismo. Deliveries to the network climbed to 2,261 units in Q2 2008, up 21.4% over Q2 2007. For Q2 2008, trading profit was €12 million (5.9% of revenues), a marked improvement over the €1 million figure for Q2 2007 driven by strong sales performance and significant gains in cost efficiency, despite the considerable negative impact of a weak US dollar.

On 23 June, the first photos of the new Maserati Quattroporte were released when the vehicle was presented at all Maserati dealers. Available in two different versions, the Quattroporte and the Quattroporte S, the new Maserati is currently being presented to the international press.

Maserati booked €398 million in revenues in H1 2008, up 15.7% over the same period for the prior year. Deliveries to the sales network were up 21.4% (4,495 units), owing to the significant contribution of the GranTurismo, despite a 15% decline for the reference market overall. The order backlog stood at 2,462 units at the end of June, including 589 orders for the GranTurismo S, which was presented at the Geneva Motor Show in March 2008 and went on sale at the beginning of July. Maserati reported trading profit of €22 million, or 5.5% of revenues, for H1 2008, a significant improvement over the break-even reported for H1 2007.

Ferrari reported €513 million in revenues for Q2 2008, up 21.3% year-on-year, driven primarily by sales of the 430 Scuderia, the 612 Scaglietti, and the 599 GTB Fiorano. A total of 1,769 units were delivered to the sales network during the period (+7.1%), whereas sales to end customers totalled 1,861 units (+7%). Ferrari closed the quarter with a trading profit of €105 million (20.5% of revenues), up 50% from €70 million (16.5% of revenues) for Q2 2007. It is the highest reported margin in Ferrari’s history. This positive performance is primarily attributable to the increase in sales volumes and cost efficiency gains, including a significant decrease in the net cost of Formula 1 racing.

CNH – Case New Holland revenues for Q2 2008 amounted to €3.6 billion, an increase of 10.6% over Q2 2007. In US dollar terms revenues rose 28.1%, mainly driven by strong growth in agricultural equipment sales worldwide and in construction equipment sales in Latin America and Rest of World markets, together with improved product mix and pricing. Worldwide, the agricultural equipment industry experienced growth in retail unit volumes for tractors and combine harvesters of 7% and 31%, respectively, over Q2 2007.

Demand for combine harvesters was stronger in every region, more than doubling in Latin America and increasing by nearly 50% in Western Europe. Demand for tractors grew strongly in Latin America and was more moderate in Western Europe and the Rest of World. In North America, sales decreased for under 40 hp models but were up for higher powered units.

CNH’s brands were well placed to benefit from the agricultural equipment industry’s strong growth. Worldwide tractor market share was up with significant gains in over 40 hp achieved in Latin America, Rest of World and North America. Overall Combine market share was slightly down, driven wholly by capacity constraints. Nonetheless, the Sector achieved market share gains in Latin America and strong volume gains in total. Retail unit sales for the construction equipment industry worldwide remained at near record high levels. Latin America and Rest of World markets continued to grow, despite declines in Western Europe and weak market conditions in North America. Industry sales of heavy construction equipment were up by 11%, with robust performance in Latin America and Rest of World, while light construction equipment industry retail sales declined by 11%, driven by drops in North America and Western Europe.

CNH continued to benefit from its global construction equipment presence in the quarter, with a stable worldwide market share. In the booming Latin American markets, unit sales of both heavy and light equipment grew with share gains in light equipment while heavy equipment was stable, constrained by production capacity. In growing Rest of World markets, unit sales increased in both light and heavy equipment; market share grew in light equipment, stable in heavy. In the soft North American market, share of heavy equipment was flat while light equipment was down. In Western Europe, share declined slightly.

CNH closed the second quarter of 2008 with a trading profit of €399 million (11% of revenues), an increase of €51 million over the €348 million level (10.6% of revenues) for Q2 2007 (up 32.9% in dollar terms). Agricultural Equipment’s sales growth, mix improvements and pricing actions more than offset higher input costs (primarily steel) and the costs associated with industrial bottlenecks caused in large part by rapidly increasing volumes. Pricing and operating actions implemented in previous quarters are addressing increasing material cost pressures and production capacity constraints.

In the quarter, all CNH brands continued the launch of new, re-powered and up-graded products further widening their product offering. In North America, New Holland Agricultural Equipment launched the 523-horsepower CR9080 Twin Rotor Combine® and the TV6070 Bidirectional™ tractor. In Europe, the brand launched three T4000F specialty tractors. Case IH Agricultural Equipment launched extensions in North America, including the Farmall 65C and 75C, 64 and 76- horsepower Tier 3 compliant compact utility tractors. In Europe, the brand launched the Quantum 65C and 75C. The Magnum 335 was launched in Australia. New Holland Construction Equipment launched products upgraded with new functionality, including the E385B and E485B demolition series machines. Case Construction Equipment launched re-powered models ranging from crawler excavators to wheel loaders and tractor loader backhoes.

CNH had revenues of €6.6 billion for H1 2008, up 10.4% over the same period in 2007. In U.S. dollar terms, revenues grew by 27.1%. Increased sales of higher-value high horsepower tractors and combines, better mix and pricing actions drove the improvement. Trading profit was €597 million (9.1% of revenues) up €60 million over H1 2007 (€537 million and 9.0% trading margin). The increase was 28.2% in U.S. dollar terms. Agricultural Equipment’s sales growth, improved mix, and pricing actions more than offset higher procurement, manufacturing and expediting costs driven by rapidly increasing volumes.

Iveco reported €3.1 billion in revenues in Q2 2008, up 7.8% on the back of higher sales volumes and improved prices. Iveco delivered a total of 59,047 vehicles during the quarter, achieving growth of 4.3% over Q2 2007. For Western Europe, a total of 38,050 vehicles were delivered, representing a decline of 7.4% after the large gain posted in Q1 2008. Declines were experienced in almost all of Europe, with the exception of France (+10.4%). For the Sector’s main geographic markets outside of Western Europe, deliveries were up sharply in both Eastern Europe (+20.1%) and Latin America (+46.9%).

Iveco’s market share in Western Europe stood at 10.0% - slightly below Q2 2007 (-0.5 percentage points) as a result of the decision to protect margins - but was slightly up versus Q1 2008 (+0.3 percentage points). Market share in the light vehicle segment decreased by 0.5 percentage points versus Q2 2007, attributable to growing demand in the “van” segment, being predominantly met by car-based models. The market share in the medium segment went down 1.3 percentage points, reflecting competition from low priced Japanese products and the postponement of several deliveries to the second half of 2008. In the heavy vehicle segment, there was a slight decrease in market share of 0.5 percentage points. Iveco had trading profit of €248 million (8% of revenues), up €24 million or 10.7% over the €224 million figure (7.8% of revenues) for Q2 2007, primarily benefiting from higher sales volumes and improved pricing.

In May, Iveco launched the new Eurocargo, the mid-sized model in its product range. With a fully redesigned cabin and upgraded transmission system and powered by the successful Tector range of engines, the Eurocargo is an even more competitive vehicle offering maximum productivity. At Auto China 2008 in Beijing at the end of April, Iveco and its Chinese partner SAIC gave a preview of the 908, the locally manufactured top-of-the-range heavy vehicle, as well as the new 2008 version of the Power Daily, a light commercial vehicle.

FPT Powertrain Technologies reported €2.1 billion in revenues for Q2 2008, a 14.2% year-on-year increase. Sales to external customers and joint ventures accounted for 21% of the total (24% for Q2 2007). Revenues for the Passenger & Commercial Vehicles (P&CV) product line totalled €1.1 billion (+10.6%), of which 83% was from sales to other Group Sectors. A total of 718,600 engines (+6.2%) and 590,600 transmissions (+8.7%) were sold during the quarter. Industrial & Marine (I&M) reported €1 billion in revenues, up 19.9% on Q2 2007, driven by an increase in volumes to the Iveco, CNH and Sevel, a JV for the production of light commercial vehicles. Engine sales totalled 158,000 units, up 17.4%, primarily to Iveco (44%), CNH (21%) and Sevel (26%). In addition, 35,200 transmissions (+8.1%) and 89,800 axles (+14.6%) were sold.

FPT reported trading profit of €87 million (4.1% of revenues) for the second quarter, an increase of 13% over the €77 million (4.2% of revenues) figure for the same period in 2007. This improvement was attributable to increased business volumes and efficiency gains in both purchasing and manufacturing.

The new 2.0 litre, 165 hp B-family diesel – which is already compliant with the upcoming Euro-5 emission standards – was offered for the first time on the Lancia Delta. The new 1.9 litre, 190 hp, Two-Stage Turbo was also presented to the press at the debut of the Lancia Delta and will be on the market within the next few months. This innovative engine has two turbo compressors which significantly enhance performance. In July, the 135 hp Fire T-Jet which powers the 500 Abarth was also presented. Also new from Abarth was the "esseesse" kit for the Grande Punto which enhances output on the car’s Fire T-Jet to 180 hp. Finally, the 6-gear M32 automatic transmission (AMT) already adapted for use on the Fiat Bravo in combination with the 1.4 litre T-jet and the 1.6 litre JTD will soon to be offered on the Lancia Delta with 1.6 litre JTD engine.

Revenues for FPT Powertrain Technologies were €4.1 billion for H1 2008 (€2.1 billion for the P&CV product line and €2 billion for the I&M product line), an increase of 15.3% over H1 2007. Sales to external customers and joint ventures represented 22% of total revenues (25% for the first six months of 2007). During the first half, Passenger & Commercial Vehicles sold 1,406,900 engines (+7.4%) and 1,165,700 transmissions (+11.7%). Industrial & Marine delivered a total of 317,500 engines (+22.3%). FPT had trading profit of €134 million (3.3% of revenues), up 10.7% over the €121 million (3.4% of revenues) for H1 2007. The positive impact of increased volumes and efficiency gains was offset by costs associated with faulty production of 1.3 Multijet engines attributable to defective externally provided components.

Teksid reported revenues of €239 million for Q2 2008, up 33.5% year-on-year, partly attributable to the contribution from the Aluminium business unit, which was consolidated in September 2007. On a comparable scope of operations, the increase in revenues would be 11.2%. This increase was due in part to the improvement in volumes for the Cast Iron business (+3%) - driven by higher sales in the NAFTA region following a turnaround in the commercial vehicles market - as well as higher sales in Brazil. The European market, on the other hand, experienced a contraction. The remaining increase was attributable to price increases implemented to offset higher raw material costs.

Teksid reported trading profit of €13 million (€12 million in Q2 2007). Teksid reported €462 million in revenues in H1 2008, up 18.2% over the first six months of the prior year. Excluding the effects of disposal of the Magnesium business unit in early March 2007 and consolidation of the Aluminium business unit, the increase would amount to 10.2%.

Teksid closed the first six months of 2008 with a trading profit of €28 million, compared to a €32 million profit for H1 2007, with the reduction attributable in the main to the integration of the aluminium activities.