Net industrial debt decreased to €489 million (€542 million at year-end 2010), with capital expenditure largely offset by positive operating cash flow. Capital expenditures, typically low in the first quarter, were consistent with the full year plan. Liquidity increased to €13.1 billion, with the increment over year-end 2010 (€12.2 billion) primarily attributable to the reimbursement of net financial receivables by Fiat Industrial, net of repayments to banks in January (the quarter-end liquidity position does not include proceeds from the recent €1 billion bond issue which was settled on April 1st). Following achievement, in January and April this year, of 2 of 3 performance related events, Fiat has increased its holding in Chrysler Group LLC from 20% to 30%. Fiat confirms its guidance for the year, with trading profit in the range of €0.9 - 1.2 billion, net income of ~€0.3 billion. Net Industrial indebtedness is expected between €1.5-1.8 billion.

Group revenues for the first quarter totaled €9.2 billion, a 7.1% increase over the same period in 2010, with Luxury & Performance brands and Components & Production Systems recording double-digit growth. For Fiat Group Automobiles, revenues were up 2.6% over the first quarter of 2010. Operating profit is aligned to trading profit with no net impact from unusual items. Net financial expense totaled €138 million for the quarter and included a €23 million gain in the mark-to-market value of two stock option-related equity swaps (€13 million loss for Q1 2010). Net of that item, financial expense increased €32 million over the prior year, reflecting the cost of maintaining a higher level of liquidity. Profit before taxes was €153 million, up €14 million over the €139 million figure for the first quarter of 2010. This increase reflects the higher operating result (+€19 million) and lower net financial expense (+€4 million), net of a decrease in investment income (-€9 million).

During the quarter, the European passenger car market (EU27+EFTA) registered a slight year-over-year contraction (-2.0% with 3.7 million units sold to end customers). However, performance was uneven across markets, reflecting differences in the phase-out of incentives programs, as well as variations in macro-economic conditions. In Germany (where the impact of incentives tailed off at the end of 2009), robust economic recovery drove a 13.9% increase in demand, particularly for the higher segments. In France, market demand was up 8.9%, as the order backlog existing at the end of 2010 following the termination of incentives was cleared. In Italy, the market was down 23.1% over Q1 2010, when volumes benefited favorably from the residual effects of eco-incentives, reaching the lowest level in the last 20 years. In Spain, demand dropped 27.3%, reflecting the termination of government incentives, compounded by an unfavorable economic climate. In the UK, there was an 8.7% decline over Q1 2010, when approximately 20% of newly registered vehicles benefited from government incentives. Elsewhere in Europe, double digit growth was recorded in several key markets such as the Netherlands and Austria.

During the quarter, shipment volumes for FGA passenger cars in Europe totaled 245,300 units, an 11.2% decline over 2010. Higher shipments in Germany (+27.8%) and the minor European markets (+11.5% in aggregate) only partially offset declines in Italy (-20.3%), France (-4.3%), the UK (-3.9%) and Spain (-15.2%). The declines were substantially in line with the realignment of the reference segments in each of those markets. Alfa Romeo increased shipments in Europe by more than 70%. With shipments of 24,600 units for the quarter, sales for the Giulietta were in line with the expectations. Both Fiat and Lancia experienced volume declines, however, with performance closely linked to the overall trend for each country and segment. For Europe overall, FGA recorded a 7.1% market share for the quarter, with the 1.5 percentage point year-over-year decline attributable to an unfavorable market mix. In Italy, in particular, share was down 2.4 percentage points to 29.0%. The principal underlying factor was the significant decline in demand for alternative-fuel vehicles (linked to the termination of eco-incentives) – a segment in which Fiat has an approximate 50% share – which accounted for 31% of total demand in Q1 2010 but only 5% in Q1 of this year. Net of that effect, growth for the Italian market would have been 6% with FGA making a 1.4 percentage point share gain. In the other major markets, share was down slightly in Germany (-0.2 percentage points to 2.8%), France (-0.3 p.p. to 3.8%) and the UK (-0.2 p.p. to 2.8%), but increased marginally in Spain (+0.1 p.p. to 3.1%). Positive performance also continued in the Dutch market, with FGA increasing its share from 4.9% to 7.1% – and almost doubling registrations for the quarter – on the back of incentives based on CO2 emissions levels, where FGA is the undisputed market leader. Compared to Q4 2010, share in Europe was up 0.3 percentage points (from 6.8%) and in Italy it was up 0.5 percentage points (from 28.5%).

Fiat brand was the most heavily impacted by these market conditions, with overall share in Europe down from 7.0% to 5.3%. The Fiat 500 continued to improve share in its segment and the Grande Punto MyLife performed well in Italy and Germany, while the drop in share was, in part, attributable to the discontinuation of the Punto Classic, Croma and Multipla. The same factors also impacted Lancia, whose share declined 0.2 percentage points to 0.7%, as the market settled in expectation of the launch of the new Ypsilon in Q2. By contrast, Alfa Romeo increased European market share 0.4 percentage points over 2010 to 1.1%.

For light commercial vehicles, FGA shipped 56,900 units in Europe during the quarter, a 5.4% increase over the same period for 2010, in line with market demand. Volume gains were particularly significant in the major markets, with double-digit increases registered in Germany (+43.8%), France (+15.8%), the UK (+18.5%) and Spain (+22.9%). Italy was the only major market to run counter to the trend, with shipments down 11.2% as a result of particularly weak demand. For Europe overall, Fiat Professional registered a 12.8% share (-0.7 percentage points) with uneven demand across markets resulting in a significantly less favorable mix for the brand. However, share gains were recorded in all major markets. In Italy, share was 46.9% (+0.1 percentage points), even though 2010 performance was underpinned by record demand for the CNG Fiorino. Share was up significantly in Germany (+1.5 percentage points to 12.3%) and the United Kingdom (+0.5 percentage points to 3.7%) and in Spain the brand gained 1.5 percentage points to post a 9.8% share for the quarter, while in France, where the market grew 7.8%, FGA increased new registrations to close the quarter with an 8.9% share (+0.2 percentage points). In both Spain and France, Fiat Professional achieved its highest ever first quarter performance. Driving these results was the Fiat Ducato, with new registrations increasing around 26% for the quarter to 27,000 units.

In Brazil, passenger car demand was substantially unchanged over the prior year (+0.8%), despite the non-renewal of incentives for purchases of small and medium segment vehicles. During the quarter, Fiat shipped a total of 180,200 passenger cars and light commercial vehicles, representing an 8.0% increase over the first three months of 2010. The overall market grew 3.6% (+16.2% for LCVs) and FGA maintained its leadership position with a share of 22.1% (-0.2 percentage points). The success of the Novo Uno continued in 2011 and, in February, it took the no. 1 position in its segment for the first time. In Argentina, the overall market grew significantly, recording a 27.7% increase (+32.7% for light commercial vehicles only). FGA shipments totaled 19,500 passenger cars and light commercial vehicles for the quarter, with overall market share at around 10%. Fiat Group Automobiles closed Q1 2011 with trading profit of €130 million, compared to €153 million for Q1 2010, with production efficiencies only partially offsetting impacts of the European volume decline and higher R&D expenditure in advance of new model releases.

In March, FGA presented several new products at the Geneva Motor Show. Carrying the flag for Fiat brand was the new Fiat Freemont. Making its debut appearance, it is the first Fiat model to come out of the alliance with Chrysler Group and will be available from Q2. The Freemont will be offered with a selection of two turbo-diesel engines, a 140 hp and a 170 hp MultiJet 2.0, both with manual transmission. These will be followed by 2 AWD versions with a 170 hp MultiJet 2.0 and a 276 hp 3.6 V6 gasoline engine, both with automatic transmission. Alfa Romeo showcased the Giulietta and MiTo with the latest enhancements in styling and technology. The 2011 Model Year MiTo presented in Geneva was launched in major European markets in April. Alfa Romeo also unveiled the 4C Concept – a compact mid engine, rear-wheel drive, 2-seater "supercar" - that embodies the brand's sporting spirit that is expected to be commercialized by the end of 2012. One year after initiating integration of its product portfolio with Chrysler brand, Lancia returned to the Geneva Motor Show to introduce the new Ypsilon, Thema and Voyager. Also presented were the Flavia Concept and Flavia Cabrio Concept. The new Ypsilon will be available in most major European markets from June and is being offered in a 5-door version, the concentration of luxury and technology will reaffirm the brand’s leadership in the “B Premium” segment. The Lancia Thema – a luxury sedan with exclusive content – will be available at all European dealerships in the 4th quarter. Space was also given to the Lancia Voyager, the best Multi-Purpose Vehicle of all time, that combines style with versatility. The Delta has been restyled and comes with new trim packages and engine options. Jeep was present at the Geneva Motor Show with the European debut of the new Jeep Compass – its compact SUV – and the world debut of the new Grand Cherokee with a 3.0 liter turbodiesel MultiJet II engine.

On March 1st, as a confirmation of FGA's strong commitment to the environment, for the fourth consecutive year, JATO (the global leader in automotive intelligence) recognized the Fiat brand, for the lowest CO2 emissions of cars sold in Europe in 2010, with an average of 123.1 g/km (4.7 g/km lower than the average for 2009). Fiat was also first in the Group ranking, with average emissions down 5 g/km over the previous year to 125.9 g/km. Alfa Romeo received recognition for the highly-successful Giulietta and MiTo in both Italy and Germany. In Italy, the Giulietta was awarded "La novità dell'anno 2011" by Quattroruote magazine and in Germany it was winner in the compact category of "Die Besten Autos" awarded by Auto Motor und Sport magazine. Readers of the German magazine also voted the MiTo best economy car for the third consecutive year.

For the first quarter of 2011, Ferrari reported revenues of €491 million, an 18.6% increase over the same period in 2010 driven primarily by higher sales volumes and the positive contribution of the 458 Italia and 599 GTO. A total of 1,691 cars were delivered to the network during the quarter, representing a 6.7% increase over Q1 2010. Volumes were higher for both 8-cylinder (+6.5% year-over-year) and 12-cylinder models (+8%). North America maintained its position as Ferrari's no. 1 market with 452 vehicles delivered for the period, accounting for 27% of total sales (+3.1% vs. 2010). Volumes also increased in China with 153 vehicles delivered, representing 9% of total sales (+3.7% vs. 2010). Performance in the remaining markets was substantially in line with Q1 2010. Ferrari closed the quarter with a trading profit of €53 million (€39 million for Q1 2010). The 36% gain was attributable to higher sales volumes, a more favorable product mix and strong results from the customization program.

At the Geneva Motor Show in March, Ferrari presented two major new models: the world premier of the FF, the revolutionary mid-front mounted V12 with 4 seats and all-wheel drive (4RM) capability – the most performing and versatile car in Ferrari's history – and the 458 Italia with the High Emotions Low Emissions system (HELE). The FF combines extreme performance, even on surfaces with a very low grip coefficient (made possible by Ferrari's patented 4RM system), with the handling of a GT and a highly innovative design. The 458 with HELE system, on the other hand, offers CO2 emissions as low as 275 g/km (a 15% reduction compared to the basic model), making it best in its class, another accomplishment to join the more than 20 awards received from the world's most prestigious magazines. Also in March the company announced its appointment of an importer for India, Ferrari's 58th market. The first dealership will be inaugurated in New Delhi this spring and a second is planned for Mumbai before year end.

For Q1 2011, Magneti Marelli reported revenues of €1,486 million, up 16.7% over the first three months of the prior year. In Europe, positive performance in Germany, in addition to higher production volumes for LCVs and the Alfa Romeo Giulietta, compensated for the drop in production for external customers in Poland. The North American market is experiencing a recovery and both Brazil and China recorded healthy levels of demand. All businesses reported volume increases over Q1 2010, with performance for the principal lines as follows:

Lighting - Revenues totaled €436 million for Q1 2011, an increase of approximately 21.7% over the previous year. The growth was primarily driven by the German market and a recovery in the NAFTA region underpinned by new products launched in 2010. Performance in Turkey, Russia and China was also positive; Engine Controls - Revenues for Q1 2011 totaled €252 million, an increase of 6% over the same period for 2010 with growth concentrated in Brazil, China and India, while the European market experienced a slight decline; Electronic Systems - Revenues for Q1 2011 were €186 million, up 23% over Q1 2010. There was particularly strong growth in the telematics area driven by demand from both external customers and Fiat.

Magneti Marelli reported Q1 trading profit of €34 million, compared with €19 million for Q1 2010. The improvement was driven by higher sales volumes and improved production efficiencies which more than compensated for cost pressures from increased components prices. New product developments during the quarter include components for the new Lancia Ypsilon, for which Magneti Marelli developed LED headlights and tail lights, in addition to control units for gasoline and diesel engines, the DFN automated transmission, front and rear suspensions and exhaust systems. Magneti Marelli launched a technology collaboration with Wind River, global leader in embedded and mobile software, for the creation of the first solution for In-Vehicle Infotainment that conforms to the international standards established by the GENIVI consortium, which brings together the leading automakers and automotive electronics producers.