Marco Auriemma - VP-IR Sergio Marchionne - CEO, CEO- Fiat Group Automobiles

Paolo Mosole - Intermonte SIM Max Warburton - UBS Adam Jonas - Morgan Stanley & Co. International Ltd. Thierry Huon - Exane BNP Paribas John Buckland - Man Securities Andrew Lobbenberg - ABN AMRO Equities Ltd. Monica Bosio - Caboto/ Intesa Sanpaolo Horst Schneider - West LB AG Martino De Ambroggi - Euromobiliare SIM S.p.A Philippe Houchois - J.P Morgan

Good afternoon ladies and gentlemen, and welcome to today's Fiat 2007 Second Quarter Results and 2007 First Half Results Conference Call. For your information, today's conference is being recorded. At this time, I would like to turn the call over to our host today, Marco Auriemma of Fiat's Investor Relations Team. Mr. Auriemma, please go ahead. Marco Auriemma - Vice President-Investor Relations: Thank you, operator. Good afternoon to everyone or good morning as the case may be and welcome to Fiat second quarter 2007 results conference call. Many apologies for the delay, we have encountered technical problem in uploading the file on our website, and now it has been solved. The link is available on both fiat.com and fiatgroup.com. As usual, today's call will be hosted by Mr. Sergio Marchionne, our Chief Executive and Mr. Maurizio Francescatti, our Group Treasurer. After the presentation, we will be ready to answer all of your questions. Before I pass the line on to Mr. Marchionne, let me just take care of the usual housekeeping issue and remind you that any forward-looking statement we might make during today's call is subject to the risk and condition mentioned in the Form 20-F which we filed with the SEC on June 29th. And now I will pass on the microphone to Mr. Marchionne. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Good afternoon and apologies for the delay. I was sending a couple of links to our website, so in case you haven't got the presentation, you can try to get to it now. It's available on www.fiatgroup.com which is now currently working. And we have it also on www.fiat.com/analyst/. You should be able to download it from either of those two sites and again apologize. If we find it necessary, we will try and reconvene the conference call to answer any questions you may not get to, if you are [ph] in the presentation. But any way, try and move my way slowly to the presentation, take you through the most important aspects of second quarter 2007. If you do have access to the presentation, I assume you do and I will have to start with page 2. Second quarter '07 has been a relatively significant quarter for Fiat Group for a couple of reasons. I think just from the title of our presentation, which we have called Simply a Quarter of Records. I think we have accomplished a number of significant things in the year. The first is that our turnovers are up almost 12% and in the same perimeter basis; this has been the highest level that Fait Group has achieved in its 100 years of history. We've had the highest volume of cars since the second quarter of 2001. We got the highest volume of vehicles both in Iveco and CNH. In the case of CNH, since the merger in 1999 and since... for Iveco, it's an all time record. Regardless of perimeter, this Group has now posted €946 million in trading profit, which is the highest level it's ever achieved regardless of perimeter in its 100 years of history, so it's up 44%. On the prior year, the automobile sector has more than doubled to €193 million, Iveco is up 37%. Trading profit for CNH is up almost 37% in U.S. dollar terms. So from an operating stand point, its been a phenomenal quarter as we have exceeded even in some ways our own internal expectations and I think that we've reached some significant benchmarks standards in terms of operating margins, which are indicative of the efforts of the [indiscernible] in the last 18 months especially in India as attractive infrastructure. Margins now are 6.2% versus 4.8% in Q2 of last year. The car businesses hovering on a 3%, up for 1.5% a year ago. Iveco is close to 8% at 7.8%, we've already got a significant achievement, achievement of double-digit margins for CNH which we've been forecasting for a while, but we have been able to achieve that number in Q2 '07 with 10.6% and I am beginning to feel comfortable certainly with the target that we've set for ourselves going forward at 2010. Group net income is up 90% to €627 million, we have been able to produce almost €1 billion of cash in the quarter. Of which roughly €500 million has been used to pay dividends to not only the Fiat shareholders but also the CNH minorities and to Ferrari minorities and to fund €230 million of share buybacks which we would carry out in the quarter. On the basis of all that we've done in Q2, we are confirming our target for '07. We affirmed up the trading profit number, €2.7 billion as being the upper limit of what we'd originally indicated as the range. We are confirming the net income number in the range that we previously indicated and that we have brought down the net debt target to about €600 million as of the end of this year. If we could move on to slide number 3, I mean, fair to say that we have been in... all products are performing well in the quarter from cars to trucks to construction equipment and we've been able to achieve significant market share gains across all of our main product offerings in most of our geographic areas. And obviously, capacity utilization has gone up substantially for the manufacturing footprint. As you will see, we've been able to contain... more than contained the escalating cost of raw materials by bringing about material cost efficiencies. And with the exception of CNH, which has had a slight negative impact on trading profit as a result of raw material price increases, most of the sectors have had positive gains year-over-year. We continue to rollout world-class manufacturing; we've got it working now. And we've rolled it out for all the automobile plants and eight other plants across the Group and we are on track to achieve full roll-out by 2008. And we've announced during the quarter three new alliances. The most significant of which and just not to minimize the others, but the most significant of which is the engine supply to Daimler, which I think is the significant recognition by a truck manufacturer the relevance of the engine technology assists within Fiat Group and certainly reinforces the reasoning and the rationale for having established Fiat product trained technologies back in 2005. If we move on to page number 4, this is purely a volume chart, and I don't want to spend most... a lot of time on this. But, the volume gain in Q2 are consistent and probably in some cases better than what we've been able to achieve in the first part of the year. We're up double-digits, both for the quarter and for the half year. All sectors are up with the exception of Components as you all know from the last conference call that we've had, has gone through a period or restructuring and although the top line has come down year-over-year, we have been to stand the losses in the business and effectively post a small operating profit, which confirms the fact that the restructuring effort that we carried out in 2006 are beginning to payoff. It's been a very good quarter from the revenue standpoint and if you look at page... slide number 5 which deals with the reconciliation of trading profit from 2006 to 2007. Obviously, the biggest gains has been achieved by the Automobile sector, which is up by €113 million year-over-year, but all the other sectors have done significant gains €75 million CNH, €61 million in Iveco and even the components and the components business were up €41 million year-over-year. So, we are now close to €1 billion in operating profit for the second quarter of 2007. The other significant thing is that although there was a high degree of skepticism associated with our ability to turn Maserati around, Maserati have a great quarter and it broke trend of starting in 1993 when Fiat bought Maserati. Maserati has been constantly losing money in this Group. It actually made money for the first time in Q2 and in terms to close the year on a positive note. We will see more about this as we talk about volumes going forward in the business. Slide 6, highest volumes since Q2 2001, margins are now at 2.8%, certainly within... probably within the range that we set for ourselves for the year, 2.1 to 2.9. Performance went well both in passenger cars and light commercial vehicles. Brazil continues to be strong, market share is up almost a percentage point year-over-year and Fiagra [ph], our Brazilian operation continues to be the market leader in Brazil. On a comparable basis, revenues are up 15% and if you move to slide 7 let me try and explain some of you had some expectations about the car business doing about €220 million for the quarter. If you look at this chart in detail, we have mentioned this I think in other occasion and certainly if I mention... comments about being publicly about the impact of a strike in our... one of our suppliers in our Pontinianga [ph] plant, which manufactures on for a month. The net impact for the quarter of that strike on production and lost sales is roughly €33 million, it used to be in excessive of 50 million at the time which had have happened, we have recovered roughly a third of that loss, we expect to recover most of it by the end a year, but it dipped in line due to the Q2 results to the tune of €33 million. If you were to correct for an impact, we would have posted roughly €226 million worth of trading profit, totally inline with the expectation that we have in the marketplace. We continue to improve obviously, as a result of volume gains right across the operational levers. Price and mix is up mainly because of the impact of the introduction of the Bravo and the introduction of light commercial vehicles that is scooter. We have been able to fully contain the impact of increased prices on the supplier side, actually we gained roughly €44 million for the quarter, and we continue to over invest in the repositioning of these brands and on product launches. And as you can see, the numbers roughly €55 million for the quarter compared to last year. This includes a launch cost for the Bravo and all the efforts that are running continue to grow in terms of the repositioning of the brands. These are not one-off cost, we do expect to continue to over invest going forward, to ensure that we support the development of the product portfolio for the Group and then we support the achievement of the volume aspirations that we set out in our plan back in November of last year. We move on to slide number 8 and one of the thing that has been historically, I think in the Group has been the quality of the network coverage that we have. We brought 160 dealer appoints had been made in the first half for this year, I am sure half of them has come for competitive ranks. We continue to fill those network gaps and we are replacing the performing leaders. I think, we fully... we are expecting the most of them a significant work for this network. De-ramp of course, it is going to be completed by 2008. And 500 new sales people have been hired by our network in the first half of this year and the most significant thing is that due to profitability increase, there is increased initiative started this turnaround in the Italian market, it's beginning to work, it's ready for U.K., Belgium, Netherlands, Portugal and Poland. I will talk more about this again but I think we started a significant repositioning of the brand in U.K. We now have the result at the end of H1 that says all dealers in U.K all Alfa deals [ph] in U.K are profitable and I think they are beginning to change the perception associated with some of the historical mishaps associated with Alfa. We are going to begin this process now in Germany and in H2, we are already rolling out in France and in Switzerland within the next 180 days. I think we are expecting significant benefits to be associated with the position, repositioning of the brand especially in view of the launch of the new Cinquecento car in the first half of 2008. If we move on to slide number 9, I think that some of you or most of you have followed the launch of [indiscernible]. It has been an outstanding success in terms of the launch. It has provided... I think the key elements of the reformulation of the DNA of the Fiat brand I think it is going to provide significant support for the development of the product range and distribution policies of this going forward. And we already have Cinquecento 50,000 to 70,000 orders in-house; as you may know the production volumes slated for this vehicle is about a 120,000. We've already executed de-bottlenecking of some plant capacity in our Polish brand, we are capable... hopefully, after the summer break to get to 140,000. Therefore, we are looking of ways to try and expand capacity of the train going forward, although I think the maintenance of the Panda and the Cinquecento but the other would... we start off the production of the fourth car in 2008 is going to make any significant increases in production capacity of Cinquecento limited. But I think we are looking at ways to try and bring more cars out, Cinquecento had incredibly positive response for the car not just in the Italian market but through out Europe. And as you all know, this is the first car that we launched which is Euro 5 compliant. We are waiting to assess from EuroNcap in terms of how we starts the car at yet but our expectations is that there will be a double score 5, which is the maximum of its amount. We move on to slide number 10. A few seconds about the Bravo, it's progressing well. 55,000 orders, we saw 42,000 cars in for launch. The product mix is with experienced with the [indiscernible] the timing at which we launched the car in September of '05. That makes us quite better than we originally expected, but we are expecting the introduction of the Turbo and the T-jet engines, which we've done in June to have a significant impact on volumes going forward. So we are conforming the 120,000 volumes that we had for the car we continue to find ways to grow additional market coverage. I think we should feel comfortable that the investment that we made in this C-segment [ph] car has been down and its going to reverse. They are off of the unpleasant trend that is established by Fiat for dispute [ph] of back in 2001. Our luxury brands on page 11, Ferrari continues to do well, as you all know it's not a business... it's a business that we manage in terms of volumes and volumes are up 11% year-over-year. So we have full order books for the full range of the F430, from the Hard Top to the Spider to the... and including the Fiorano, the 599 which is completely sold out in the U.S. probably for the next 24 months. We continue to see very strong demand for the products. The picture that you see on the slide is the car that will be unveiled at the Frankfurt auto show, it's the new F430 Scuderia which is the fastest version of the 430 that would be available at that time. Maserati has completed it's turnaround, we have a significant order book. The new 130 [ph] model was launched and presented in Geneva in the beginning of this year. I think that the indications are that this business is now finally turned a corner, again we need to find ways in which we can keep on maintaining these volumes. We are expecting to have about 7000 cars sold within 2007 and we continue to find ways in which to work for ways in which we can expand the product offering by associating at least some of the volumes with the volumes for the Alfa brand. On page 12, I mentioned in my opening remarks that this was probably the most significant accomplishment in my view of this Group in the last four quarters. And I've talked earlier in the past about the fact that this effort is unbundling the brands certainly within CNH was expected to give us significant results in terms of market share gains and tractions for the brands in the market, we've been able to accomplish this. You can see a number of product launches on page 12 that were carried out in Q2 and this is a business that keeps on rejuvenating its product portfolio pretty consistently. Some of these volumes will not be... some of the references may not be important, but we keep on investing in both the engine compliance side of tractors and construction equipment in terms of assuring that we modernize those vehicles to comply those current market requirements. Having said all this, it is a business which is not the four brands are firmly positioned in the marketplace. We are up... revenues were up 16.3%. Year-over-year now we're seeing a very slow market in North America as it relates to construction equipment. And if you move on to page 13, you can see the profit reconciliation went from '06 to '07 from €273 million, most of which is driven by volume and by mix. There's a piece of this chart that deals with [indiscernible] warranty and other costs have been coming down which is reflective of the commitment that the science has made in terms of the quality of the productions that were coming out of CNH in the past. The most significant story about CNH is visible on page 14. The figure is broken down into two parts, the left side of the chart deals with the agricultural equipment market. And as you can see, it's been up with exceptional less than 40 horsepower tractors, it's up consistently across most regions of the world, a lot of this is being driven by the increase in commodity prices, which have a variety of regions especially in the Northern American. Northern American and North America markets has been driven by the increase reliance on biofuels, but in those areas both the... and tractors were up, we have been able to achieve significant market share gains both in tractors and combines and most specifically in combines, where I think we have actually need a quantum need in terms of market share returnship. We are beginning to see numbers which hopefully in the short while will establish CNH as the market leader in the agri comp and I am saying this will all modesty knowing pretty well that the market continues to be highly competitive, but I think we do not speak on the ground to try and push [indiscernible] international harvester. And New Holland [indiscernible] has been the premier supplier for the agri industry. Construction equipment is more of a mix big. North America has been weak in the second quarter consistent with first quarter performance. A lot of this is driven by the weakness of [indiscernible] starts in the U.S. We have been able to compensate for that weakness by strong markets both from Northern American and Western Europe where our brands have achieved significant market share and gains. I think the issue there has concerned us and I will come back to this in a moment. We actually have had some supply constraints in Q2, we have not been able to ship out all things that we will require some of which is dependent on the inability of some of our suppliers to keep pace with our demand. We're dealing with this issue aggressively, I'll deal with this in my remarks at the end. If you move to slide 15, I think visually you can see the significance of shift that has been achieved. We make more money in Q2 of '07 with CNH than we made in any one year before 2006 with CNH. And I think it is, I'll tell you, of all the things that we have done has provided a significant shift on performance we made over a dollar, this is our approximate using U.S. GAAP, but the fact that we made more money in one quarter that we made in any one year in the past with the exception of the last year. It's significant and something that we need to build on to try and drive the business forward inline with the expectations that we set up back in November of last year. The other business has performed really well, those trucks page 16, we've had good volume increases both... in terms of top line, we have the most significant part of the development this business the fact that we have been able to gain share in the medium and the heavy end of the market which has been the weak point of Iveco historically. The launch of Stralis has been a great success and we're beginning to see significant market share gains in these sectors and the resulting impact of that market share gain is our ability to extract better pricing for... where we consider to be highly competitive models in the marketplace. We have taken margins up to 7.8%, overall market share has relatively constant with slight decrease in market share at the light end of the spectrum, most of which has been down to preserve pricing. But the important thing is that with medium and heavy trucks are up and up significantly and this is evident from page 17, where the impact of volume and mix is the single largest driver of the profit improvement. We continue to invest in R&D which has trued up some of these gains, but the investment in R&D is absolutely crucial for the development of a new product line up which return... returning to a marketplace in 2011 and 2012. What I just said is evident on page 18 and I think that you can see the numbers of new Daily, the Stralis and the Trakker. All the product launches that Iveco has carried out in 2006 and 2007 have met with great market success. And the one that we are really pleased about of, I mentioned earlier is the market impact that belongs to the Stralis and the fact that we are gaining significant share. Page 19 deals with Powertrain technologies and as you all know there is a business that has its largest customer, Fiat group in terms of variety of factors going from automobiles to CNH to Iveco. So volumes have followed the increase in sales of our own sectors and we would look at the trading profit reconciliation at the bottom of page 19. And as we built cost efficiencies in the manufacturing side, the task goes on to the sectors and which is what they are required to do under the transport pricing agreement to handle the group. But they have been able to retain a lot of chunk of the saving as you again see in the amounts of roughly €53 million. And its big, it is big in our trading profit for the business up to €77 million from €52 million, that's almost about 50% increase over 2006 levels. Components have done well, we have no believers in the sector now, we fixed them out, made €1 million for the second quarter and both Marelli and Teksid continue to do well. We sold the business in April 2007, which accounts for the decrease in volumes for Teksid but both of them are performing well and we're relatively happy with the results of these sectors. They continue to produce adequate margins and they continue to support the Group in terms of our strategic development going forward. Slide 21 deals with reconciliation from trading profit and net result. In the interest charge line we had a gain of €69 million that relates to two equity, two stock option equity swaps and against that number, we have booked €42 million charge that relates to the premium to be charged... to be paid for the early redemption of the 2011 bond that is sitting at within CNH. And this... the reason why we call the bond is because the net percent value of the call was positive to the rules and so may have incurred a charge of €43 million. But a benefit will be visible within obviously 2011 which is going to bond with the value of our stock. Tax rate is below 30% for the quarter and we expect it to be effective in the charge for the remainder of the year. Cash flow on page 22, I'm going to try and part my way clearly if you have any specific questions now real certainly later but as we've already said we produce roughly €900 million worth of cash, we burned about €511 million by buying back shares and paying dividend. And that allow us to bring net debt down to what even certainly [indiscernible]. The forecast today is that we will be around €600 million or below by the end of this year. Slide 23 having this, we're trying to do best in to try and give you a feel for how we see the businesses in 2007. And you should probably take things as a reflection of how we see 2008 markets. I think we're quite satisfied with that they are associated with the brand repositioning and the market share gains that have resulted from that repositioning of CNH. Also Iveco has achieved a similar turnaround by repositioning itself as a medium and heavy end truck supply with Brazilian auto operations continue to work extremely well. The Fiat [indiscernible] has been a great success in terms of the launch and I think it has provided the [indiscernible] of DNA to try and drive the brand forward. Then obviously, the fact that we've been able to achieve a turnaround in Maserati although it's a small one but it is a first positive number in 14 years. What we're concerned about is the fact that there are some key components of CNH and not so at Iveco, which impact supplying. Those may cause CNH not to be able to fulfill all customer requirements. We are working heavily on this issue in terms of de-bottlenecking supplies on this issue and finding alternative sources. Some of these are technologically complex components that you will require, some time to find the replacements for but we continue to work on this to try and minimize the impact on the running aspirations of this house. Unfortunately, most of the market has gone up and supplies have been bombarded with demand from both the CNH and some of our competitors are try and meet with the increased market demand. We do see raw material prices continue to escalate, I think we've done a great job of curtailing these through purchasing synergies and the actual technical impact of our purchasing activity on the process. We expect that this number... that the number will still continue to be positive for the year. The continued weakness at U.S. market is an area of concern. I think... we see no light at the end of the tunnel for 2007, I think we are going to continue to see weak construction equipment markets in the U.S. I think this is going to be more than offset by an increasing strength of these markets outside especially in Europe and then on to America. The European car market is not a great market, you would exceptional that literally the market was down especially in big markets like France and Germany and these are areas that are key concern to us as we try and reposition the car brands and the thing that remain and is not be compared to few item that are important at least in terms of my attention the issue of Alpha and the reposition of this brand. I think we've done a it bit slowly, I think we need to be a lot more aggressive and a lot more disciplined but the language we get this premier thing. As I said we hope that we will be able to see and the positive impact of these efforts earlier than next 18 months. In the last slide on page 24 deals with guidance. We are confirming our trading profit, €2.7 billion, which is roughly a 5% trading margin for the year. Net income is going to hover between €1.6 billion and €1.8 billion, and we will have the same range back in EPS at between €1.25 and €1.30. Open... net income EPS numbers is totally consistent what we've set up as target for the beginning of this year. We do foresee a reduction in our net debt. We see it hovering at €600 million by the end of the year. I think there is a view that we may be substantially bad in this quarter, begin to weight until the end of Q3. To determine exactly how much cash can be generated by these businesses over the remainder of 2007? And obviously, we continue to work on the strategies of... on the strategy of targeted alliances. And there are number of files that have been opened and which... some of which will close within 2007. But we make no commitment in terms of numbers of timing. I think, we continue to... to have to work across all these sectors on the ability to strengthen our businesses both in terms of technology and market coverage. And hopefully, within 2007 the remainder of 2007 we will be able to see more. I have no more promise to make other than the fact that I rejoined where I started whether at the beginning. I think, it's truly... its almost at a historical quarter and the fact that we've able to generate more trading profit out of few I believe with in any time here in its first terms in indication with the strength of the investor businesses. We expect overall the strength to continue in the second half of 2007 and based on all these [indiscernible] in the market place with single region lying back but continuing into 2008. And that covers our presentation, so. Marco Auriemma - Vice President-Investor Relations: Okay, thank you. Now we are ready to start the Q&A section. Operator, could you please lead us with the first one?

Thank you. [Operator Instructions]. We will take our first question from Paolo Mosole from Intermonte. Paolo Mosole - Intermonte SIM: Good evening everybody. I have three questions if I can. And the first one is on the trading profit evolution. I would like to ask you whether there has been any impact on the Cinquecento launch cost in the quarter? And the second one I would have more information on the impact of the strike of €33 million, in which expense will you recover that €33 million in the following quarters. And the second one I have seen that the 500 of the Cinquecento... sorry have the Cinquecento orders are very strong and close to the full year target as well as the Iveco Stralis orders are very close to the full year target. Why are you so cautious on the full year target for those two very good products? And the third one on the guidance that imperatively you have given a guidance for the second half trading profit down by a quarter versus a first half trading profit. By last year they have been more or less flat first half versus second half. So, I am... what is concerning you is that the constraint in production that you mentioned the weakness of the European car market or just general concern? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: The Cinquecento, I have said marginal impact in terms of trading profits for the car business in Q2 and in fact I wouldn't blame [indiscernible] so I would ignore it for the purpose of the calculation. In fact of the strike, the reason one these are cars that have been slated for production for sale in Q2 of 2007. We are going to recover that production by other working over... by probably working overtime in our [indiscernible] plant to try and recover the volumes. And so both the absorption in the margin associated with the sale of those cars will be recovered in Q3 and Q4 of this year. The 500 orders are strong and that's why giving a sales was strongest. We are not modifying expectations. And we... as I mentioned earlier at least in the terms of Cinquecento, we are capacity constraint at least for the time being to 145,000 a year. We need to get normalized, at that level the cars still in ramp up phase and will not be fully operational in terms of operating leverage until about September... the last part of September, the early part of October. And the number of things that we have advanced [indiscernible] plan in terms of especially in terms of the printing milestone show that we have enough capacity to push for the cars. All of that will not be visible until the end of Q3, beginning of Q4. And a lesser problem exist with the Stralis, we do have the capacity if you believe in making more. I think that your comment about the fact that when you take the difference between the €2.7 billion and the €1.5 billion revenues achieved for the first time for this year, there is no impressive warning about anything, what we are saying is that we are holding on to our forecasted €2.7 billion. I will reaffirm our willingness to revisit these targets at the end of Q3. But I think that... I will understand [ph], at the end of Q3 before we make a call by the year will be, it certainly looks when you look completely, when you look what has been achieved in the first six months, we should be in a position to exceed a the €2.7 billion, I am going to do it with Q3 before I make that call. Paolo Mosole - Intermonte SIM: Okay, thanks.

And we will take our next question from Max Warburton from UBS. Max Warburton - UBS: Yes. Good afternoon. Just two questions from my side please. First of all on Bravo, company which is quite helpful with it's guidance on this product earlier this year talking about an official target of a 120,000 units but saying that things going well volumes could be substantially better than that. Could you just help us understand how you are feeling about maybe some of those high projections, is it looking less likely that Bravo is going to do the 180,000 number that was being banded around I apologize that it was actually given by Fiat management certainly the press are talking about 180,000. Is it more realistic to think that Bravo ultimately will come in at the bottom end of range near the 120,000 you are talking about today, that's question number one. And my question two, just on CNH obviously we are seeing some great progress on the agricultural side and on the construction side margins coming off. That's a little bit more than we would have thought given the revenue line and the question really on CNH is do you feel construction equipment margins have bottomed and that there are some opportunities to take some actions particularly in the U.S. where the weakness was in Q2 to ensure construction margins don't get any worse, that's the question on CNH. Thanks. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Let me answer it backward. Well, I think that we have seen we are probably are sitting at the bottom of the construction equivalent market cycle. I mean it... I don't see that we'll see here recovering U.S. construction spend in Q3 and Q4. And it is based on our read today and is based on our understanding of the auto going forward. One of our big competitors released numbers last Thursday, which I think the market may not have been pleased with based on what I have been able to tell. But I think its reflective of the production pressure in the U.S. because of the lack of volumes. The significant thing about... and soy having a definite soft in the North American soybean, we have put a number of measures in place to ensure that we can claim the margin degradation associated with the construction equipment which as expected began from Q2 of this year. But it's mainly been U.S. because we have been able to hold our margins well and we've been able to get good penetrations outside of North America. I think we have seen the bottom of those pricing... of those pricing squeeze, I think that we'll continue to bump along here around these levels for the rest of 2007. In my expectations we will see a rebound over gradual on 2008. The ag equipment market continues to be strong as I said earlier, I think that our indications are especially in view of the margin pressures [ph] and the impact of those revenues we'll have on farmers at the end of the season. There will be a significant boost in the Q4 '07 or Q1 of '08. So I think we're confident that both the remainder of 2007 and the early part of 2008 will continue to be strong margin, strong volumes and strong margin quarters. In terms of the Bravo itself, I never mentioned how they are working [ph] I think it's reflective of the kind of problems[ph] that are associated with these forecasts. I think if I told you that I was one in ecstatic rules, the degree of penetration of the Bravo in the European market, so it maybe a slight stretch. I think that we have the cars that have been valuable and ranked quite highly in terms of the C-segment. It has one into some geographical difficulties, which we don't quite understand. The market is not done as well as it should have been. We got that issue on the table under examination. We need to understand that this is a market which is contracted in 2007 versus 2006 overall. And so the introduction of these cars is especially in the segment which is not a typical area of success where Fiat would have been significantly better. I think we would have seen higher numbers had the market been up year-over-year. Having said all this, I still confirm the commitment of over 120,000 vehicles a year. And I will not, at least as of today rate that target without getting future confirmation of the ability of the car to penetrate the market upside. I think it remains a key issue for us and we continue to work on this. Having said this, the car provided more than adequate returns of 120,000 vehicles a year and I think it continue to support the view going forward. I'm thrilled; we see a more significant penetration than we've seen so far. Max Warburton - UBS: Can I just ask a quick follow-up question Marchionne [ph], thanks for such a straight forward answer. When we met in November, there was a bit of discussion about alternative body styles on the Bravo and whether or not there will be need for them. Could I just ask, if the car continues to face a few headwinds, would Fiat be able to relatively quickly offer alternative body style or do what we sometimes see other companies do and reposition component pricing on the vehicle transfigure out to get the volumes going? Thanks. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: The answer is a lot easier on the first point although I think we're going to be very reluctant to move pricing and content on the vehicle. I think the price from the content, the pricing standpoint is quite competitive against the run away competitive class and I think we watched this all the time. The car is not being sold at a premium against any of the competitions, so there is not going to be the drawback to the car being bought. In terms of our ability to develop alternative body styles to the C-segment car, the answer is that we can do it, I am unconvinced today that the economic will support an additional body style that vehicle, until we see better indication on how the fiber will do in the marketplace. But the plans are here, we do have models and we do have the action plan that we will be able to give us alternative body model within fifteen months. Having said this, I think today I am not going to make that commitment, I am feeling like better understanding as to what is causing the fix. Max Warburton - UBS: Thanks very much.

We will now take our question from Adam Jonas from Morgan Stanley. Adam Jonas - Morgan Stanley & Co. International Ltd.: Thanks and good evening. Just a couple of questions; first; were there any real estate gain in Fiat Auto in the second quarter and the reason why I asked that..? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: No. No! Adam Jonas - Morgan Stanley & Co. International Ltd.: That's fine. I only asked because there was partial recognition in Q1 you said that there be some later in the year? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: The deal has not closed, there is nothing. Adam Jonas - Morgan Stanley & Co. International Ltd.: So anything do you expect then in the second half? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: The answer is yes, until the close as I say nothing, right. Adam Jonas - Morgan Stanley & Co. International Ltd.: Fair enough, fair enough. Warranty costs, you showed a bit of detail on Iveco how warranty costs was improving. What about on the Auto side, can you isolate or try to qualify how much lower warranty positioning might have helped as we kind of see the quality of the vehicles on the lines start to improve. What kind of flexibility you had to perhaps to provision as to recognize the better quality of vehicle and how much is that helped profit year-on-year? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: It hasn't helped in Q2, I think we need to look at this discussion at the end of Q4 this year and look for those as a full year. Adam Jonas - Morgan Stanley & Co. International Ltd.: Okay. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I still think we will be improving billing the share provisioning; I would like to see the end of the year. Adam Jonas - Morgan Stanley & Co. International Ltd.: Understood. And finally just on the Ferrari options, in the Ferrari annual reports has historically outlined the option plan for the year. The Chairman of Ferrari, the management of the Group and some for the employees of the Group had outlined specifically how must of those were exerciseable depending on the listing of the business in the stock market by December 31, 2010. Has there been any change to that set up in the last few quarters or over in recent periods or is your understanding of how those options are set up and tied to public listing of Ferrari, is that completely unchanged as it has been previously written in your literature of Ferrari? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I think you have said it's another Chairman or the Managing Director of Ferrari today have options which are exerciseable. Other vendors, I think there is a peaceful [ph] for the Chairman which is exerciseable going forward. There maybe some employees who are still entitled to options under that plan, we have absolute no intension on this to Ferrari. We got things [ph] these options will die a natural death. Adam Jonas - Morgan Stanley & Co. International Ltd.: On that note, thanks very much.

We will now take our next question from [Indiscernible] from Credit Suisse.

Thanks a lot. I have got one correction in Mr. Marchionne, you haven't mentioned regulation as a concern on your slides. And so my question would be what's your take on the outcome of the European Commission's effort to reduce CO2. So if the Commission would install CO2 limits, would you then expect a) a fixed industry target of lets say 130 gram or instead of that targets by segments like a make size or weight or whatever. And if b) is the case, like more segmentation limit then what impact would you see from mass makers especially like Fiat and would also have to probably significantly bring down CO2 moving forward? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I am not going give you that... I am going to give you the official answers as with [indiscernible]. I cannot give you my view on those which we are trying not to make them contradictory. I think the view of the industry over the 130 by 2012 was not an achievable target. I think we have been absolutely clear on this issue, we continue to reiterate the view that the findings of CARS 21 which were signed during the December of 2005 is the only basis on which regulations for the automotive industry are to be formulated and as a result of CARS 21 there is a very clear recognition that the undertaking in terms of reduction of emissions should be... is something that should be shared amongst all stakeholders including people that provide other parts to the automobile sectors such as people who provide roads, the enforcement of traffic laws, and on the field industry itself and therefore, we think the achievement of over 130 rounds of which relied purely on technology or of the automotive sector is not viable. We have stated publicly that we think that the industry can get to 135 grams by 2015. I think in order to get there; there must be an agreement amongst car manufacturers. As to how that burden will be allocated amongst the various car makers; that view is in the process of being formulated amongst my colleagues at [indiscernible] and there is no... and therefore I cannot comment as to what the ultimate allocation scheme were in panel. The answers of the CO fuel I think we have made the commitment publicly and so in connection of the long-term Cinquecento. The Fiat by 2012 will run a fleet of cars which will have the lowest emission, the lowest CO2 emission levels of any car manufacturer based in Europe. I can only tell you that I think that the distribution of the burden which will place and in order amount of obligations, a small car manufacturers is by definition of... it's unfair because it is not reflected on the pricing the vehicles and I think that the small car manufacturer which mainly are of our size in French have already done a significant amount of introductory reduction of CO2. I don't want to enter into the amounts of what the equitable lower validity of the business going through indeed, ultimately... is going to be ultimately agreed amongst the car manufacturers. But, it is fair to say that the suggestions that you have made are not one that Fiat will favor.

And if I make one additional thing, it just in terms of logic. I mean wouldn't it be... I mean in order to bring down CO2 emissions in Europe, the Commission would have to enforce the mass makers to bring down CO2 regardless of its fair or not on margins or profitability. But that would be the key motive to reduce CO2, wouldn't it? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: It sounds like... I am not trying to be extensive biased in my response, but the tone of your question as well as a very heavy tectonic slant and I've had that conversation with my German colleagues and I do not find the argument at all convincing. It seems to me that the position on economics are shifting a burden of CO2 reductions on small car manufacturers does not reflect the economic reality associated with margin generations in the sale of cars, and the reality is that one. And then maybe a political reality let's say in order to get there, we need to get to the small car manufacturers and at the end of that argument we want to looks to the profitability and the ability to bring about change. And I feel almost no sympathy for anybody who manufactures 8-cylinders cars who suggests that the burden not to be shared with a guy who makes a diesel engine of the four cylinder [ph]. These are not including transformation vehicles. And the pricing associated with them in the marketplace are structurally different. There are some people who can bear the cost and some people that can't. It's no use looking at the small brand and he asks me to foot the bill, it won't worth. And Fiat won't.

Okay. Thanks a lot.

We'll now take our next question from Thierry Huon from Exane. Thierry Huon - Exane BNP Paribas: Hi. Yes, good evening. It's Thierry Huon speaking from Exane. I have a couple of questions. The first one relates to the raw material prices. You mentioned during your presentation that you managed quite well to limit this impact, but don't you fear that things have set is now in a much better shape than your main suppliers will be probably bit more reluctant to your good price on raw material price and components? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I would expect a totally, completely, it's a very different response from one of our suppliers, to the extend that we continue to feed them volumes and increasing volumes quarter-over-quarter. I would expect it to be not more cooperative on pricing that it has been so far. Thierry Huon - Exane BNP Paribas: Okay. That's clear. And the second question regarding the construction equipment. So, I am little bit surprised to see the CE margin going down that much during the second quarter since you had also some volumes drops in the U.S. Is that mean that your flexibility that's so limited that you cannot be able to prices this up in the U.S. demand or is there any specific reason to have this drop in the second quarter? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Well, the bottom line answer is right. The U.S. market for especial vehicles brand which is larger of the two infrastructure, is so heavy that it's bound to bias any calculation on margins. The only way to remedy to the symptoms of performance of the business going forward is that they need to reestablish some geographical equilibrium in the distribution of the revenues. I think a huge amount of work has already been done between '06 and first half of '07 as we reposition, bringing the whole brand in Europe and there is good work that is going on in Latin America not try anybody out but we need to rush them the dependence on U.S. market in order to bring about the margin Australasian in the absence of the pick up in the other sides of market. Having said all these, I think we still have to have some production issues associated with construction equipment side which have impacted our margins. But I think it is an issue that is understood and it's under control and it is my expectation that we will see a gradually recovering market margins over the reminder of '07. Thierry Huon - Exane BNP Paribas: Okay. And then maybe a last question about how do business in... in the U.S you mentioned that since curbs price remains quite high, do you expect some increasing demand by the end of the year, but this business remains very cyclical one and I guess that even this summer have higher revenues that will not change tractor or a combined every year just for the sake of it? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: It is... there is a structure which I... although I run into difficulty with trying some of the choice to define a cycle on the Ag side. I mean I think the other... the way this year that we had is downcycle on the Ag business we always have gained on the 90's in the year 2000 and 2001. But we certainly have exceed the normal cycle time for the Ag business, I think there have been some things that have gone on in this industry which are structural and which were not clearly associated with previous cycle. The introduction of biofuels I think has changed the economic of this business. I think I am actually a lot more confident now about the longevity of the cycle going forward than I have been for a long period of time. I don' feel this as impacting '07 or '08 and I do think that these business are continuing to perform strongly. The thing that remains to be unexploited and it certainly not... it is not well exploited is the CNH. Basically the draws of transact business outside of Europe, North America and Latin America, I think it is not going to [Technical difficulty] organization in place, which is... has as a very clear mandate, the ability to penetrate markets which are non-traditional to CNH in which we've had good activity in the past of which... while we think that there is unexploited opportunity for the positioning for the brands. The argument that you have raised about the fact that the farmers will not change their tractors or frequencies and something which appears for all the bit of shades but not every body doesn't I think that there has been also a fundamental shift in the way these files have been run, I think the economics are driving these farms are not more than they have in the past. Issues associated with productivity and the size of the equipment that are being used is become a key determinant of buying patterns. And I think that given that I think that KISH are particular in the U.S. it is an incredible well positioned to benefit from the increasing demand on heavy horse power machinery brought from the combine side in the tractors. Thierry Huon - Exane BNP Paribas: Have a final one if I may. With regard to the truck business you mentioned in the previous circle from scores that you may consider doing some thing in the U.S on the truck side. Could you share with us where you are in this process? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I think... I confirm our interest in being in the U.S I think we need to be cautious on how we get this done. I think we have made some progress in terms of looking at potential alternatives in terms of the presentation around our Iveco technology in the U.S market. I still think it is if Fiat to be able to call it. But my expectation is that we will have some thing done in the very next 6 months to 9 months. Thierry Huon - Exane BNP Paribas: Okay. Thank you.

We will take our next question from John Buckland from MS Global. John Buckland - Man Securities: Good afternoon. Thanks very much. On the presentation, I think one of the last slides talked about the challenge for alliances and provision for to emerging market, when you look at your long term targets for growth clearly China, India, Russia, Turkey are big part of that growth and some of those markets you still haven't really established joint ventures of the agreements, the networks seam to deliver that growth. I wonder if you could just talk about where you are in negotiations to have some more important joint ventures established? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I think that... I feel a lot more comfortable what's going on in Turkey and India, I think they have got the framework to try and develop the business is certainly in accordance with the plans going in the one aspiration that we've indicated. So I am... we will build our areas where both together of the long journey of the relationship in the case of Turkey and because all the ability to find a suitable partner such as, Taipei and India. We've already closed the gap... the timing gap between sort of intent and actually we're putting in place a number. Our initial results which are beginning to bear fruits, we are beginning to produce cars in India in accordance with the plan. Actually I am more comfortable that we are moving in right direction in China. China remains a key issue for us only for the cars. I think that we have done good work with trucks and then engines I think we have got good relationships with site. I don't know were there any issue in terms of the production of commercial vehicles. We'll remain absolutely aware in our resolve as of today, in the future of car business. I have been... probably from the fact that I was not satisfied with the arrangements that we have established with any of seeing or in terms of the production of Fiat cars. We continue to work with our partners trying to find a solution, I am not overtly confident that we'll be able to... at least on the parallel basis begin to develop those businesses in China in a meaningful way, in a relatively short period of time. I think parallel is something that I'll still want to be able to complete the discussions over having the Chinese current partners or potential partners and be able to announce something as quickly as possible right. I am not in a position today and although I think it was for us to change the objectives for 2010 and because all we expect to do in those areas and I do hope that we will be to provide some clarity about the identity of the partners going forward by the end of this year. John Buckland - Man Securities: From Russia? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Russia is a business where we already have a relationship with the Severstal Auto. I think that we do see them as being... given the point as we have announced another joint venture in terms of manufacture of subsidiaries we will announce in Q2 of this year. And the other market that we are watching with care with interest -- John Buckland - Man Securities: Then you need something more, as substantial to me it's 130,000 unit figure for... by 2010 in Russia for Fiat Delta? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: The answer is no. I think that we can probably work within the structure, especially before we can make the commitment with our funds try and develop the enrollment. The more significant issue in Russia I think is the fate of the... is the state of the automotive industry. Those inherited post 1991, in the full market, I think but as ancillary continues to remain and evolved, Fiat could be also the enrollment to claim reshaping or restructuring exercise. So our alternatives are elsewhere. I think that the service-out options probably the most intelligent option for us to go forward simply because of the fact, that it started from the credential of those in production going forward. I will be very, very reluctant to open discussions with the current automobile manufacturer in Russia, which... who didn't tell us inheriting legacy issues which we could not clear. So I think we need to work within the structure. I think we'll do more, but I think we are going to be patient about the skidders. I think there could be some very negative repercussions of getting paid [ph] with. The deal with the Passenger is not... there is not... there is non-accrual of clear advance to more... it was poor in terms of the technology. I think our relationship was satisfying, until some of our... are such that it would allow us to become technologically efficient block and equip them for longer term. I think the initiative that we started was serviced and already they are spending. I think you can do more with them in terms of moving the business forward but, and that opportunity is on the table and we are looking at this. Well we prefer to wait until we finish the discussions, we won't be able to taken any further... I don't know to the extent. John Buckland - Man Securities: Okay, thank you. Just one clarification on the ag side; I wasn't until... I went through and I looked if there was any replay of CNH yesterday. And one of the issues which seems to, one of the issues that we talked about was the change in auto part for loans and I was wondering if you could explain that what it means or demand. I mean is it the demand is being boosted by in the short-term because people have not had to pay the loans and future terms will be tougher? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: No, I think that the registration in Brazil is trying to be a legacy issues associated with purchases that were made in the past and the current outstanding on them. I think one of the things that we have done as it we have managed the position quite prudently. I think one of the things that we consistently worry about is recurring value of collateral against those positions and I think, we need adequate reserves and we continue to make them, to ensure that we continue to prepare to give any credentials in terms of residual line associated with these loans. I think that the agricultural policy in Brazil is one which is designed to encourage the ag business. I think it is being done with a variety of ways, I think that the registration, I have looked for the comments here by and asking me in terms of the alternatives that are going forward, in terms of making payments already for 40% payment later on. I am not thinking the impact on the... I don't think there is anything here artificially boosting demand. And then all this has to do with the fact that one of the things that was going in favor of ag business in Brazil was the relatively weakness of the local currency against U.S dollar, the position is completely flipped in the last 18 months. And so, the demand that were satisfying in terms of the equipment is clearly justifying the local usage of the equipment for a local utilization, it's not the export side, this is relatively weak. Rather that it should correct and the impact of an industry going forward is clear to me. But I think that if the U.S. dollar were restrengthen against the Brazilian currency, I think we will see an addition of boosted demand. I... we have a little bit in those and we have seen which ... we have seen the language, the market is reacting. It gives us not an artificial bump. I think that there is a structural change in which the Brazilian ag industry has been shaped. I think we are just satisfying the natural consequences of early shaking, I don't think there is anything associated with this and whatever the Brazilian government was doing in terms of the funding monetary and the funding which is consistent with past history. John Buckland - Man Securities: Okay, great. Thank you very much.

We will now take our next question from Andrew Lobbenberg from ABN AMRO. Andrew Lobbenberg - ABN AMRO Equities Ltd.: Hi, it's Andrew from ABN here. Can you talk a little bit about the dollar and whether or the extent to which that effects the profitability of Ferrari and Maserati? And also whether that dollar position affects your thinking on taking the Alfa brand to the U.S. and then one just final question, with your concerns about the reposition of the Alfa brand does satisfy your thinking about relaunch of Fiat Lancia in Northern Europe? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Let me deal with the Alfa side, this U.S. dollar issue at best if it was going to be permanent, it will simply suggest that at some point in time between now... and there is some point in time in the overhauling of the brand we have to find for... we'll have to find the local production solution to the Alfa brand and it's true by the way that I think for successfully repositioning outside U.S. And we have to follow inline with both BMW, Mercedes all brand orders which is establish local production side. I think we are way too early to make that call. I'd be clear on the front that the group is willing to fund. The initial start up losses will go in production and we maybe to pick these four years so we breakeven both on cash and earnings basis before we can start seeing some results from the U.S. Having said all this, I think we need to be in the U.S. market simply because in the medium to long-term it is too large a market to ignore and certainly offers us a tremendous potential. In terms of the position debottleneck, we continue, I think it's false here to cover hedges on a 12-month volume basis, I am looking at my treasure here already for both Ferrari and Maserati. But it will in terms for transport cover for Ferrari but it does extend beyond 12 months. We have taken position to cover earnings for 2007 for sure, and for part of 2008, certainly in the case of Ferrari and to a lesser extent in the case of Maserati. Having said all this, I actually think both of those brands have the pricing power which was beyond the fact that we have considered already. And it's not good news for Ferrari borrowing the U.S. platter but Ferrari would protect margins first. Andrew Lobbenberg - ABN AMRO Equities Ltd.: That's fine. And can I ask about the Lancia and the delay in repositioning the Alfa brand? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: No. Which, the Lancia? Andrew Lobbenberg - ABN AMRO Equities Ltd.: Yes, it was just for in some repositioning Alfa. Do you have any concerns about rolling Lancia in -- Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: No, I think the Lancia story is always a much easier story, because I think our ability to leverage Alfa technology of Fiat is in much, much more exhaustive. Alfa Romeo's got a different induction, and it's got a different class of competitors compared to Fiat and potentially to Lancia. And I think the commitment of this group needs to meet technologically to Alfa. It's of a different caliber and a different depths and the commitment that we need to make the both Fiat and to Lancia. So, the discussion now on Alfa Romeo is Alfa Romeo specific. But we have one more relevant in terms of what we are doing and then I won't go any forward than it does, in terms of that what you may consider to be natural brands of Fiat and Lancia brands. I think although we have a very few believers, I think probably outside of the fact that we can get to the 300,000 numbers of Lancia. We have seen incredible resilience of that brand; fundamentally two models and real illuminative geographical cover. I think there is new Lancia and the Alfa Romeo across European network in an effective way and we will be able to continue that with the Lancia brand in our distribution sites. I think we will get to 300,000 vehicles in Lancia, showing faster and probably the most super faster that we will get to some of the longings and up from it. Andrew Lobbenberg - ABN AMRO Equities Ltd.: Okay. It's all from me. Thank you.

We will now move to Monica Bosio from Caboto. Monica Bosio - Caboto/ Intesa Sanpaolo: Yes, good afternoon. I would ask three questions. The first one is regarding the profitability of the auto operations. If you could please give us some flavor on Brazilian auto operations profitability and then the western profitability. The second question is related to the European car market, just talking on how do you see the Italian car market in 2008 running from this should expire? Do you think that there could be soft landing? And the third question is related to the buyback plan, and how much of the buyback plan could we assume, it would be suitable within this year in percentage? Thanks. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I mean these are very good questions. Unfortunately I cannot give you answers to both of them. Let me deal with the Brazilian issue. I will not breakdown profitability by Europe and by Brazil. Nevertheless I will tell you that the operations takes Brazil, earnings positive and then comparing to the earnings positive for the third quarter in a row and that's the only thing I will tell. In terms of the European car market, our expectations... I mean we have always want the projection and the assumptions that the car market will be flat to yearly. We have seen a drop in the market of almost 2% year-over-year, even by year it will... it also has contributed significantly to offset the decline in France and the Germany. And we do expect that soft landing in earnings and are including the incentives. The last... I mean our expectation here was clear, but the time will effect them as well as on both the all of our brands will be sufficiently repositioned and able to be to continue to more offering and get to the number that we have mentioned earlier which was also 75%. And turning to the share buybacks and we will... I think that we have been as public on these issues as we can be. I think we stayed on our intention to buy a maximum number of shares. I think we will continue in this activity as long as we think of these share repurchases are earning and value accretive to Fiat. But, timings of those purchases and the quantum of these purchases is left to management discussion, and we will not comment until we have done them. Monica Bosio - Caboto/ Intesa Sanpaolo: Okay, thanks.

We will now take our next question from Horst Schneider from West LB. Horst Schneider - West LB AG: Yes, good evening, Horst Schneider from West LB. My question on the Italian market has just been answered. So I have only two questions remaining, both are simple questions regarding potential M&A activity at Fiat. Firstly, we hear sometimes some noise that Fiat could be interesting buying for example one brand Ford, for example Volvo. So my question is could you may deny that you have an interest in buying any of Ford's brands? Then -- Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: It's noise. Horst Schneider - West LB AG: Okay. Then last question is on the automotive supply activity. So, we see currently here take off multiples for some automotive suppliers, increasing significantly. And in that context, it's my question, if it cold become an option for you to serve Magneti Marelli if the price was right? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I mean, I am always... I will give you the body line on those things. I mean I have always try to give a Marelli especially in this, and the turnaround fee for Fiat is an integral part of our activities and we continue to rely on them to provide the right level of technological support in terms of repositioning of the brand and the contents of the products that we are issuing forward. I have also bring... probably trying to say that of all the activities of Seina is really is the one... on February 2, but it's not the main business of Fiat group. I am making no promise that we would ever entertain a proposal of some R&D. We have declined all offers or interests from potential purchases that continues to be... it continues to be our view. This business is not for sale. But I think it would be unreasonable. To suggest that if were it considered to be an extremely attractive offer were to be made that Fiat will not by definition look at it. I think we will be forced to, and it will not inside the offers. Horst Schneider - West LB AG: Okay. Thank you.

We will now move to Martino De Ambroggi from the Euromobiliare. Martino De Ambroggi - Euromobiliare SIM S.p.A: Yes. Good afternoon to everybody. Is there any specific reason that you are confirming your critical counselors target represented during last business plan presentation. Despite of the much stronger sales, always referring to the indication you gave during the business plan presentation. And on a local, I didn't see, that's probably, that's my hold but do you see an indication on the order backlog that you used to provide? I don't know if it's possible to have it. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Yes. The order backlog is up year-over-year. I looked at it this morning. So, there has been a significant recovery from Q2 versus Q1. And I think that in terms of the volume expirations, I mentioned earlier that we will not go back and revisit any numbers until the end of Q3. But I think it's reasonable to assume based on what we've been to do so far. It's kind of the numbers that we have talked about in the business plan, are probably easily achievable and nourished from revised targets, but we will wait until the end of Q3 Martino De Ambroggi - Euromobiliare SIM S.p.A: Okay and moving on that, I understand you will give an update after Q2 but my comment is that your guidance for the full year doesn't seem coherent with the usual strong free cash flow, you have in the last quarter. And in case can you come out -- Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: well below six. Martino De Ambroggi - Euromobiliare SIM S.p.A: Okay. But can you give us an idea? I am just curious what can be the contribution of CNH in your €600 million guidance? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: In terms of the debt level. Martino De Ambroggi - Euromobiliare SIM S.p.A: Yes. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I think it is fair to say that overall the CNH business will continue to generate international event. So in the first six months of this year and we expect it to contribute to generate cash in the next six months. One of the things that we've done at CNH is that we have build up an increased level of consciousness to the level of calling it paranoia but there is not to retail so that's why generating the business and that has triggered, I think in these a large reason as to why we have been able to generate cash in a strong way as we have done in Q2. I don't... I think that CNH will continue... any way I will got to be careful... I think that CNH will continue to be debt free during the year 2007. I mean at the end of Q2. I am not giving you as the purchase continues. Martino De Ambroggi - Euromobiliare SIM S.p.A: Okay. Thank you.

We will now move to Philippe Houchois from J.P Morgan. Philippe Houchois - J.P Morgan: Yes good afternoon two questions please. One is I understand the share buy back you don't want to discuss in more detail but you have stop buying shares are the things you haven't brought any since the early part of June at this stage could you tell us whether the rating agencies provide I mean any kind of restriction on your ability to buying back shares or if you were any three what time that you are free to spend that budget which is still kind of constraint to I think your pure investment grade ratings. And the other question I had on the profitability of shared auto in Europe and industry in general. I mean historically generally as car makers have played a kind of real some game across Europe, are your profits at this stage of jet auto coming at the expense of your peers in the industry or do you see an uplift in industry profitability on the back of the pretty decreased structure that we are seeing across the opinion or industry. So is there a kind of upside to our usual view of some game in general as car manufacturing? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: Your last question. I wish I knew to complete answering I can don't want to give you part of it is instinctive. I think there is been a huge amount of work done by the industry in terms of reshaping the cost structure. There is always more brand as it is benefit associated with all the those works been done on comparative and by Fiat in reshaping the industrial foot print of car business and our volumes giving the fact that the market has been declining for the first six month of the shares our gain in this market have to help peoples expense and there by the definition is impacting the profitability but I don't think it is termed... I think the real fun game is a different zero. And I think that people will continue understanding sense for you doing. I don't think we are talking about but it is in my location. The bigger issue to me is whether the market fell from the demand in the European market will pick up from another where you are seeing so far. If you go to restore our self's to 2006 levels in terms of volumes I think then we will all see a much more comfort. I think the nearly 2% decline in the market is been significant. I think it has been felt by most of us separate. I think the answer... if am going to answer to your question I think that we have taken margins away from other people so far. But it is margins that were not been affect as the way I think. The answer to your first question about rating; I have always discussed our share buyback policy with the rating agencies. There are not composed restrictions on our side as they can determine at any one point in time as to where there are share buy back policy is a fence as to the ratings that they were assigned to Fiat. We monitored this issues they have been at all times we have a pretty open dialog with the rating agencies above what we intend to do and the level where we have given to them of giving indication their intervention in terms of share buy backs has not caused any concern. And so in terms of the latest up grade that we have got through less in grade that is sure was discussed. But we are really not prior to just the restoration in investment grades that is to Fiat. Philippe Houchois - J.P Morgan: Okay. Thank you. If I can just squeeze in a last question that is on the there is major dropping of tax rates year-over-year, should we use the new tax rate as an indication over your cash tax level is or are going to be paying less tax then that based on the size that you should be able to utilize your tax credit to attached to your historic shed our to losses in Europe? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I think guidance of 2007 should assume most of this to be recurrence taxes. Philippe Houchois - J.P Morgan: Great. Thank you very much.

Our final question comes from Paolo Mosole from Intermonte SIM Paolo Mosole - Intermonte SIM: Hello I have just my follow up on the ... if I can you mentioned? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: You want to buy one. Paolo Mosole - Intermonte SIM: Yes sure. But that's true. But I don't know when I will have I will be able to get one. And the question is on the CapEx which you said is will be margin on to you notice increased to 140,000 but are you also considering possible increase in cost because of the wages request by that to keep plans employees? Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: I think they are all individual in this part to learn from our product cost and I don't want to comment on the fact of the wage rate increases. I think that this is part of the dialog that's going on. I think we will respond to them accordingly but I think that we will need to find and I think we have excess to ways of let me get in again potentially at a area well that range wise. But I think it's premature to call. I think we continue to work with the system to find a solution where we accommodate their interest and ours. I don't think any of these are going to impact any significantly, especially given the volume of financials. Paolo Mosole - Intermonte SIM: Okay, thank you very much. Sergio Marchionne - Chief Executive Officer, Chief Executive Officer- Fiat Group Automobiles: You very welcome. Marco Auriemma - Vice President-Investor Relations: Okay. Thank you very much for participating to the call. Of course we are available to answer any further questions you may have, as soon as we are back in the office. Bye.

That will conclude today's conference call. Thank you for your participation ladies and gentlemen.