Marco Auriemma - VP of IR Sergio Marchionne - CEO Maurizio Francescatti - Group Treasurer

Monica Bosio - Caboto/ Intesa Sanpaolo Avaneesh Acquilla - UBS Paolo Mosole - Intermonte Adam Jonas - Morgan Stanley John Buckland - MF Global Thierry Huon - Exane BNP PARIBAS Andrew Lobbenberg - ABN AMRO Philippe Houchois - JP Morgan Martino De Ambroggi - Euromobiliare

Good afternoon, ladies and gentlemen, and welcome to today’s Fiat 2007 Fourth Quarter And Full Year Results Conference Call. For your information, today’s conference is being recorded. At this time I would like to turn this call to Marco Auriemma of Fiat Investor Relations. Mr. Auriemma, please go ahead. Marco Auriemma – Vice President of Investor Relations: Thank you, Sarah. Good afternoon, and good morning to you all. Welcome to Fiat 2007 fourth quarter and full year results webcast and conference call. Sergio Marchionne, our Chief Executive and Maurizio Francescatti, the Group Treasurer will review the group’s performance last year. They will use the material you should have downloaded from our website, www.fiatgroup.com. And after that we will be available to answer all the questions you will still have. Before moving ahead let me just take care of the usual housekeeping chores. Any forward looking statement we might make during today’s call are subject to the risk and uncertainties mentioned in the Safe Harbor statement including the presentation material. So now I will turn the call over to Sergio Marchionne. Sergio Marchionne - Chief Executive Officer: Ladies and gentlemen, good afternoon. We spent last Monday in United States, problems with our plane coming back from the meeting, and it happened to be Martin Luther King’s Day in the US. And so while we were sitting there, we’re trying to find a title for the presentation today, and we stole a few lines from the speech of Martin Luther King offered to the American people on August 23rd, 1963, and we used that as the title of the presentation, it’s not meant as a sign of disrespect. But it is a recognition of the fact that for us 2007 is a fundamental cardinal year in the development of our group. We started this process back in 2004, as most of you remember, and we presented some other ambitious targets back in July of that year. And we conclude 2007 the cycle of the forecast that we presented at the time, and we can look back at the forecast and we have hit each and every one of the targets that we set and in the majority of cases we have exceeded them. And so we’re proud and we are happy with the fact that we are able to grow our top line double digits this year. All the sectors inside Fiat Group is attributed to the improvement that we are able to get operating margins well above the 5% mark. I think the thing we are most proud of is the fact that we closed the year with a net cash on hand position and it has been a long, long time since we have seen that on Fiat’s balance sheet. If you can look at page 2 of the presentation, I think it’s probably the best summary of what we have been able to do over the last three and a half years. We started off with nearly €10 billion worth of debt. We were able to monetize a number of positions including the mandatory convertible of €3 billion, the sale of our interest in Edison, in Italenergia Credit Agricole Mediobanca. All of banking that was about €7.5 billion worth of funds, and we used €1.7 billion to buy back a previously monetized position in Ferrari to pay dividends to buy back shares in excess of 400 million. But I think more importantly we generated over €13 billion Euros worth of cash in three years and we committed over €9 billion during the same period of time to growth initiatives which are at the heart of the 2008 to 2010 plan. We did all this, I think we were able to restore Fiat to financial health, but I think the main objective in this whole exercise was to lay the foundation for the next three year plan. And so, regardless of how the markets behave today or behaved yesterday, I think from an industrial standpoint, I think we need to look back at 2007 as being the conclusion of a very intense period of activity, but it is a conclusion. I think we are done with all the major issues that negatively impacted on the performance of this house. And I think that we can look at 2008 to 2010 with a completely different set of eyes knowing that we are beginning the year with a solid financial foundation but more importantly, with some very clear ideas of how to build this group into an international house and to significantly increase volumes. So if you can just move on to page 3, I think the issues of the performance of the businesses in 2007 are relatively clear. We were able to grow topline 13% for the group, and this was achieved across all the sectors. The vehicles specially had an outstanding year and most of which resulted from the repositioning of its medium and heavy end offering to the marketplace. As a result of these increases in volumes we were able to push our trading profit up by nearly two-thirds or €3.2 billion, which is €1.3 billion higher than 2006. And perhaps more importantly, well ahead of guidance that was raised at least twice during 2007. We have got margins now which are at 5.5%, and this has been the 12th consecutive quarter of year-over-year quarter improvement in earnings. So we have not missed one and obviously the commitment to 2008 is to continue to put this performance. Excluding unusuals, group net income was €2.1 billion, which is more than double the level of last year. We are proposing an aggregate dividend distribution of in excess of €0.5 billion. And as I said earlier, I think the important thing is that we have extinguished our debt position. We now have roughly €400 million of cash in the balance sheet and that’s after we have spent over €400 million in share buybacks in ’07 and we have got a liquidity position which is around €7 billion, therefore more than enough to try and deal with any maturities that may be coming up in the next two or three years. Operational highlights on page 4, obviously volume has been at the heart of our results. We have been able to achieve volumes in the automobile business which are the highest since 2000, 2.234 million units. Vehicle has successfully repositioned its business, it’s had a one-third jump, 33% jump in its heavy truck offerings. We continue to rejuvenate the product portfolio. CNH is at 20 new products, so a 100 plus upgrades and re-powering of the equipment is currently in the product offerings of CNH. 3.1 million engines, 2.1 million transmissions, all of these are at record levels for the business. And as we indicated to you, back in the fall of 2006, our objective was to create a group wide purchasing organization that could leverage the muscle of the south. We were able to close 2007 having achieved the €300 million objective in cost savings, all of which has been documented in the profit reconciliation by sector. We continue to work on those world-class manufacturing process, it’s becoming increasingly clear to us that we need to close this gap between ourselves and the competition at the speed of light. This will become evident as we talk about CNH and especially the impact that we have had as a result of manufacturing in logistical inefficiencies in the fourth quarter of ’07 with CNH which is negatively impacted on both margins and reported earnings. Very little activity in Q4 in terms of partnerships, I think most, the most significant part of all this is that finally we were able to resolve our relationship with NAC in China. And therefore we are starting 2008 with a very clear commitment to two large automotive players in China, SAIC being one for the heavy end, for the truck business, post acquisition of NAC, and in terms of production of engines and with Cherry for the production of automobiles. Side 5 only reinforces what I said in my opening remarks is this is the completion of the cycle that we outlined in Balocco. And as I said earlier, we have not missed one quarter in terms of yearly quarter over quarter improvements in both margins and in creating profits. If you would like to skip over section 6, slide 6 which deals with the fourth quarter and deal with slide 7, which represents the composition of both sales and creating profit by sector. We have had double digit topline growth for all the major businesses in the group. And obviously cars has been the most significant driver of the improvement in trading profits, but all others have improved by more than 30% year-over-year. So its been a consistent performance by all the sectors of the house. And when you look at slide 8 and you look at Fiat Group automobiles, we have hit the 2.2 million number and gone over it which was our target for the year. Revenues were up 13%, volumes were up 13%, made up of the 5% increase in Western Europe, a 32% increase in volumes in Brazil, and 16.7% increase in volumes in the rest of the world. I think that what’s clear from the slide, although we are rebuilding volumes from the lows of 2005, I think that we continue on our pretty rigorous process of rebuilding volumes in this business we have, an additional 200,000 volume increase targeted for 2008 which we are confirming as part of our 2008 prognosis. If you look at slide number 9 and you look to the composition of our shift in trading profits from ’06 to ’07, the first thing you need to realize is the subtitle says that we did improve trading profits in this business by €1.6 billion over a period of three years, and it’s been a result of continuous work on volume increases and the repositioning of the products in terms of pricing and mix. The purchasing initiative that we made reference to has obviously helped to a large extent. Obviously, the absorption has been significant, absorption benefit of fixed costs in our plans have been a significant contributor to the improvement. But consistent with our view to rebuild volumes, we have had to, and we continue to over spend traditionally year-over-year. And selling expenses which relate mainly to the development of network and key to the support from an advertising and market expense point to the products being launched. Margins are now 3% and they are well above in our heads from the low end of the margin that we indicated as being 2.1. If we move on to slide number 10, you can see a relevant market share down, I think we are able by a smidgen to replace Renault [ph], the fifth Western European supplier of automobiles. We are now at 8% market share, slightly below around 31.3% market share in Italy. And the Fiat brand which has been the biggest recipient of the product portfolio rejuvenation is the one that does, has outperformed all other competitors in the major markets. Lancia has done well, Alfa is waiting for a product rejuvenation. We are in the process of retraining our people and improving them. And therefore the main producer of the Alfa Romeo vehicles will not be in production for January and February this year which is going to impact on Q1. Volume is, we do expect, just as an aside that we will be able to make up the shortfall during the remainder of the year. But light commercial vehicles, the Fiat Professional brand had an outstanding year, with registrations up 13.4% in Western Europe and market share is now at 11.7. Brazil continues to do well as I mentioned earlier. We continue to be market leaders with 26% both in passenger cars and light commercial vehicles. And on the dealer network process, which has been one of our key objectives when we started this rejuvenation process back in 2004, we are almost a year ahead of plan, we have had 310 dealer appointments in 2007. A new partner is now accounting for 15% of the network, ex-Italy. So it’s been a significant improvement and it’s something that we expect to continue in 2008. Moving up to slide number 11, we are confirming volume targets for the Bravo 120,000 units. We just introduced a 1.6-liter engine in this vehicle in the last few days here in Turin through the European dealer network. The Croma was re-launched in the fall with a facelift. The Musa continues to be the undisputed leader in the MTV segment in the Italian market. And as part of our brand strengthening exercise, we are working outside of Italy in combining both the Lancia and the Alfa Romeo brand in terms of the repositioning both of them in the European marketplace. Fiorino was launched in 2007 with an effective market introduction in Italy in December and the rest of Europe in 2008 with a 40,000 unit target. The year has been a good year in terms of awards as you can see on page 12, I won’t go through them all. But I think it is important to recognize that the brands are getting traction. And as you can see on page 13, the launch of the 500 was done in July of last year has probably been the biggest commercial success that we have had in the last three and half years of management. We have over a 140,000 orders on hand. You can see that it was launched in UK on Monday, it’s now sitting on the London Eye, it’s now traveling under the Berlin subway. But I think the important thing is that given the completely new image to the Fiat brand and our expectations is that we will probably top the 190,000 unit a year, we’ll be coming out of 2008 at that yearly volume. Or on the average it may be less than that for the year. Our luxury auto brands on page 14 have had… both have had an outstanding year. We deal with Maserati, first Maserati was the chronic loser. It never made any money prior to the acquisition by Fiat in 1993 and it never made money under the management of Fiat since 1993. This is the first year in which it’s been positive, it’s a great commercial success with both the Quattroporte and the GranTurismo. Volumes are up nearly a third over 2006, and we expect the success to continue well into 2008. I think we have found the product range which is crucial to Maserati and the places in which we can build brand. Ferrari, there is not much to be added, I think we all know that it won both the constructors and drivers side of the Formula One but commercially they have had an outstanding year. 6,000, nearly 6,500 units sold. And full year trading profit is up nearly 50% on 2006. We move on to slide 15 and deal with CNH, which I think yesterday was unnecessarily and unjustly punished by the US markets. In terms of share price, CNH have had a phenomenal year in 2007. I think they were able to grow the top line 13%, was up 23% in US dollar terms. We have strong performances in the Ag business on a worldwide basis and we had a very strong performance in construction equipment, ex-US, which I think totally attributable to the weakness in the housing market and the construction spending, which has been in a downward spiral now through 2007, will probably continue for the first two or three quarters of 2008. Trading profit was up 34%, 47% in US dollar terms. And I think that we continued to develop the international base of CNH. We have now in the last nine months created an international division for CNH which is designed to deal with markets outside of our traditional trading regions. And so we expect the year to benefit from the increased penetration in non-traditional markets. What has plagued this business in a negative sense in the fourth quarter, especially and throughout 2007… you can see this on page 16… is the inefficiencies associated with the volume ramp ups which were… certainly came in at levels which were well beyond our expectation. I think all of our Ag plants and in some cases construction equipment plans were pushed beyond the traditional limits of what they considered to be industrially efficient levels. I think we have had some issues in terms of getting some key suppliers to follow us in that volume ramp-up and that has caused a manufacturing efficiency, inefficiencies which just in the fourth quarter totaled nearly $60 million. And so if you were to adjust for the impact of those inefficiencies, an estimated some portion of the inefficiencies worked its way through the first nine months of this year. The business was nearly… was very close to 9% target, 8.9% target that upset the double [inaudible] of its expectations. On page 17, which shows market share positioning of the various parts of CNH, we have gained market share in all the relevant markets on the Ag side. We have been able to hold positions in North America notwithstanding the decline of the construction equipment market and we have grown construction equipment elsewhere. And where we have not grown it, it has been because of the fact that we were capacity constrained. So we are walking into 2008 with a very strong order book. I think that we have gotten the organization now ready to deal with the volume ramp up that we expect for 2008. We do expect volumes to be up over 10% over 2007, and therefore we are confirming, with some delay, the achievement of the trading margin of about 9% for the year. CNH also had a number of awards. Those are slated on page 18, most of these you would not recognize, but they are significant achievements for CNH. They’ve won a number of awards both in the construction and the Ag side And I’ll skip over slide 18, 19 and 20, which indicate that kind of activity that’s going on within CNH. These are not particular [ph] awards in the sense that they are only visible and understandable by people that are related to the trade. But for us in CNH they are an indication of the quality of work that’s going on by the management team and that is effectively restored this business to a healthy level of profitability. If you look at slide 21, for example, you can see that 2007 has been the highest full year earnings per share since the merger in 1999. And therefore, and that is these numbers have been done on the basis of U.S. GAAP. But they are indicative of the shift in performance that we've seen in this business, and I think that they are at the heart of the forecast that we've laid out in the front of the markets yesterday of $3.30 to $3.60 earnings per share under U.S. GAAP for 2008. Slide 22 which deals with our trucks business. This has been the other part of the Cinderella story. I think that we had a lot of skeptical people when we presented our plan for the vehicle about our ability to penetrate the heavy end of the market against some pretty strong competition from German and other Nordic producers. I think the fact that you will see in a moment, we have had a significant improvement in the positioning of the heavy end of the offering. Volumes were up 23% over 2006 with a very good penetration in most European countries. We've had an outstanding performance in terms of trading margins coming in at 7.3%, well within the range that we have set between 7.1% and 7.9%. If you move on to slide 23, you can see the benefit associated with the volume ramp up, €216 million was due to volume and mix and the mix portion of this is important because it relates to the positioning of the Stralus and the pricing piece which obviously came along with this in terms of an improvement over 2006. The R&D piece shows an increase in spending of €57 million. This is the beginning of an investment cycle that we will complete at the end of 2011 which will entail an expenditure of over €1.2 billion for the complete redesign of the medium and heavy end offering in the marketplace including the costs associated with the introduction of Euro 6 engines which are going to be extremely cost before the industry. But I think we're getting ready for the introduction going forward. And I think we doing all the right things to try and achieve the highest level of industrial efficiency as part of the capital expenditure… capital expenditure program. If you look at 24, as you can see these are the things that have been at the heart of the revival of the vehicle in Europe and the achievement of the volumes that we've seen. We continue to work the way the rationalization of the dealer network. And I think as part of the globalization efforts of the vehicle we have now devoted significant resources both financial and in terms of people to the reestablishment of the vehicle as a significant player in Latin America. And so our market share in Latin America was up 2.1% year-over-year and 5.7% specifically in Brazil. If you turn over to slide 25, this graphically tells you in a very summary form what the accomplishments have been. At the heavy end of the offering, we're up 45% ’07 over ’06. And the order backlog is up by 120% over the prior year and market share is followed. We were able to grow market share at the heavy end by 0.5% point. We gave up some share on the light end intentionally in order to maintain pricing. That loss of share is been more than compensated by the market share gains that we had on the Fiat Professional in terms of its own offering with the Decato and the Skudo and therefore overall the group has maintained leadership in this segment in Europe and we have gained share over our competitors. If we move on to slide number 26, this is more of a commercial plug that we're launching this car in 2008. This is the equivalent of the old Campagnola used to be sold by Fiat in its heydays. It’s coming into the market, I think by the end of Q1 of 2008 and we’ll use a chassis and a body that has been worked on by vehicle together with Santana in Spain, but it will use a transmission and an engine which is made by FPT. And it will come into the marketplace within 2008 and we do expect full year sales targets to be above 3,500. I mean I’ll give you this, not because of the fact that it’s going to materially change earnings but I think it is designed to indicate the level of commitment that has been made to the rebuilding of the brands. If you look at page 27, which deals with the Powertrain business, significant volume uplift as you saw earlier. Revenues were up 13%, 12% up on engines and 24% up in transmissions. I think that when you look at the trading profit and the reconciliation. The sector is doing exactly what we've asked them to do. They keep on driving down costs as a result of came about as a result of the aggregation of all of our Powertrain activities under one head. We were able to significantly reduce unit costs which in part were passed on to our sectors, and as you can see that that represents €82 million pricing concession that was done to the group sectors as a result of the efficiencies achieved. But we were up €103 million over 2006 in trading profit, and so a significant improvement in margins though well in excess of the margins that we assess for the business back in ’06. Components on page 28 have also had a decent year. On an equivalent basis, Teksid did have an improvement in trading profit year-over-year. Marelli continues to do well on strong volume growth. And Comau now has had the second quarter, this is the fourth quarter of 2007, in the third quarter of 2007 with positive earnings indicating that the reshaping efforts that we carried out in the second half of 2006 have begun to pay off. If you move on to slide number 29, which reconciles trading profits and net result. There’s really nothing exceptional about this, but maybe we can explain this part of the financial charges. This is not just debt related financial charges. There’s roughly a €160 million of IIS 19. These are pension interest costs which are in that number, There is roughly €43 million of the costs associated with an early redemption of a CNH bond. And because of the fact that we are carrying as much liquidity as we are, which I think is strategically important and necessary, the cost of carrying that liquidity is roughly €100 million. So, although we may have ended up the year with a positive net cash number we do expect to incur financing charges as we go forward which are not necessarily in relation to any debt that we may carry. And if we can move off to slide 30, there’s not much to add unless Maurizio wants to add something on the cash flow generation. I think it’s important that we have gone from a €1 billion worth of debt to about €400 million worth of cash, in a 12 month period. Let’s turn to slide 31, which deals with our forecast for the year. I‘ve read some of the early comments that have come back in after the recent earnings and I think a lot of you have focused on the cautionary statement that we've made at the back end of the press release in relation to the 2008 outlooks. What I can tell you is that based on what we see today, there is absolutely no indication that any of the issues which are currently impacting the financial markets has had any overspill or contingent impact on to the main function of the products that we manufacture and that we sell. And this is as of today. It is very difficult I think for anybody to sit here and try to estimate as to whether that in fact will be true. There’s a large concern in the marketplace about the fact the U.S. consumer demand will diminish during 2008, as a result of this financial crisis, and that therefore, that will impact on earnings. Our exposure to U.S. consumer demand is negligible. And so based on what we know today, we do not expect that any of our sectors will be impacted by the current turmoil, and therefore we're reconfirming all of our 2008 targets obviously moving revenues up over 60 billion. We are confirming a trading profit margin. Our trading profit numbers are roughly €3.4 billion to €3.6 billion. We're confirming a net income of €2.4 billion to €2.6 billion and we're expecting to be sitting on a minimum of 1.5 billion of cash at the end of ’08 barring any additional share repurchases, which we do intend to take back to the shareholders for renewal at this next AGM. I think it will be… the other comment that I have read that has come across the wires in the last two or three hours is that some people are concerned about the fact that we have not raised guidance for 2008. This appears to be a perennial concern on the part of the analysts, I think that we are going to need to wait until the conclusion of Q1 to find out what the ultimate impact is and how this financial crisis will shake out in the market place. We remain convinced that our business will not be impacted by this process. But I think we will not touch the forecast until Q1 is completed, and so we will until then. But I think that’s our presentation. I think that the slide 33 tells you what we are going to do over the next year in terms of meetings. But I am pretty well done.

Thank you, Mr. Marchionne. Now we are ready to start the Question-and-Answer session. Sarah, please retrieve the first question. Question and Answer

Thank you. [Operator Instructions]. We shall take our first question from Monica Bosio of INI Bank [ph]. Please go ahead. Monica Bosio - Caboto/ Intesa Sanpaolo: Hello, everyone. I would have two questions. The first one is related to the indication under dealer. You gave indication of a 10% growth in the dealer for 2008. I was wondering if this indication includes also the light commercial vehicles, because I remember that during your last interview, Mr. Marchionne too there was multi news. You had indicated Brazilian market which includes light commercial vehicles up by 15%. And second question is related to the renewal of labor contract, I was wondering if you can give us some indication on the impact in terms of additional costs from the renewal of labor contract in Italy. Thanks. Sergio Marchionne - Chief Executive Officer: By the way, if I didn’t make the reference to 15%, it may have been an estimate as to what we think the market will be in 2008, for both passenger cars and light commercial vehicles in Brazil. Monica Bosio - Caboto/ Intesa Sanpaolo: Yes. Sergio Marchionne - Chief Executive Officer: The number that we are forecasting in terms of our own growth in maintaining our current position is roughly 10% year-over-year. I mean, you may be right at 15% but it is a market which is on the way up and so we will see an improvement in performance, 2007 and 2008. In terms of the renewal of the labor contract, our full cost estimates for the impact on our accounts by 2010 is roughly €200 million. This includes all the elements of the agreement that was reached at the beginning of this week with the unions. It is clear that as part of the commitment which obviously brings with it an additional cost to Fiat that we are going to find ways in order to offset and compensate that increase in order to maintain our operating performance. So I think we do need… and there is ample room I can tell you within our manufacturing environment to try and find ways to offset that increase by driving efficiencies some of which are already incorporated in our world class manufacturing objectives. Monica Bosio - Caboto/ Intesa Sanpaolo: Okay. Thanks.

Thank you. We will take our next question from Avaneesh Acquilla of UBS. Please go ahead. Avaneesh Acquilla - UBS: Good afternoon. Avinash Kohler here from UBS. I have got three questions please. First one, on the Alfa plant closure, Q1, is it safe to assume Alfa losses actually get worse in 2008?. And can you just quantify the negative financial impact that we might see at Fiat also in Q1 because of that closure. Second question I have got is just on the Italian car market this year. What level of demand is Fiat also planning in 2008 in Italy, from the market that is? And just a final question on Casey Holland. You mentioned 200 basis points of lost margins from manufacturing and inefficiencies. Just given that the guidance CNH, 2008 requires over 200 basis points of margin improvement from the Q4 level, are you confident that these manufacturing inefficiencies can be solved very quickly? Is that right to assume that given the guidance for 2008? Thank you. Sergio Marchionne - Chief Executive Officer: All right. The impact on Q1, let me try and deal with these issues in order. The Q1 impact of the reshaping of the Pomigliano plant is roughly, on a net basis roughly €70 million. We have already booked about €40 million of that as part of the unusual… on the unusual line in the 2007 accounts. The objective is to make up that shortfall, that loss, that Q1 shortfall within the rest of the quarters of 2008. In terms of the Italian car market we are expecting it to be absolutely flat, over 2007. So, I mean whatever the low mean was which is roughly about 2.4 million cars, will be maintained for 2008. And in terms of the CNH questions that you have asked in terms of the margins the answer is slightly more complicated than this. I think we have identified the issues which have been at the root cause of the problem in Q4, in terms of the snag in production and logistical… logistics issues had a negative impact on… negatively impacted our margins. And the bulk of this has been booked in Q4, is roughly a $60 million cost. The issue at CNH is more complicated. I think that the level of attention that we need to pay to the industrial backbone of CNH is much greater than we have in any other sector in this group. And therefore there is going to be a pretty intensive process of rejuvenation of these plants. And the CapEx associated with this is not a large amount. But we do need to work a lot more workflow than the optimization of manufacturing processes in these plants. We will see the benefit of these of the Q4 fixes within the early part of 2008, but I think it will take as I said earlier in my… as I said in the conference call with the CNH analysts yesterday. It will take the whole of 2008 and the whole of 2009 to try and achieve the… to try and remedy this, what I call the industrial inefficiency problem. And bring CNH to a level where it can actually deliver the double digit margins that we wanted to deliver. It’s not… it’s not a short process, but the main issues will be dealt with within the early part of 2008. Avaneesh Acquilla - UBS: Okay. Thank you. Just to go back to that point then. I mean, should we be expecting CNH to be delivering an IFRS margin of something above 9%, rather than something above 10% in 2008 and is that the target given the revenues are higher? Sergio Marchionne - Chief Executive Officer: The answer is yes. Sergio Marchionne - Chief Executive Officer: Okay. Great. Thank you.

Thank you. We will take our next question from Luka Orcini [ph] of One Investment. Please go ahead.

Yes. Good afternoon. I had a question related to the last paragraph of your statement. And also related to something that was said yesterday at the conference call of CNH, and is related to the financial service and operation, which has required a 100 full ownership of special purpose trust. And that is increasing the debt of €1 billion. And also you were also saying that there are difficulties obviously in the wholesale, ABS market. My question mark is… what kind of… how much you need to rely on the securitization market for your financial service division, or alternatively how much are you planning to raise your debt in order to carry on financing your customers? Sergio Marchionne - Chief Executive Officer: Maurizio Francescatti will be answering to the first part of your question dealing with the… as per the issues of CNH financial services. Maurizio Francescatti - Group Treasurer: The point is relatively simple. I would say, that was a transaction that was already on book for IFRS purposes but was treated off-book under U.S. GAAP treatment. That transaction has basically… being a securitization basically has been dismantled and everything has been brought back on book even under U.S. GAAP and that’s what happened. Basically, we have financed through our own resources what was previously financed with securitization needs. Sergio Marchionne - Chief Executive Officer: I mean, the broader question that you have asked concerns the access to the ABS market. I made the comment earlier about the fact that we see two things in the ABS market, especially in Q4 2007. And so we have to begin at some time during Q3. The market has become tighter in terms of the availability of funds to finance ABS transactions. And the costs associated with the financing has gone up substantially over the period. This is, it’s a contagion effect of the SMBs problems with the sub-prime issue in the US. It is an issue which I think will go back to some level of normality when in 2008. We do not intend to replace… Fiat has the potential strength today to try and deal with the financing of those contracts independently of the ABS markets but we have no intention of replacing ourselves as providers of capital and substitution for the ABS transaction. It is a market which has been historically quite efficient in the US, and in my view will continue to be an efficient way of raising capital for capital goods companies. We are not the only issuers in this business. Most of our competitors have access… actually, all of our competitors have access to their financing source and I think, we will go back to normality hopefully within Q2 of 2008.

Just a question, do you expect to buy out another time or do you expect to buy out some of these vehicles in the course of say 2008, for a reason or another? Sergio Marchionne - Chief Executive Officer: Our expectations are that we will not.

Okay, thank you very much. Sergio Marchionne - Chief Executive Officer: You know, I think the only exception has been the Canadian market where the ABS market I think has structurally disappeared but I think it’s the function of the number of people living in cold weather. But I think the market is not there and I think that we finance Canadian operations that have internally available resources, but the US market which is the heart of the market is going to continue. And we have done two issuances in 2007 I think to prove to ourselves that we do two issues in the second, two quarters, in the second half… two over the years and two in the last half of 2007 to prove to ourselves that effectively the market still existed and that we have capital raising capabilities. Obviously, it came at a cost. We knew what that cost was, but I think our continued presence as an issuer in that market was important

Are you able to transfer to the customer or are you just keeping it for yourself? Sergio Marchionne - Chief Executive Officer: So, could you rephrase the question?

The question is refinancing and getting external finances for capital groups is possible but is becoming more expensive. The natural follow up question is, who is going to bear the expenses? Is that going to be on CNH or is that going to be spread with the customer or what is the capability of passing on that cost to the final customer? Sergio Marchionne - Chief Executive Officer: I will ask that you to come to the next management meeting of CNH to witness the debate between the brand, commercial people and the providers of capital of CNH. It is a thorny issue. I think that, obviously CNH capital is trying to pass it on the commercial organization to recover it from a customer. I think it is highly unlikely that that will be accomplished. I think that the market is sufficiently efficient to push back these costs on to the financing arm. And I think we’ll wear the cost until we reach stability again.

Okay, thank you very much. Sergio Marchionne - Chief Executive Officer: But that’s not going to materially change the earnings.

No, I can see that. It was more to get a color on what’s going on.

Thank you. We’ll take our next question from Paulo Mossole of Intermonte. Please go ahead. Paolo Mosole - Intermonte: Good afternoon, everybody. The first question I have is on the Fiat Auto margins. You are not giving anymore the guidance for the division. So the old one was for a margin of 3.6% to 4.4% Could you give us an indication of where you would see that margin for 2008? And the second question I think you have a good order backlog. Therefore if you could give us a more, a better feeling of where you see your revenues for 2008, roughly at least. And the third one, as your rise in the sales target and improving the debt target for 2008, do you expect… do you see more chances to revise your full year guidance upwards or more chances to revise them downwards during the year? Sergio Marchionne - Chief Executive Officer: Well, let me deal with the first question. I’m 55 years old, I’ve been doing this business for 13 years, I’ve never revised guidance downwards in my life Paolo Mosole - Intermonte: Okay Sergio Marchionne - Chief Executive Officer: So you may talk to another CEO if that happens, that’s the first thing. The other one is the Fiat Auto margin, I mean, we’ll confirm 3.6% to 4%, I think we need to finish the year. I have no better information today as to where margins will sit for 2008, and I will not hazard a guess on the order backlog and the strength. The real issue with the Vehicle was not the order backlog but it’s really our ability to produce, especially at the heavy end which has got a variety of issues surrounding including the availability of engines on the large equipment. But I would expect that the top line growth will be in excess of 5%, and we will leave it at that, and we will update it at Q1. Paolo Mosole - Intermonte: Okay, thank you.

Thank you. We will take our next call from Adam Jonas of Morgan Stanley. Please go ahead. Adam Jonas - Morgan Stanley: Hi, Adam Jonas, Morgan Stanley, good evening. Three questions, please. First, on Brazil, I do not know if you saw Ford’s numbers that just came out a little while ago but they threw off about a 15% margin for the full year in the region. Now I know in the past this time of the year you tend to give a bit more visibility on how well you are doing, maybe round numbers, but you give us a bit of visibility. If you assume anything near a Ford level of profitability for Fiat Auto in Brazil, then you are doing pretty much near or an order of magnitude of about $700 million or about what Fiat Auto made worldwide. Now I know you told us in the past that you’re definitely profitable in Western Europe. But am I wrong to assume that the profitability is not much at all? Or let me just be more direct, can you specify in round terms at least how big the improvement in profit was in Brazil now that we got the full year under our belt. The next question is you mentioned you were not going to change guidance until you kind of had Q1 under the belt. I think we all understand that given these market conditions, but we do have almost a month behind us now. So I guess the simple question is how is it going? We see the orders for some of your products are outstanding, but how do you think that’s translating? Just where is your bias here in terms of what you got so far? And finally on use of cash, first, I definitely commend you on not buying back the stock the last conference call when some analysts gave you a hard time, and I think we now see with definite hindsight that that was a very wise move. What is the priority now between credit rating and optimizing the capital structure because of that cash position now, it seems like you don’t have to do a hell of a lot to get your investment grade but just kind of wanted you to share some thoughts on that. Thanks. Sergio Marchionne - Chief Executive Officer: Brazilian question. I will not give you the operating margins for the Brazilian operation. We do make money in Europe and I will not comment on the size of the profit puzzle. We are not in the same box as Ford. And Ford’s organization in Brazil is slightly more complex than ours is on the car side. It involves activities that are not incorporated in our Fiat activities. Therefore I would be reluctant to try and make any comparison between our own Brazilian operations and Ford’s. Having said this, I think it is clear that Brazil continues to perform well both in terms of margins and cash generation. It is reflected on our commitment to grow volumes by 10% in ‘07-’08. But I think the important thing for us is that we stuck to our commitment to turn the European businesses into both earnings and cash flow positive positions, which was accomplished a few quarters ago, and that commitment and that type of performance has continued in 2007. In terms of guidance, when you ask me how is it going, given the fact that today is the 24th of January, best indications that I have had, and I have met with the management team yesterday and the day before is that everything is going well, and therefore we have seen and we were able to confirm guidance for 2008. Today, I think we see no indication of a slowdown. The order books continue to be strong and sales are going well. So subject to the traditional manufacturing issues that we are experiencing everywhere, I think the business is doing well and I think in line with the guidance that we have given for the full year. The third question that you have asked in terms of the use of cash, I could be blunt, I was somewhat disappointed by Moody’s reaffirmation of the ratings this afternoon. These are now stretching the limits of credulity in terms of what it takes to get rating agencies to try and change their minds. I mean I threatened the world at large with the fact that at one point in time, we will not need the rating once we are sitting on cash, we are at that stage now. Having said this I think from an ethical standpoint I think it would be a great thing if Fiat was given back the investment grade ratings that it lost in 2003. I think based on what we have seen today, we have earned the right to be investment grade. And certainly when I looked at some of our competitors, I would dare to say we are probably in better shape than some. Having said all this I think that we are going to… and given the fact that we do have available cash resources, we are going to continue our buy back program, We are going to do this, as I mentioned in my previous call on terms, conditions and strategic parameters that are totally within the control of Fiat. We will intervene as required. I think we will make the best use of that acquisition policy in terms of the financing needs of Fiat Group going forward. I have to tell you I think that the stock at current levels is severely undervalued, and I think it has been punished unnecessarily, through what I consider to be a global turmoil that has absolutely nothing to do with the fundamentals that is business. So we will be active and we will do so even after the AGM met and the authority has been renewed. Adam Jonas - Morgan Stanley: Thanks for the answers and good luck for this year.

Thank you. We will take our next question from John Buckland of MF Global. Please go ahead. John Buckland - MF Global: Hi, good afternoon, thanks very much. Just on that use of cash, strategic premises that determines the buy back, just going back to Iveco, I see that you mentioned that your Fiat engine is very expensive, obviously if Iveco does suffer versus its competitors for the lack of a scale and… Sergio Marchionne - Chief Executive Officer: I’m sorry, in what way do we suffer from a lack of scale? I hate to stop you midstream. We have almost 12% Western European share in heavies. The biggest guy has got 20%. John Buckland - MF Global: But on a global scale. Sergio Marchionne - Chief Executive Officer: Our engine business is of equal size if not bigger than the engine business of our competitors on the truck side, and that’s why we created Powertrain as a separate standalone division to develop engines for internal and external use. It produces similar engines for the application in tractors, in construction equipment and therefore the base on which these engines are being developed is a much greater base than what it would be for any other truck manufacturer in Europe. John Buckland - MF Global: Okay, so the answer is then you do not need to make any acquisitions or you can carry on developing the business in organic basis, because I thought you alluded to that you were going to think about reentering the US market early on this year. Sergio Marchionne - Chief Executive Officer: I agree, but it’s a separate discussion right now. The issue as to whether we want to be in the United States is not driven by desire in our part to try and find volumes for a 13 or a 16 liter engine to put in a tractor. It has to do with the expansion of the brand outside of its traditional trading areas. And therefore I have been clear about the fact that Iveco is a truck business, has all the capabilities from a manufacturing, design standpoint to be present in the US as a viable market. It is a market that we like, we understand it to be a lot more cyclical than Western European markets because of the environmental legislation which is incredibly cyclical and predictable in terms of engine replacements. And therefore we are approaching it with a high degree of caution. I have been clear about the fact that there are very few targets available in terms of acquisitions in the business. And I also made a commitment on another prior call that we will make a determination within the first quarter of 2008 as to whether we would enter this market organically or whether we would do it through acquisition. My gut today tells me that we will do it organically and that we will use the CNH network in the US to try and expedite the entry. John Buckland - MF Global: Okay, great. Just to be clear, I mean, when we talked about CNH today and the apparent inconsistency between the two levels of targets, basically you said you are going to do about 9% margin under IFRS, and I guess the revenue will be quite strong. Aren’t you… I mean, although you are not increasing your guidance, if you implicit… in the lower CNH margin guidance, isn’t it implicit that you are actually looking more positively at the businesses and particularly those that are non-core, we cannot say they are non-core, but the smaller divisions, perhaps you could talk a little bit about the profitability expectations for Comau, for Teksid, for Magnetti Marelli? Sergio Marchionne - Chief Executive Officer: Well, let’s deal with the first two of the last three that you mentioned. I am not expecting earth shattering performances from either Teksid or Comau. I think that you are going to get performances which are line with history. I think Comau will be profitable but it will not be a significant contributor to the overall trading performance to the group. Teksid is limited because of the fact that it really has limited capacity and therefore what it does do, in terms of volumes is physically limited. And therefore, I think its margin aspirations are somewhat limited. I think it’s a completely different story in terms of Marelli. Marelli has been nurtured over the last few years to be a significant player in the components business. I think it’s based on incredibly wise choices about the type of technologies that it is going to focus on. I think that it has a lighting business which is world class. We have engine control unit technologies which are world class. I think that there are parts of that business that will continue to grow at double digit rates part of which are associated with the volume growth of Fiant, but the majority of which is being driven by the penetration of Marelli or third party supply agreements. And so our expectations of this business will do around 5% in the medium term. There’s part of that business that is not very earnings enriching which has to do with suspensions and with exhaust systems. But the bulk of the business is quite healthy and I think that we need to take it; we need to take it in 2008 at around the 5% margin. The other questions that you have asked me about given, and I believe that you were asking me whether I was in a position to sort of uplift earnings on the basis of our expectations on CNH. There is not a single doubt that we’re expecting CNH to have an outstanding year in ’08. I think all indications are that the volumes will be there, and if we continue to work diligently on the industrial issues facing the business, I think we will be able to move margins, and move them all significantly. But I think I’d like to wait until the end of Q1 to try and make that call for the year. John Buckland - MF Global: Thank you.

Thank you. We will take our next question from Thierry Huon of Exane BNP PARIBAS. Please go ahead. Thierry Huon - Exane BNP PARIBAS: Yes, good evening, Thierry speaking from Exane BNP PARIBAS. I would like to have some clarification on the possible spin off of the auto division, Mr. Marchionne, you said several times that is something you might consider. But I would like to know if you’re saying that considering selling a stake to an automaker or just to do a real spin off, meaning to distribute part of the Fiat Auto capital to your current shareholders. If you could clarify this point it would be useful. Then I have a question about Formula One. If the factor to you winning the championship have anything to do with the performance of… the financial performance of Ferrari. Did you receive higher TV rights, since you won this championship? And last question about Iveco. You said several times that you’re about to make your mind about this comeback, about your introduction in the U.S. Could you give us some clues on the time schedules for this? Thank you. Sergio Marchionne – Chief Executive Officer: Just to be clear I have never changed the date on the time that I would make up my mind on the Iveco position in the U.S. I always said it was going to be at Q1 2008 call, always. And so by the end of this quarter we will tell you which way we’re going to go. I’ve mentioned earlier, Thierry, that I think we’re going to go there by… my gut tells me today that it will be an organic introduction, organic growth and the repositioning, from scratch it will be Iveco brand by leveraging the CNH network and industrial activities in the U.S. In terms of Formula One, yes there was an additional income to what was received by Ferrari but it was not material by change to reported earnings of the house. And the other issue which appears to be a recurring theme of the spin off for the car business, I’m going to go back, I’m going to try and rephrase or recast the answer one more time so there is no confusion. What I said was if the continued presence of the capital goods businesses such as Iveco and CNH, together with the current business had a negative impact in the valuation of this group because they dropped or reduced the evaluation parameters associated with the component parts of Fiat, then we will seriously consider looking at ways to unleash that value. I find it hard to believe based on your alternatives that you’ve asked as to whether the partial sale of a block of Fiat Auto a third buyer would accomplish that end… because it will still retain the [inaudible] of assets which will be the cause of the value depression of the stock. Is that helpful? Thierry Huon - Exane BNP PARIBAS: Yes, certainly. If I may have a last question about the share buyback, what is the rationale behind the share buyback? I mean when we are listening to you, we understand that that is full of opportunity and that it could be Iveco in the U.S. it could be CNH development, it could be even the auto development. So what is the rationale behind this share buyback? Would it not make more sense to keep the cash and to try to develop more your own business instead of returning the cash to the shareholders? Isn’t that kind of weakness sign that you give to the market? Sergio Marchionne – Chief Executive Officer: You know, I’ve come to the conclusion that we can never win this game. If we don’t buy the shares back we’re considered to be idiots because we’re leaving undervalued assets on the table. And if we buy them we’re being accused of the fact that we have no investing opportunities and therefore, we’re doing the stupid thing. I showed you in slide 2 of the presentation, the amount of industrial cash generation that has come from this business in three years. We’ve produced over €13 billion worth of cash, all of which was more than enough to finance all the growth ambitions of Fiat Group worldwide. And I’ve never, ever lamented in either phone calls that I’ve been on about capital rationing, inability to access capital sources, inability to obtain funding, inability to issue bonds and do anything like this. The problem is that when we see share prices at this level which in our view, are not reflective of the earnings or the current earnings performance and the future earnings capabilities of this house, then on an investment basis, I think it would be criminal if Fiat Group did not invest and take this weakness out of the market and take it for the benefit of the remaining shareholders. I think it would be ludicrous. And so the answer to your question is that we can do both. The minute that we get into a box and we have to make choices between growing the business and buying back shares, I’ll grow the business. But we’re not in that box today. Thierry Huon - Exane BNP PARIBAS: Okay, that’s really clear. Thank you very much. Sergio Marchionne – Chief Executive Officer: Thank you.

Thank you, we’ll take our next question from Andrew Lobbenberg of ABN AMRO, please go ahead. Andrew Lobbenberg – ABN AMRO: I got 3 questions if I may. The first one on dividend, given that the dividend that you’re proposing for this year looks rather higher than what I think was slated for next year. What are we meant to think about the dividend progression from here? I guess an interesting follow on from the discussion on share buybacks. Sergio Marchionne – Chief Executive Officer: 25% of consolidated group net income. Andrew Lobbenberg – ABN AMRO: Okay. Back on the luxury brand zone on Ferrari and Maserati there, they’re making grand progress but they’re still, you know a long way short of those Germans in Stuttgart. Just how far conceivably could the margins go for Ferrari and Maserati? Sergio Marchionne – Chief Executive Officer: I think you’re obviously not talking about performance either on the track or in terms of the performance of the vehicles when you make reference to Stuttgart. You’re talking about margins, right? Andrew Lobbenberg – ABN AMRO: Yeah. Sergio Marchionne – Chief Executive Officer: Okay, well given the fact that you’re talking about margins, we’re getting relatively close to Porsche’s margins which are roughly 18%. So they’re within sight, give us some time, we’ll get there. Andrew Lobbenberg – ABN AMRO: Anything Maserati could better do? Anything Maserati could get those to, both Maserati and Ferrari? Sergio Marchionne – Chief Executive Officer: I think in time Maserati can get there. It has the potential. Andrew Lobbenberg – ABN AMRO: Okay. And then just finally on the trucks, in Western Europe your market outlook is a positive outlook but weighted to the first half. Do you have any visibility on the slow down in the second half or are you just being cautious? Sergio Marchionne – Chief Executive Officer: Cautious only. No indication of a slow down. Andrew Lobbenberg – ABN AMRO: Okay cool, thanks so much.

Thank you, we’ll take our next question from Philippe Houchois of JP Morgan. Please go ahead. Philippe Houchois - JP Morgan: Yes, good afternoon. Two questions please, one is I was looking at your CapEx for ’07 is up above 30% from the year ago level. Can you tell us what drives that increase, which divisions and if we should be looking at that level of CapEx going forward or higher or lower? And the other question that I had was more on your tax credit, haven’t talked about it for sometime, are you dipping into tax credit into terms of not paying P&L taxes to cash or is it not, what’s the status there and should we expect that to become tax-free earnings? Sergio Marchionne – Chief Executive Officer: Just in terms of the numbers on the tax question. We’ve begun to access the pool of unutilized tax, un-booked, unutilized tax flow carry forwards. And we’ve used about €400 million, slightly north of €400 million in 2007. And so you know the earnings generation that we’re experiencing is giving us an opportunity to try and use them. And so we do expect that to continue and at some point in time, I think I need to go back and look. The amount of tax allowances that we had at the end of 2006 was these relate to un-booked tax debits and it was roughly about €5.4 billion, we’re now down to about 3.9. Obviously some of these have been changed because of changes in tax rates which accounts roughly for €800 million of the decrease but we have used about €440 million of the debit and calculating the tax provisions for 2007 and in part justifies the reason why it is lower than it was in 2006. In terms of the capital investment program work, we’re expecting the 2008 number to average at about €4 billion, slightly north of €4 billion. I think that there has been a commitment across all the sectors to a number of growth initiatives, some of this relate to the current business which still accounts for roughly half of the capital commitments to the house but we are seeing significant capital calls being made by the engine business which is trying to expand its range both in terms of products and geographical presence. Then we’ve seen uplift in the CNH commitment which in 2007 was close to €300 million, almost €400 million over and which was almost a 50% over 2006 levels. So it’s a general increase across all the businesses, most of which are designed to deal with geographical expansion of the businesses. Other than the car side which obviously is working on product rejuvenation. Philippe Houchois - JP Morgan: Okay, thank you very much.

Thank you. Our final question comes from Martino De Ambroggi of Euromobiliare. Please go ahead. Martino De Ambroggi - Euromobiliare: Yes, good afternoon, everybody. Two questions. In your October ’06 presentation, you presented a nice slide with a simulation on down cycle. Could you give us an update on what’s the sensitivity of your trading profits to… I can say 5% reduction in sales across all sector. I just want to understand what’s the sensitivity considering you’re starting from a significantly better trading profit at the beginning of the year based on ’07 figures? Sergio Marchionne – Chief Executive Officer: I have no clue. Martino De Ambroggi - Euromobiliare: Okay. Sergio Marchionne – Chief Executive Officer: The answer to your question… a 5% decrease in volumes, I’ve done 20% and the 20%, I make money. Martino De Ambroggi - Euromobiliare: Yes. But you’re confirming the same figures even if ’07 was better than expected or it can be improved in this process? Sergio Marchionne – Chief Executive Officer: 20% of ’07 levels would give us better profit generation than 20% of ’05. Martino De Ambroggi - Euromobiliare: Okay. Well skipping to the second question, if you could quantify the impact at the industrial net financial position attributable to the change in sales of receivables just to understand what was the impact on the net financial position due to change in sale of receivables? Sergio Marchionne – Chief Executive Officer: I’ll give it to Mr. Francesco because I have no clue. Martino De Ambroggi - Euromobiliare: Thank you. Maurizio Francescatti - Group Treasurer: You have in the appendix of the presentation the specific numbers of sales of receivables at group level. That of course the level has increased compared to last year that reflects of course the increased level of activity and especially in the last quarter. Martino De Ambroggi - Euromobiliare: Well, if I may, it is just because I saw these figures more than €1 billion impact. So just to understand if it’s all to be attributed to the industrial net debt or can be split with financial industrial? Maurizio Francescatti - Group Treasurer: Mostly to industrial. If you look at the increasing revenue comparing Q3 and Q4, you will verify that increase that you have between September and December and it is a linear behavior. Martino De Ambroggi - Euromobiliare: Okay. So, if I split it 60/40 it would be reasonable? Maurizio Francescatti - Group Treasurer: I’m not sure about what you’re talking… about which kind of split you are talking about? We can go into details. Martino De Ambroggi - Euromobiliare: You had mentioned it’s mainly industrial, just to understand if these changes. Maurizio Francescatti - Treasurer: The increase was due to industrial, yes. Martino De Ambroggi - Euromobiliare: Okay, okay. And last question is, your assumption on net working capital in your ’08 guidance for industrial net cash. Sergio Marchionne – Chief Executive Officer: We’re trying to give you the exact number; I don’t want to give you an approximation. Martino De Ambroggi - Euromobiliare: Thank you.

Thank you. Sergio Marchionne – Chief Executive Officer: Sorry, operator, I just wanted to give him an answer. It will be about €1 billion positive.

Thank you. That will conclude the question-and-answer session. I would now like to turn the call back over to Marco Auriemma for any additional closing remarks. Marco Auriemma – Vice President of Investor Relations: Thank you all for participating in the call. Please feel free to call us for any follow up questions. Have a good day.

Thank you. That will conclude today’s conference call. Thanks for your participation, ladies and gentlemen, you may now disconnect.