Marco Auriemma – Head, IR Sergio Marchionne – CEO Richard Palmer – CFO

Charles Winston – Redburn Partners Richard Hilgert – Morningstar Martino De Ambroggi – Equita Fraser Hill – Bank of America Jochen Gehrke – Deutsche Bank Massimo Vecchio – Mediobanca Philippe Houchois – UBS

Good afternoon, ladies and gentlemen, and welcome to today’s Fiat Group 2012 Second Quarter and First Half Year Results Conference Call. For your information, today’s conference is being recorded. At this time, I would like to turn the call over to Marco Auriemma, Head of Fiat Group Investor Relations. Mr. Auriemma, please go ahead, sir.

Thank you, Sammy. Good afternoon to you all and welcome to Fiat Group’s second quarter 2012 results webcasting conference call. As you know, the press release was issued earlier this afternoon and is available together with the conference call chart set on our Investor Relations website. As usual, today’s call will be hosted by the Chief Executive, Sergio Marchionne, and by Richard Palmer, the Chief Financial Officer. After introductory remarks, we’ll be available to answer all the questions you may have. Before we begin, let me just remind you that any forward-looking statements we might be making during today’s call are subject to the risks and uncertainties mentioned in the Safe Harbor statement included in the presentation material. As always, the call will be governed by this language. With that, I would like to turn the call over to Sergio Marchionne.

Thank you, Marco. Good afternoon. Good quarter for Fiat, obviously on the back of some reasonably strong results for the Chrysler which helped the bottom line. Fiat with Chrysler, as you know, from the press release and from the analyst deck would have showed a loss. A couple of points of references just to get the conversation started before I pass it onto Richard and then we end up taking question. The European market continues to show signs of weakness. We’re in the process of closing Italy here in a few hours. And I think you will see that the number in July, the market is probably down around 20% year-over-year. My forecast for the Italian market is at 1.4 million or slightly less than that number, which is a substantial decrease for both 2011. And for those of you who have sufficient memory of historical records, we were about 2.5 million back in 2007, nearly 2.5, so a substantial decrease in volumes. Europe continues to show signs of weakness. It is highly unlikely that this market will recover in 2012. And we are – as we mentioned in the last conference call, we’re in the process of revisiting our expectations – the European market we’re doing that now. We’ll finalize the analysis on our Q3 call and present our findings, our intensions in terms volume ambitions at that time. So either and confirming the continuing weakness of Europe, I really have nothing to add. We’re very much encouraged what has happened Latin America. As you all know there were concerns that were lingering at the time that we got together and last time about the strength of that market, a number of initiatives have now been placed, have been put in place by the government, they are effective, Richard will take you through some data that will show the efficacy or the measures we’ve seen significant ramp up in daily volumes in Brazil and allow those to confirm our guidance vis-à-vis the region for the whole of 2012 than in all likelihood in 2013. NAFTA continues to perform well and certainly in line with and to our own expectations. As I mentioned during the course of the call and you will see this from some of the charts that Richard will talk about. We are now running at excess of 100% technical capacity of the system. In the United States we are adding on additional shift and all indications are the volume for the second half of the year will be more or less equal to what we’ve been able to produce in the first half of 2012. APAC is a work in process. I think you’ll see from the numbers, we continue to make money in the region and withstanding the fact that we are relatively embryonic stage of development. I think the best is yet to come, but I think we’ve put the structure in place now to drive business going forward. I really have no bad news to give you as I did not have any bad news on the Chrysler call. We have now refinanced all of our 2012 requirements. We’re sitting on what I consider to be an inordinate amount of liquidity in the system. And we have done this as a sign of precaution and safety given the volatility of the markets and we are confirming guidance for the year. I think you know the question is to whether we hit the €4 billion trailing profit number or not is to be seen and probably we’ll have better view on this by the end of the third quarter. But really not much else to add, a good quarter in line with expectations and as I said earlier, I think what are the nagging doubts we had about the large American position and the book to bed and (inaudible) reassured us in terms of our investment plans for the – for the region and we’re going to be doing there for the next two or three years. So on that basis, Richard, why don’t you take them through the numbers and I will come back and take questions.

Thank you and good evening, everybody. Go to page three on the deck, the results for the quarter. Revenues were €21.5 billion, trading profit of €1 billion with all regions contributing positively with the exception of Europe where losses were reduced compared to first quarter this year. And net profit at €358 million, net industrial debt was reduced to 5.4 billion and our total liquidity at the end of quarter was €22.7 billion, including 3 billion of our credit lines. Shipments for the quarter were 1.1 million units and I think just over 2.1 million for the year-to-date. During the quarter we signed an MoU with Mazda for the production – for the development and production of Alfa Romeo roadster and we expect to complete that agreement in the second half of this year. As you are aware, we completed the conversation of the Fiat preference saving shares into ordinaries. We have notified and exercised the option on the VEBA to purchase a portion of VEBA’s interest in the Chrysler Group. We haven’t yet settled that transaction. That amount is 3.3% of the company and would add to the 58.5 to get to nearly 62% at closure. During July we issued a bond for €600 million, which, as mentioned, completes our coverage of 2012 maturities and covers also one-third of those of 2013. And our full year guidance is confirmed. Go to page four, and that say group revenues were up to 21.5 billion compared to 13 billion last year. When Chrysler was consolidated for the – only for the month of June and reflected strong growth in NAFTA and APAC some softening in LATAM. Although, the Brazilian market, we started to rebound strongly in June and a decline in EMEA due to the continued deterioration in the European marketplace. Excluding Chrysler, revenues totaled €9.2 billion, a 7.5% decrease over Q2, 2011, mainly reflecting volume declines in Europe, where the difficult trading continued for both the passenger car and LCV business, particularly in Italy. Luxury and Performance brands increased revenues by nearly 9% to €0.8 billion, driven by growth in Asia and North America. And components were down nearly 5% to €2.0 billion, mainly due to the weakness of the European industry. Group trading profit reached €1.0 billion with margins of 4.7, up from 4.3 in the first quarter of this year on the back of the continued strong performance for the Chrysler brands in NAFTA and APAC, with EMEA reducing the loss by approximately €70 million over first quarter. For LATAM, the run-rate of trading profit was in-line with full year expectations. There was a positive performance from Ferrari and Maserati, up 16% year-over-year and trading profit for Fiat excluding Chrysler was €144 million for the quarter compared to 375 million last year, reflecting lower volumes in Europe down 45,000 units and to a lesser extent Latin America down 17,000 units. EBIT for the quarter was 1,102 billion excluding Chrysler. Net profit was €350 million, 103 million after minorities. Excluding Chrysler there was a 246 million loss as compared to 104 billion profits for Q2, ‘11 which included the net unusual income of €1.3 billion driven by the one-off gain on the acquisition of control of Chrysler in 2011. Excluding unusual items, the loss of ex-Chrysler was a 152 million in Q2 ‘12, compared to 76 million profit in Q2 ‘11. Net industrial debt as of 30th June 2012 was €5.4 billion, a reduction of more that 0.3 billion for the quarter. Excluding Chrysler, net industrial debt was 4.1 billion, an increase of 0.2 billion for the quarter. Capital expenditure for the group totaled 1.7 billion in the quarter. Liquidity inclusive of undrawn committed credit lines of 3 billion, improved to 22.7 billion with liquidity related to Fiat excluding Chrysler remaining above €12 billion. Moving on to slide five, if we look at the group performance by operating segment compared to 2011 on a pro forma basis where the Chrysler was also included for the whole quarter. In the quarter, the topline grew 12.3% on a pro forma basis, driven by strong performance in NAFTA up 31% and APAC up over 80%, which more than offset a 10% decline in LATAM and then the double-digit drop in EMEA. On a pro forma basis, the group posted an EBIT before unusual in excess of 1.1 billion, an 18% increase driven by NAFTA, up 80% driven by strong volume growth and APAC with three fold growth due to the improvements in both volumes and margins. EBIT in LATAM was down by 32% due to lower volumes, price pressure and the currency translation impact. EMEA reported a 184 million loss down from 406 million a year earlier. This year includes 91 million unusual charges represented by the write down of the investment in SevelNord JV following the agreement with PSA, where as Q2 2011 included 372 million of unusual charges due to product portfolio rationalization following the acquisition of control of Chrysler. And excluding unusual, the loss for EMEA was 93 million in Q2 ‘12 compared to 34 million in Q2 ‘11. Moving to page six, the P&L the low trading profit shows net financial expenses for 463 million for the group, excluding Chrysler the increase of financial charges versus Q2 2011 was 96 million mostly due to the higher level of the net indebtedness. Profit before taxes was 532 million, excluding Chrysler there was a loss of 154 million compared to a profit of 1.5 billion in Q2, including unusuals. Net of the unusuals loss was 60 million compared to a profit of 223 million in Q2, ‘11. Income taxes totaled to 174 million, excluding Chrysler income taxes were 92 approximately 30 million lower than prior year. These taxes were linked primarily to taxable income of companies operating outside of Italy and the employment related taxes in Italy. Moving to slide seven, revenues for the mass market brands were up 13% compared to Q2 ‘11 pro forma. As far as luxury and performance brands are concerned, Ferrari posted nearly 11% growth, while Maserati was up 2%. Group trading profit improved 13% with NAFTA and APAC more than compensating for declines in EMEA and LATAM for the mass market brands. Luxury and performance brands were up 15.6%. Slide eight, deals with our focus on cost and disciplined management as a manufacturing infrastructure, which is ensuring continued alignment between production and market demand in which the levels continue to be in balance with demand in all regions. Driven by the continuing improved sales performance for the NAFTA region. We are preparing for the introduction of three crew operations at Belvidere and Jefferson North plant. By year end these two plants will join the Windsor Assembly plant already running on a three shift basis. In Brazil, we recently announced the addition of 600 temporary workers to boost production by 150 vehicles a day to 3,150 a day at our Betim plant to respond to increasing market demand. Activities are on track for the start of production of new Pernambuco plant in 2014. In EMEA, we stopped production to temporary lay-offs including Central Staffs for the region operations, due to the fall in market demand. Since new collective labor agreements entered into force in Italy, we’ve been experiencing initial positive signs such as a sharp reduction in labor incidence and absenteeism now at normal levels in most plants. On the purchasing side, Group achieved 1.5% in gross savings which drove net positive performance in the quarter of about 50 million in line with our full year expectations. World Class Manufacturing delivered net savings in excess of 250 in the first half of the year, evenly split between Q1 and Q2 and fully on track with the target of 400 million for the full year. Now on page nine, on July 25th, the Fiat plant in Pomigliano D’Arco which produces the new Panda was awarded the prestigious international Automotive Lean Production 2012 award in the OEM category following an analysis and evaluation process by a committee experts selected by the German magazine Automobil Produktion. Since 2006, over 700 production plants in more than 15 different countries including Germany, Spain, France, Benelux and Italy have taken part in the selection process to win this sought after trophy which is one of the most significant on a European scale. Page 10 shows the net industrial debt reduction of 337 million in Q2 to €5.4 billion. The positive change in net debt came from 2.1 billion positive cash flow from operating activities, which exceeded 1.7 billion of capital expenditure. And the cash flow from operating activities is consistent with the size of EBITDA and with a positive contribution from working capital, which almost offset the financial charges and current taxes. The resulting 470 million positive cash flow from operating activities partially offset by 137 million negative impact due to foreign exchange effects and non-cash item. Working capital was positive in the quarter with each of Chrysler – and Fiat ex Chrysler generating about 0.3 billion mainly from payables and inventories as a result of regular seasonality in certain regions and the recovery from the long lasting Italian car holder strike, which impacted Q1. Moving to slide 11, liquidity for the Group further improved at June end to 22.7 billion, including 3 billion of undrawn committed credit lines. Total liquidity for Fiat ex Chrysler amounted to €12.1 billion, slightly above the levels as of end of the prior quarter, while Chrysler recorded a 1.2 billion increase, of which 0.5 was due to FX translation. Fiat capital market and bank debt maturities was spread over the next five years and beyond. Thanks to the latest 600 million issuance in July, 100% of bond maturities for 2012, and one-third of those for 2013 are now covered. Chrysler has the majority of debt maturing beyond 2016. Moving on to page 13, we can focus on the regional performance for the mass market brands of the Group starting with NAFTA. The Group has continued to perform strongly in this market on the back half of the continued success of the significant rejuvenated product line up. Revenues increased 31% or 70% in U.S. dollar terms, driven by higher level of shipments, up 19% over the same period of last year. Trading profit was €717 million, 300 million higher than last year on a pro forma basis with volume increases in positive pricing only partially offset by industrial cost including product content enhancements. Group sales were 20% higher than a year ago at 532,000 vehicles, primarily reflecting a 24% increase in the U.S., where sales of our cars improved 42% while trucks increased 16%. In U.S. and Canada, most of our brands recorded double-digit increase in the quarter. On slide 14, we take you through the EBIT walk for NAFTA. EBIT for Q2 ‘12 was €744 million, nearly 80% higher than last year’s level on a pro forma basis. The 284 million-improvement for volume and mix was driven by higher shipments for nearly 90,000 units, partially offset by unfavorable car-line and market mix. Positive price impacted for 77 million reflects pricing actions implemented in late ‘11 and early ‘12. Purchasing efficiencies were offset by the impact of vehicle content enhancement, resulting an increase of 136 million in industrial cost. Other primarily reflects the foreign exchange translation impact of about €70 million. Moving to slide 15, the U.S. industry continued its recovery pattern posting a 16% growth versus the same period of last year. The group reported the best June since 2007 being the 27th consecutive month of year-over-year vehicle gains – vehicle sale gains. Q2 market share were 11.2% with 60 basis points higher than a year ago with the retail sales increasing 32%. Fleet mix decreased to 27% from 32% in the prior year. Canadian market recorded a 6% year-over-year growth. The group sales in this country were up 4%, resulting in a 14.5% share with retail market share of 12.2, the sales increases driven by Chrysler 300 and Chrysler 200. Moving to LATAM on slide 16, the region maintained its generally good trading conditions in Brazil, the passenger car and light commercial vehicles market showed a 860,000 units in line with the last year, notwithstanding a tough comps of the industry posted the best Q2 ever in 2011. Progressive improvement was experienced during the quarter, thanks to new government measures introduced in late May, which also supported the expansion of credit availability. Total group shipments were down 7%, with the trend improving through the quarter, the positive trend which continued in July, we’ll see that in the latest chart. Revenues were down 9.8%, on a constant exchange revenues decreased by just under 6%. The reduction in trading profit was €139 million or 120 at constant exchange mainly attributable to the lower volumes; pricing pressure and increased advertising spend for the new product launches. Year-to-date results were in line with the target of more than 1 billion of trading profit for the LATAM region for the full year. Company and dealer inventory levels at quarter end remained at an optimum level of 22 days’ supply, approximately 25% lower than the estimated industry average. Moving on to slide 17, the EBIT walk for LATAM shows negative volume impact as mentioned, while pricing pressure continued in the region. The efficiencies obtained to what WCM and purchasing actions were unable to offset the labor cost inflation and increase depreciation due to new product introductions. High SG&A was driven by higher advertising spend for the new product launches. Page 18 shows the passenger car and light commercial vehicle market in Latin America reached 1.38 million units, substantially flat versus a year ago. The industry is on target for about 5.7 million vehicles for the full year with the outlook for the Brazilian market of mid single-digit growth. Following the introduction of various couple of measures during the quarter, the Brazilian market reacted very positively. The average daily sales jumped in the later part of May, closing a record breaking June with 17,000 units per day plus 37% versus prior month. As of end of last week, July is off to a good start being up nearly 20% versus the same period last year. Additional liquidity, low interest rates and the IPI sales tax reductions are expected to continue stimulating Brazilian sales for the remainder of the year. The Group confirmed its leadership of the Brazilian market with an overall share of 22.1% down 60 basis points over Q2, 2011 and 160 basis points above the nearest competitor. The Group’s best selling product continue to perform well driven by the continuing success of the Uno and Palio. Fiat held nearly 30% share of the A&B segment combined. In Argentina, where the mark was down just under – just over 1%, Fiat market share was in line with Q2, 2011 at 11.2%. Moving onto APAC on slide 19, generally strong trading conditions in this region where the recovery in Japan and double-digit growth in China and in Australia shipments improved 73%, 26,000 units. Revenue is increased nearly 90% to €760 million mainly driven by Chrysler Group brand. The trading profit improvement nearly tripled the prior year to 64 million, was primarily driven by the volume growth, partially offset by increased industrial cost and selling expenses to support our regional expansion in this area. The trading margin was up 250 basis points to 8.4%. EBIT was three times higher than a year ago reflecting the growth in trading profit and improvement in the Indian JV performance. Retail sales including JVs were up 24%. On the back of strong performance of Alfa and Jeep with the latter more than doubling last year’s sales levels. During the quarter, Chrysler Australia become the sole distributor of Fiat and Alfa – brands in Australia with the distribution network now expanded by 17 car dealerships and 22 commercial vehicle outlets under the new agreement. In India, the newly formed Indian distribution company will take over commercial and distribution activities of fiat vehicles in India which were previously managed by the JV with Tata that JV remained in place for the manufacturing activities. On page 20, the EBIT walk for APAC shows the €41 million quarter-over-quarter improvement driven by volume mix effecting improved shipments across all countries industrial costs were impacted by enhanced vehicle contents and higher selling expenses supported the continued business growth in the region. Slide 21 deals with market trend the group sales including JVs about 24% higher than a year ago and in the growing industry where the group competes driven by strong performance China, Australia and South Korea. In China, Jeep recorded robust performance up 150% driving group’s sales up 24%. The Comparisons in – sales were up 200% gaining 170 basis points of share in the compact SUV segment. In Australia, the group posted the industry’s best improvement in quarterly sales volume was 60% of the prior year driven by doubling of the Jeep brand in the market which grew 17% in the quarter. (Inaudible) sales increased more than fivefold with 560 basis points share gains in the full size SUV segment. Japan’s experience continues to recover the auto industry since the earthquake devastation last year with Alfa sales up 180% and Jeep sales up 60%. The South Korean industry was basically flat with the group sales improving 54% driven by the growth of Jeep and Chrysler up 72% and 44% respectively. Slide 22, deals with the EMEA region. The European market was down for the third consecutive quarter with prolonged weakness in the Mediterranean countries in a highly competitive environment. Group revenues were down 10%, mainly reflecting lower shipment volumes. The trading loss for Q2, ‘12 doubled versus prior year, but improved by €70 million over Q1, 2012. Negative volume and price effects were only partially offset by industrial efficiencies and cost containment actions. EBIT was negative at €184 million including unusual charges of €91 million due to the write-down of the investment in SevelNord. The Q2, 2011 loss of €406 million included unusual charges of €370 million due to the rationalization of the product portfolio following the acquisition of control in Chrysler and excluding these unusual, the EBIT loss of 2012 increased to €93 million compared to €34 million in the prior year period. Results from investments contributed positively for €45 million improved from €31 million in the prior year. Total shipments were down 45,000 units in the region mostly attributable to Italy, 23,000 units, France and Germany. Q2 shipments improved compared to Q1 by 41,000 units in part due to restored supply following the car hauler strikes in Q1 and to seasonality. Jeep recorded another strong quarter with 34% growth in shipments to 17,000 cars. The EBIT walk on slide 23, shows the efforts which the Group implemented through the WCM program and purchasing actions alongside tight control over SG&A to account to the impact of the decline in shipments and continued pricing pressure in all market segments. EBIT excluding unusuals was down 59 million, but improved by about 80 million compared to Q1 ‘12 mainly driven by the higher volumes and continued cost control. Page 24 shows the passenger car industry in Europe which was down 5.4% among major markets a double-digit slump was experienced in Italy and Spain. France was down 6%. UK was up 5 and Germany was flat. In this weak environment, the Group sales were down 13% to 237,000 cars, posting Q2 share of 6.8% down 60 basis points compared to a year ago almost entirely attributable to further reduced weight of Italy and the European market. The share gain of 50 basis points over prior quarter was achieved on the back of the partial recovery of sales losses due to the car hauler strikes in Q1. In Italy, market demand was down 18.6% in the quarter, with June being the seventh consecutive month of double-digit decline. Group share was 31.2%, up a 120 basis points driven by positive performance in A, C and SUV segments. Page 25, the business environment in Europe for light commercial vehicles was also weak EU27 and EFTA industry was down 11% in the quarter with declines in all major markets. Italy and Spain contracted the most down 33% and 29% respectively. Fiat Professional brand sales were 58,000 units, 11,000 lower than a year ago. In the quarter the Ducato model gained for the first time leadership in its relevant segment. A negative share performance in both domestic and European markets is fairly attributable to the significant fleet contracts signed in Italy in 2011. Fiat professional gained 10 basis point of share in Europe excluding Italy. Fiat Professional began accepting orders for the new Doblò XL whose interior volume, the largest in the range, benefits from the vehicle’s long wheel-base and high roof. Moving onto slide 26, the Luxury & Performance brands continued to perform well. In Q2, ‘12, Ferrari shipped a total of 1,931 street cars, representing a 4% increase over a year ago. A growth was primarily driven by sales of 12-cylinder models, which were 58% up over the prior year on the back of the contribution from the new FF. North America remained Ferrari’s number one market with shipments up 13.6% over the prior year to 509 vehicles. In EMEA, volumes were substantially in line with Q2, 2011 with a total of 966 cars shipped. Performance in the U.K., Germany and Switzerland offset the significant decline in Italy. In Asia Pacific, shipments were higher in both China and Japan more than offsetting the reduction registered in Australia. In other markets, performance was substantially in line with Q2, 2011. Ferrari reported 650 million in revenues, a 10.7% increase over the same period in 2011 and a 14.1% trading margin with a trading profit of €92 million. The 12% increase in trading profit was attributable to volumes as well as to good results from the personalization program and licensing activities. Maserati shipped a total of 1,762 cars during the quarter, up approximately 1% with significant increases in the U.S., China and the Middle East, but a 40% decline in Europe. Maserati posted revenue of 170 million for the quarter and the trading profit was 11 million, an increase of 2 million over Q2, 2011. Page 27 shows the performance of Components and Production systems, activities in Europe from Magneti Marelli were influenced by severe weakness in Italy further accentuated by the LCV segment contraction. Outside Europe there is a positive trend in NAFTA and China, while volumes in Brazil were down. Most business lines recorded revenue decreases with the exception of Lighting of 8% and Electronic Systems up 17%. Revenues totaled 1.5 billion, a 5% decline over the prior year. Trading profit was 37 million compared to 50 million for Q2, 2011. Teksid posted revenues of 204 million in Q2, an 18% decline over the same period with lower volumes for both the cast iron and aluminum business units. Trading profit was 3 million compared to 11 million for the same period in 2011. Revenues for Comau were 365 million, a 2.5% increase over prior year, which was mainly attributable to the Powertrain Systems operations. Order intake for the period was €300 million, representing a 4% increase over Q2, 2011. At June 2012, the order backlog totaled nearly €1 billion, a 17% increase over year end 2011. Trading profit totaled 7 million for the quarter compared to 3 million for Q2, 2011. On the right of slide 29, we show the name plate impact and brand impact which drove the increase sales of 86,000 units in the U.S. and Canada. All brands contributed to the growth, Chrysler driven by a 300 and 200 models and Fiat with the biggest gains with 66% and 124% growth respectively, followed by 19% increase for Jeep, 13% growth for Ram, Dodge being – was up 3% awaiting in all new 2003 Dart which is now arriving in dealerships. This new model encompasses power and fuel efficiency together with best-in-class technology and safety to complete – to compete in the single largest retail segment in both the U.S. and Canadian markets. Page 30, deals with recent market introductions in Brazil are continuously updated and innovative product offerings have been further rejuvenated with the launch in the quarter of the new Palio Weekend, the new Strada, the highest selling small pickup for the last 12 consecutive years in the Brazilian market and the refresh of the entry level Siena. Also Fiat brand recently received by best five buy awards ranging from the entry level model to the upscale minivan with Freemont. Page 31, with our (inaudible). June saw the start of production of the Fiat Viaggio manufactured by our joint venture with GAC. The Viaggio is the first locally produced vehicle for the competitive Chinese C-medium segment and is expected to arrive in dealerships in Q3 this year. The group is continuing to focus on re-launch of the Chrysler brand in China. The all new Chrysler 300C will return to Chinese dealerships in July with the Chrysler Voyager to follow in Q4. In this quarter, the Jeep Grand Cherokee SRT and Overland Summit edition will launch in the region. Slide 32, in Europe, Fiat continue pre-launch promotions of 500L having debuted exactly five years after the presentation of the iconic Fiat 500. This car will be available in the market in late Q3 in Italy to then progressively expand to all the other markets. During 2013, it will be on sale in more than 100 countries around the world, including the U.S. In June, the Lancia brand presented the new Flavia, an eye-catching, roomy 4-seat convertible, and in Q2, Jeep and largest offering with the powerful best handling Jeep vehicle over the Jeep Grand Cherokee SRT. Moving onto page 33, we take a more detailed look of how we expect the markets to evolve for the full year. Our prior guidance for the U.S. market for the full year was greater than 13.8 million vehicles, and now clearly after good first semester we see an improvement for the industry and expected to exceed the 14 million mark. Canada is confirmed that around 1.6 million vehicles for 2012. For LATAM, we expected the various stimulus measure implemented will be supportive of a positive market for the rest of 2012, therefore in line with the prior forecast we gave. APAC continues to be very strong with the industry where the Group is competing, slightly revised upwards to about 24 million units. The Group is targeting full year sales increase of around 40%. In EMEA, the adverse impact from the recession continued to make visibility of the European market progression, very difficult. In EU27+EFTA, we expect the passenger car industry to drop for the fifth consecutive year to approximately 12.7 million units with Italy as its lowest level since 1979. For the light commercial vehicle market, demand is expected to decline by about 10%. Moving on to page 34, Group shipments in the second quarter well in excess of 1.1 million units as I already mentioned, with growth of 20% in NAFTA, 70% in APAC, compensating for 13% decline in EMEA and 7% reduction in LATAM. The 2.1 million shipments in the first half are in line with our full year guidance of 4.1 million to 4.4 million units with EMEA at the low-end of guidance. On page 35, we have the full year guidance which remains unchanged. Based on our first half performance and despite the continuing uncertainty in the market in Europe, we’re confirming full year guidance. Volume to the first half were 2.1 million units and we confirm our target between 4.1 million to 4.4 million units for the full year. Trading profit for the first half was nearly 1.9 billion and net profit was 0.7 billion and that is also in line with our full year target. Net industrial debt for full year is confirmed between 5.5 billion to 6 billion. This concludes by remarks. Now, I’ll turn the call back to Mr. Marco Auriemma for any final comments, before the Q&A session. Thank you.

Thank you, Sergio. Sammy, now we are ready to start the Q&A session. Please go ahead. Thank you.

Ladies and gentlemen, today’s question-and-answer session will be conducted electronically. We will take your first question today from Charles Winston from Redburn Partners. Please go ahead, sir. Charles Winston – Redburn Partners: Yeah. Hi, good evening. Two questions for me. Just firstly, you commented on the Chrysler code in terms of your expectation for working capital in the third quarter probably being a negative at the cash level. Would you say that slightly as well in the Fiat cash flow as well or perhaps you could just sketch out your thoughts how working capital progress for the rest of the year? And then just relating to the net finance cost. I guess, as you say the increase in the Fiat related predominantly to the increase in net debt, therefore, this sort of run rate is likely to continue. Just a more open question really, which is a lot of the Group’s trading profit and value creation is being flattened off or redirected to debt capital providers, because of the liquidity in the cost of carry. What sort of conditions would you need to see to get that number down such that more of the value within the Group can attribute to equity holders as oppose to the debt capital providers as the business is currently structured? Thank you.

I’ll deal with the second question, because that’s really a question of the strategic question has to do with how much liquidity is held within the system. Based on what I know today about the way in which Europe – European markets are performing from an operating standpoint in terms of car sales and what we see in terms of sort of the uneven availability of capital market financing to a lot of resource. We have made the decision to effectively maintain what I consider to be at normally high level of liquidity for the foreseeable future. I don’t think that that objective is – has changed the view of what I see is the market dynamics to-date. I don’t expect that to change within 2012. And I think to be perfectly honest, I think we would have to see some clarity and some resolution of the much larger issues that are impacting the European trading zones before we made the decision to relinquish the liquidity and bring it back down to what I consider to be normalized levels. Richard, as of various locations repeated the Group stands that effectively we intent to maintain about 20% liquidity as a percentage of sales. That percentage does not – it does not changed when you compared to the numbers that we’re dragging around. Now we’re well above that number. And I tell you honestly I – we look at this on a consistent basis, I don’t know a single event that could possibly happen in the next four or five months that will change our positioning. And I think the level that for we required – that would be required out of the European environment to provide that comfort is pretty distant. I’m not criticizing anybody in the process. I just think that, as a corporate we have an obligation to ensure that we deal with market uncertainty. There is a high level of marketing uncertainty out there and that will continue to prevail and that’s impacting not just volumes on the car side, it’s impacting the operation of the capital market side. Richard and I shared with the board this morning some information on where corporate default swaps sit today, the way in which the market looks at this country in particular, the fact that we’ve been anomalous in our ability to finance outside of that plan, but it is clear that until that those issues resolve themselves, we’re going to hang on to the liquidity and I think we’ll pay the cost. And I think, the unfortunate consequence as we correctly pointed out is that it is a value attribution away from equity holders into debt financers. But contrary to what we had back in 2008 and 2009 when the debt markets were unavailable. For a variety of purposes there is – we continue have access, it’s not consistent access to the debt market, but the fundamental thing in evaluating the risk profile, let’s see it regardless of whether CFS access to the cash so those being generated inside Chrysler or not, is it in the process of managing Chrysler and the process of delivering on the targets that we have set for ourselves back in 2009. Even for this year we are creating substantial tangible value which is monetizable for see in any one point in time. And it goes beyond the question whether I have access to the cash resources that are being held within Chrysler. So the effort is worth – it is worth but it’s worth from a value creation standpoint, which ultimately will benefit the equity holders. But it is also essential in order to try and provide the couple of operating conversions that we talked about from time to time and which is necessary to create one global product company. I think it’s fair to say that when I look at the European situation I look at today’s time and I’m looking at incredibly hopefully non-recurring sets of events that are biasing our capital market formation for our purposes. They are going to continue to bias those choices for a reasonable period of time going forward. And the important thing is to ensure that we continue to provide all the liquids are required to maintain not an equal level of operating efficiency. I don’t see those conditions in the market today and as I said earlier I doubted very much that we will see them before the end of ‘12. Charles Winston – Redburn Partners: Very clear. Thank you. And on the working capital...

In terms of the working capital – I’m sorry – expected to be positive in the second half based on Brazilian market and continuing to improve as we mentioned earlier. And the European launches of versions of the Panda and the 500L also helping volumes. So we expect it to be flat to positive in the second half of the Fiat X Chrysler. Charles Winston – Redburn Partners: Great. Thanks.

Thank you. We now have a question from Richard Hilgert from Morningstar. Please go ahead. Richard Hilgert – Morningstar: Thanks. Good evening. Taking a look at the operating leverage in North America, you went from – you had a 19% increase in volume. You had about a 30% increase in revenue and about an 80% increase in EBIT. If you add a third shift to bring on additional volume, aren’t you paying a third shift premium for wages and would we expect or should we expect less operating leverage to come out of the North American operations going forward or are you doing something to keep those – keep that operating leverage and contribution margins up as volume ramps higher in North America?

Under normal circumstances the increased variable cost associated were running a third shift, is a very small percentage of the increased absorption of the fixed cost structural a bit of the installation. So net-net you are well ahead of where you would have been, if effectively you can maintain pricing or ramp third shift on standard bridge. Richard Hilgert – Morningstar: Okay. And in Brazil...

So just to complete the story, if you are going to run these things at a 100% technical capacity, you should be able to mint money in the absence of pricing distortion. Richard Hilgert – Morningstar: Okay. In the Brazilian market, you lost a point or two a share with the tariffs that they’ve implemented down there. I might have thought that you might have maintained share in that market, I am curious, are your competitors ramping up more production capacity inside of Brazil and that’s the dynamics that’s going on there?

I think, the EMEA – we haven’t given enough time to the incentives to work for the system. Richard made reference of the fact that these things were introduced at the end of May. We have begun to see a phenomenal increase in debut rate of sales across the Brazilian market within June, and certainly a trend of this continue in July. And so I don’t – to be perfectly honest, I am not sure that we have – that we have seen the benefit of these measures. I think you need to see Q3 before you can make that determination, issue number one. Issue number two, one of the things that we have done is that we have maintained a high level of pricing discipline in the market place to avoid a deterioration of the brand equity associated with the Fiat brand in Latin America, which is uniquely high and I think, it would have been disastrous, if we have followed what I consider to be mercenary activities on pricing. So we have cut back where required and it’s a strategy that has paid off in review of what’s happened down in terms of the incentives coming on. There are a number of car companies that have announced capacity installations in Brazil. To be honest with you, we keep on monitoring this pretty carefully. I am not sure how many of these are just pure threats of installations as opposed to real, shovels being applied to the ground. I know we’re proceeding – it’s only following the review that we’ve had in Latin America in the last three weeks. And the last review that we have last wakened with our investment up in the state of Pernambuco. I think it’s crucial indeed of what we considered to be the development of the both, the product portfolio and the size of the market that deserve going forward, I think will be in market by sometime within 2014. I’m not aware – I’m aware of few of those relations that will be up at around similar – at similar time, but I don’t see any disastrous dislocation of capacity coming on at least none of which will be on related to expected market increase. Richard Hilgert – Morningstar: Okay. Thank you. On the WCM having made 250 cost savings in the first half, 400 still being the full year target is most of that in the North American segments since you’ve been implementing that over the last 12 to 18 months?

Yes. Richard Hilgert – Morningstar: Okay. Great. Thank you.

Thank you.

Thank you. We will now go to our next question from Martino De Ambroggi from Equita. Please go ahead. Martino De Ambroggi – Equita: Yeah. Thank you. Good afternoon, good morning everybody. The first is the strategic question on the new alliances you are working on. Should we expect yearly industrial collaboration like common platform as we already saw in the recent past or you are also exploring or maybe not now but you believe it could be possible to find strict reliance including share drop, why not maybe including also Chrysler in these kind of deals. This was my first question. The other two are concerning pricing evolution in Latin America, just to have on a – what’s your view on it? And on the EMEA mass market losses, what should we expect in the second half as a trend for the second half of this year? Thank you. Martino De Ambroggi – Equita: Now, let me deal with the first two and then I’ll pass it on to Richard to deal with the expectation on EMEA. I mean the Mazda relationship is a technical collaboration, there has been – there have been no other discussions that have gone on. I don’t see much value in share swaps, to be honest, other than therefore symbolic value. I think every – all the ones that I’ve seen has not worked on a well and I certainly don’t want to sort of jinx what appears to be a pretty promising collaboration on a technical scale into something that could have sort of negative – a negative appearance going forward. We’re happy working with Mazda on the basis that we’ve announced I think the collaboration will stay. It’s certainly based a lot on today on a pure technical basis. Pricing in Latin America is restoring to 2011 levels. At the early part of 2011, I think they were seeing a restoration of margins to reasonable levels and it’s the basis on which we’re able to confirm performance for 2011 in line with the target that we said which is in excessive of a 1 billion in Europe. So I – overall, I think we’re going back to a state of normality after this location of – certainly the last second semester of 2011 in the first half of 2012. So it was a steady state and fundamentally a return to what we’ve been experiencing in Latin America over the last two or three years. On the third question, I’ll pass it on to Richard.

So our first half loss was about €350 million trading profit in EMEA and obviously from Q1 to Q2 you saw an improvement there from over 207 to 238 million. So we improved about 70 million in the quarter. In the second half our target would be to continue to improve the loss compared to 350. How far we’ll get we’ll see. But clearly we have some product launches and we continue to manage the cost base very aggressively and you can see the results of that in Q2. Martino De Ambroggi – Equita: Okay. Thank you.

Thank you. We now have a question from Fraser Hill from Bank of America. Please go ahead. Fraser Hill – Bank of America: Hi, good afternoon, Fraser Hill from Bank of America. Just got two questions here – sorry in fact three. Starting from the financing line, we’ve seen a lot of variability there and that jumped quite substantially in Q2 versus Q1. Could you just kind of run us through the delta between the 375 in Q1 and 453 in Q2 and provide us with some guidance as to what you expect going into the quarters in H2? Secondly again sort of housekeeping here, but, but on tax as well that’s jumped from 27 to 33. I just wondered what your expectations were there going forward and what you would guide that might be sustainable for us to model going forward? And then finally just looking at the EMEA bridge, I don’t see stripping up this restructuring for Q2. Are there any other restructuring elements that you think could come into the numbers in Q3 or Q4? And I guess, on the flipside of that, you had quite a descent improvement or rather reduction in your fixed costs. I just wondered what we should expect for that going forward as well. I mean, you saw a 64 million benefit there in your cost reduction efforts. How are you thinking about that for the second half of the year? Thank you.

In terms of interest charges, the full group number of 460 for the quarter is probably a reasonable run rate for the year. The increase over last year is clearly – basically due to our higher level of net debt in part because of the operating performance. We burn cash obviously in the first half of this year on the Fiat side. And in part because of the investments in Chrysler that were made last year half way through. And the other part of the question related to taxes, we have some increase in taxes as we make more money on the Chrysler side. Slightly offset by reduction on the Fiat side because of the lower Latin America operations. In the second half of the year, we think Latin America is going to improve, but I don’t think there is going to be a substantial difference in taxes from the first half to the second half. I missed your third question. I apologize. Fraser Hill – Bank of America: Yeah. Just kind of, I’m trying to get a sense of any potential further restructuring cost to come into for the numbers in the second half. I’m just thinking about the 93 million we saw in Q2.

Yeah. But that was – sorry, go on. Fraser Hill – Bank of America: Yeah. And I can see that was a one-off, I just wondered are there any other sort of actions that you think you’re going to be taking or could be for charges? And then on the flip side, looking at the gains that you’ve made on improvements in the industrial cost, the 64 million I just wonder how incremental that line could be going forward from this point or that future gains they come through in the second half?

Well, we continue to push very hard on the efficiencies on the NAFTA side as we run those plants full – to the capacity on a two shift basis, and we also will have strong performance in the second half in Brazil. So, we expect to continue to generate efficiencies on the industrial side. On restructuring, we’re going to get back to you in – at the end of Q3 with our revised plan. Whether that will or will not include some restructuring, we’re working it. Fraser Hill – Bank of America: Thanks.

Thank you.

Thank you. We now have a question from Jochen Gehrke from Deutsche Bank. Please go ahead. Jochen Gehrke – Deutsche Bank: Yes. Good afternoon. Two quick questions from me. Firstly on LATAM, obviously you highlighted many times today that you’re quite comfortable for the second half. As I – as far as I understand the tax changes at least on the EP tax are set to expire by August, why are not more concerned about what we see now in the last couple of months have created a bit of pull forward demand than that actually in the second half of the year post the expiry of the tax change, we could see going backward or temporarily even worse trend and what we had prior to that? And then secondly, Mr. Marchionne, in the last call, I think you talked a lot about capacity reduction needs in Europe and the point of first mover disadvantage, I wonder if you could just update us. And we obviously have seen some of your competitors announcing plant closures and the political backlash was huge, do you feel that this first mover disadvantage has gone now and that we’re moving faster? And on that point, what do you think really the players with a weaker utilization rates in Europe can do to convince, the ones with a higher utilization rates to contribute to the needed capacity reduction in the European arena? Thank you.

I’m going to try and give you an answer of second question, your question is incredibly complex in nature and I wish I had an easy answer for you. And I’m not sure that my suggestions are – I ever suggested the people that have high utilization rates, should be offering our plants foreclosure fundamentally you’ve got – when you’ve got proper utilization of those assets, it has never been the case, the issues is a jurisdiction of our location, and it’s not – it really has nothing to do with particular players in the marketplace doing anything. The issue with a first mover disadvantage and we have seen as you said, as you correctly pointed out reactions, which have been pretty clear and in some cases pretty vocal. From a variety of social actives and jurisdictions where these closures have been announced, which really reflect a level of concern, which is ought to be shared across the European wide basis, and the only comment that I ever made in connection with this is that in an environment where you’ve got multiple countries that are effectively – that are actually are the repository of excess capacity. It will be wise to avoid penalizing any one player and therefore putting that player in that geographical jurisdiction in a phenomenal disadvantage against the others. And if this was coordinated, then I would assume having seen what I – the distribution of production plans across Europe. There will be a number of countries that will be participating in the reduction and ultimately that allocation, which reflected some principles of equity and fairness until the distribution will benefit the collective good. The thing that I find disturbing in this environment is that people see this as being somewhat a necessary in sort of – in the phase of (inaudible) for the country. It’s an issue which has been plaguing us for a long period of time. We’ve made reference for the fact that and I and Richard has – as I have done on previous occasions, but the fact that the European market is now heading for a fifth straight year of decline – year-over-year declines and we’re now seeing levels in the Italian market, which have not been seen since 1979. So, we’re all starring at this – what I consider to be very suitable evidence of market decay, the numbers are the numbers. The question that you can ask yourselves is this a permanent decay or is it – or is it a temporary transient sort of decline in volumes because of natural fluctuation in GDP. If you firmly believe that this is a part of a short lived economic cycle then I think that anybody can sit back and just use the social mechanisms are available in various jurisdictions to try and deal with that lack of demand and adjust capacity accordingly. If on the other hand as I do and a number of other players believe that there is a structural overcapacity in the system which is causing really distorted result in terms of operating performance. We have seen this and by the way you can read a number of studies that are being done on this. So by the fact that the automotive industry has historically not been able to earn its cost to capital over extended period of time. This is not due to the inability of carmakers to run business as properly. It’s a reflection of the cost associated with the investment, the cost associated with the production of the products and the selling price in the marketplace. It’s not – you don’t have to get a Ph.D in economics to figure out fundamental supply demand economics. And what you got here is the retention of margins across the wide brand, a white portion of the mass market in Europe, which is not allowing for the recovery of the capital cost associated with investments, which is also a reason why the capital markets have been incredibly reluctant to continue to finance its operation, because they do not understand how the cycle, the circle is going to close. And by the way, for anybody who is looking for a practical application of that system, the only thing I’d suggest people do is look at the American example, which is live through this in its raw from back in 2008 and 2009, where all the inefficiencies of the system. Overcapacity, dysfunctional pricing, all those issues came to the table, all at once when the market collapsed. And what we are beginning to see now is a frail to the system because we never added, quickly moved on this. And so the only thing I – if Europe is to exist as a common market then I think it is the interest- in the interest of the European Union to act as a coordinator or be rational equitable allocation of the reduction, is it is the only way in which national interest will not be hurt by the process. If we do not do this we’ll leave it to particular companies and particular member states they carry this out and this whole question of animosity, European context which is already finding a very difficult to find cohesion is even – is going to be almost impossible. And so the request that the European Union is to take that on as opposed to take on free-trade discussions with Japan which in a market – which is declining and has declined for the last five years is the most inappropriate moves to possibly make. This is not the time to start entertaining. To start entertaining free-trade agreements, it is a European context that could never ever would stand the attack of really move of trade barriers from a country like Japan which is already low on capacity. And so these things need to be – we need to coordinate the efforts here otherwise somebody is going to pay huge price for this. And the last thing we want is a structural technical savior of one of the players because our ramifications are relatively large. And so I keep on raising this issue is being an important element of intervention. I read even the Anglo-Saxon press that suggests that member country should be left of their own means to try and deal with this. I think as much as I’m believing free market, I also believe that there is value in the European Union carrying out – carrying out the particular act of market coordination in events like this. If it doesn’t happen, then I think we’re going to leave the car companies in a particular states and incredibly vulnerable position and that’s not the role of the European Union. Not if we believe in the European Union in a single market, it just cannot happen. So, I reiterate the call for that to happen, regardless of what I understand that with just not an unanimous view across auto builders across Europe, but certainly for the majority of people who are involved in what I consider to be a very difficult market in 2012 as a continuation of 2011 and 2010, I think it’s an incredible wise suggestion. On the first question, I will pass it on to Richard.

So as you mentioned that the two elements, I think to the – seamless measures. One is the reduction in IPI and the other is an improvement in credit approval levels and availability together with obviously reduction in interest rates occurred. In terms of the reduction in IPI you are right, the – the law initially will expire in August. Based on our experience when a similar program was put into place in 2009 but rightly, it’s not going to pull off a clear from one month to the next is that law actually was reduced by 50% before it was further reduced. So we would expect a gradual reduction in the IPI measure not a truncation in – at the end of August based on past experience we will see. But even that aside clear – another big piece of the thing was the increasing credit availability and approval rates from the bank – banking system, which would continue in our opinion for the rest of the year?

As regard to the fact that putting forward demand, this isn’t a developed market. So to some extent, I think not being a replacement market, these types of measures obviously stimulate the amount, but I am not sure that it has the same effects on the demand curve as those some measures having the more developed economies in such as Europe or the U.S. Jochen Gehrke – Deutsche Bank: Thank you.

Thanks.

Thank you. We have a question now from Massimo Vecchio from Mediobanca. Please go ahead. Massimo Vecchio – Mediobanca: Yes, good evening. My first question is on CapEx, you indicated that the amount spent in the first half is like 45% of the full year, so clearly indicating 7 billion for the full year, which we’ll imply 4 billion in the second half, which seems very high number, do we have to consider this 7 billion the maximum amount your spending CapEx, or it’s insuring precise indication, that’s the first question. Second question is actually a follow-up on the previous question over capacity. You stated to the press that with the current market conditions in Europe, you may be thinking about closing a plant in Italy, I was just wondering if you can expand on that and if you have a deadline in terms of timing on this issue? Third and last question is the new Punto, having mind the timing on the replacement, do you have any thoughts on that as to this product be profitable with the current pricing environment or not? Thanks.

I can tell you right now just to deal with the questions, asked backwards. The Punto today, any last time we make a Punto, we never ever return capital. So we’re going to sit on the sidelines until we can find better conditions and while – there is been a huge amount of work that’s going on since we last spoken on the conference call about architecture development and utilize these shared these across geographies. I think we feel relatively comfortable now that we found for a variety of related and unrelated reasons technical solution that we would be able to support a much higher volume extraction of the architecture – out of the architecture investment. Having said this, we’re going to reserve the right to come back and then deal with all this issue in the third quarter including your second question which has to do with capacity utilization and plants and so on. And I think these are – all this questions need to wait until we have a better read of the European market development until we get a better read of Europe as a whole. These I think a lot of is – a lot of confidence is going to come from the proper resolution of European wide matters, which really have nothing to do with car making. But – and I don’t think we should look at these as being independent of the larger macroeconomic issues that we’re also facing in this trading block. So I think we all have to wait until the end of October to come back and when we get together on October 30th. And on the first question I’ll passed it on to Rick.

As precise as I can be in a forecast, I think the €7.5 billion is a good number, and also in the large part, because we’re spending significant money in NAFTA on the product actions we discussed on the Chrysler call and I think which you’re aware of. And also we’re starting spend money in Latin America on the Pernambuco project. Massimo Vecchio – Mediobanca: Thank you very much.

Thank you.

Thank you. We now have a question from Philippe Houchois from UBS. Please go ahead. Philippe Houchois – UBS: Yes. Good evening. Two questions. One is Mr. Marchionne, I’ve asked you the question before and you’ve been very clear. I’m putting pressure, I think, in your ability to refinance constantly. And has something changed in your relationship with your financing in the sense have you had to pledge assets or provide collateral to a point beyond as you’ve done in the past?

No. Philippe Houchois – UBS: No, okay. And the second question is its fair to assume that the cost of buying, the 3.3% of Chrysler would be around $400 million?

No. Philippe Houchois – UBS: Higher or lower?

No. Okay. Philippe Houchois – UBS: Okay.

We’re not going to try and establish the size of the brand box. We’re in negotiation with VEBA. I mean, if we put them on the call we can have a three-way, but... Philippe Houchois – UBS: Yeah.

I suggest we have a two-way first and then let you know, what do you think? Philippe Houchois – UBS: That’s fine. Okay. So when, by the end of the quarter though. It certainly takes forever, yeah.

Hopefully not. No. Philippe Houchois – UBS: Yeah. Okay. Great. Thank you.

That would conclude the question-and-answer session. I would now like to turn the call back over to Marco Auriemma for any additional or closing remarks.

Thank you, Sammie. We would like to thank everyone for joining the call today. We’ll be communicating shortly. Bye.

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