2006 Annual Report - Fiat SpA
2006 Annual Report - Fiat SpA
2006 Annual Report - Fiat SpA
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<strong>Fiat</strong> Powertrain Technologies<br />
Operating Performance<br />
Since January 1, <strong>2006</strong>, the <strong>Fiat</strong> Powertrain Technologies Sector<br />
(FPT) no longer comprises only the passenger vehicle engine<br />
and transmission activities, over which <strong>Fiat</strong> regained control in<br />
May 2005 following termination of the Master Agreement with<br />
General Motors, but also the powertrain activities that were<br />
included in the Iveco Sector until December 31, 2005.<br />
As envisaged in IAS 14 – Segment <strong>Report</strong>ing, the figures for<br />
2005 have consequently been reclassified, by assigning the<br />
former Iveco powertrain activities to <strong>Fiat</strong> Powertrain<br />
Technologies.<br />
Since <strong>2006</strong>, <strong>Fiat</strong> Powertrain Technologies also comprises<br />
the powertrain research activities of C.R.F. In addition, within<br />
the framework of its technological development projects, FPT<br />
coordinates Elasis powertrain activities.<br />
<strong>Fiat</strong> Powertrain Technologies activities in the passenger<br />
vehicle engine and transmission segment are organized into<br />
the Passenger & Commercial Vehicles (P&CV) product line.<br />
The former Iveco powertrain and axle activities were assigned<br />
to the Industrial & Marine (I&M) product line.<br />
Part of the Sector’s output was sold to other <strong>Fiat</strong> Group<br />
Sectors, while sales to third parties and joint ventures<br />
represented approximately 26% of revenues in <strong>2006</strong>. In <strong>2006</strong>,<br />
the Sector benefited from the rising sales volumes of its<br />
principal customers, particularly <strong>Fiat</strong> Auto, reporting growth<br />
of 11% on a comparable basis from the previous year.<br />
The Passenger & Commercial Vehicles product line sold<br />
2,328,000 engines in <strong>2006</strong>, approximately 22% of which<br />
were diesel engines sold to General Motors and Suzuki,<br />
and 1,695,000 transmissions, mainly sold to <strong>Fiat</strong> Auto.<br />
The Industrial & Marine product line sold 444,000 engines<br />
(+1.9% from 2005), mainly to Iveco (44%), CNH (19%), and for<br />
24% to Sevel, the joint venture between <strong>Fiat</strong> Auto and the PSA<br />
Group. Furthermore, 113,000 transmissions (-1.4%) and<br />
262,000 axles (+9.3%) were sold.<br />
Several important agreements reached by the <strong>Fiat</strong> Group with<br />
international partners involved <strong>Fiat</strong> Powertrain Technologies.<br />
74 <strong>Report</strong> on Operations <strong>Fiat</strong> Powertrain Technologies<br />
Highlights<br />
(in millions of euros) <strong>2006</strong> 2005<br />
Net revenues 6,145 4,520<br />
Trading profit 168 109<br />
Operating result (*) 102 81<br />
Investments in tangible and intangible assets 254 296<br />
- of which capitalised R&D costs 50 60<br />
Total R&D expenses (**) 74 68<br />
Employees at year-end (number) (***) 18,924 18,161<br />
(*) Including restructuring costs and unusual income (expenses).<br />
(**) Including R&D capitalised and charged to operations.<br />
(***) Including Iveco employees of the powertrain activities conveyed in FPT: 8,256<br />
at December 31, <strong>2006</strong> and 8,050 at December 31, 2005.<br />
In December <strong>2006</strong>, FPT, Iveco and SAIC Motor Corporation<br />
signed an agreement to establish a long-term partnership<br />
in China in the field of medium and heavy diesel engines.<br />
Industrial plans include the manufacturing of three different<br />
medium and heavy engine ranges: F5, NEF (4 and 6 cylinder<br />
versions), and Cursor 9.<br />
An agreement was initialled towards the end of the year with<br />
the Indian Tata Motors Group. It envisages production in India<br />
of the small diesel engine (SDE), Fire family gasoline engines,<br />
and transmissions.<br />
In December <strong>2006</strong>, FPT and the Russian company Severstal<br />
Auto announced the signing of a Memorandum of<br />
Understanding for the establishment of a joint venture in<br />
Russia to produce the F1A diesel engine to be installed on the<br />
<strong>Fiat</strong> Ducato and homologated for Severstal Auto’s new SUV.<br />
Innovation and Products<br />
Passenger & Commercial Vehicles<br />
During the year, work continued on developing innovative<br />
powertrains for <strong>Fiat</strong> Auto, to be used on <strong>Fiat</strong>, Lancia, and Alfa<br />
Romeo branded cars.<br />
In the gasoline engine segment, efforts continued to focus on<br />
development and initial industrialisation of turbo versions in<br />
the Fire family, in the 120hp and 150hp versions for the <strong>Fiat</strong><br />
Bravo and <strong>Fiat</strong> Grande Punto models.<br />
In the methane engine segment, activity continued with<br />
introduction of the Fire 1.2 CNG (Compressed Natural Gas)<br />
engine to be used on the Panda.<br />
In the diesel engine area, the number of versions offered with the<br />
diesel particulate filter (DPF) was increased and development on<br />
the new 1.6 Diesel continued, with production to start soon.<br />
In the transmission segment, Q2 content was developed<br />
for the C530 6M gearbox, to be used on the Alfa Romeo 147 and<br />
GT models. This will offer driving and safety performance on<br />
two-wheel drive cars that is similar to cars equipped with fourwheel<br />
drive.<br />
During the year, production of the transmission made at<br />
the Termoli plant and sold to Sevel got underway. This<br />
transmission is used not only on the Ducato but also on<br />
the commercial vehicles of the Peugeot and Citroën brands.<br />
For the future, work will continue on developing the<br />
technological leadership of the common rail engine (latest<br />
generation Multijet), relaunching the Fire family and gasoline<br />
engines in general, improving quality, and reducing fuel<br />
consumption. Development of the new 2.0 Diesel engine,<br />
extension of supercharging to other families of gasoline engines,<br />
including in tandem with fuel injection, and development of<br />
innovative content for transmission systems point in this<br />
direction.<br />
Huge resources were allocated in <strong>2006</strong> for the development<br />
of cutting-edge powertrains in terms of exhaust emissions.<br />
These involve projects aimed at compliance with the Euro 5 and<br />
Euro 6 standards. The target date for start of production on Euro<br />
5 powertrains is the second half of 2008, in advance of the<br />
deadlines envisaged in applicable EU regulations.<br />
In view of cutting CO 2 emissions, and thus fuel consumption,<br />
the CAFE (Corporate Average Fuel Economy) plan agreed on with<br />
<strong>Fiat</strong> Auto continued. This will make it possible to respect the fuel<br />
consumption limit self-imposed by European car makers.<br />
Industrial & Marine<br />
The product line’s objective is to design and manufacture<br />
engines for vehicle applications (on-highway) and industrial<br />
and agricultural applications (off-highway).<br />
In <strong>2006</strong>, the product line initiated production of all versions<br />
of Euro 4 diesel engines for automotive applications and gas<br />
versions for urban mass transit.<br />
In the light-range engine segment, FPT- I&M started production<br />
on the F1A 2.3 litre 136hp and F1C 3 litre up to 176hp engines<br />
that equip the Daily and the Ducato. Versions equipped with<br />
the diesel particulate filter were also developed. These reduce<br />
emissions of the solid particles typical of diesel engines almost<br />
to zero.<br />
The 4 and 6 cylinder Tector engines in the medium-range<br />
segment, and the Cursor 6 cylinder 8, 10, and 13 litre range<br />
in the heavy engine segment, were made also Euro 5<br />
compliant, in advance of the effective date of the standard,<br />
scheduled for 2009.<br />
For off-highway applications, the NEF 4 and 6 cylinder<br />
common rail engines that comply with TIER 3 pollution<br />
standards were introduced. A new engine is being developed<br />
for CNH, that will be used on agricultural and industrial<br />
equipment with a power of up to 100hp. For this engine,<br />
evolutions in its design are planned so as to bring it in<br />
compliance with TIER 4 stage 1 limits, which will come into<br />
effect in 2012. Beginning from the second half of <strong>2006</strong>, the<br />
CURSOR range for agricultural and industrial applications has<br />
been expanded to embrace a version that has adopted the<br />
common rail injection system for the first time in this range.<br />
Looking to the future, FPT - I&M plans to reinforce its<br />
technological leadership in the field of engines for the whole<br />
range of truck, agricultural, industrial, and marine applications<br />
and complete development of the technologies that will be<br />
necessary to meet future legal limits on pollution, while also<br />
reducing fuel consumption.<br />
<strong>Report</strong> on Operations <strong>Fiat</strong> Powertrain Technologies 75