Chrysler 2005 Annual Report Download - page 68

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Report on Operations Magneti Marelli
Operating Performance
Despite a lacklustre reference market in 2005, Magneti Marelli
increased its revenues by 2.0%, on a comparable basis. All of the
Sector’s business units contributed to this growth, booking major
orders for new car models which will make it possible to diversify
the customer portfolio even further. Highlights of the performance
of each business unit are outlined below.
Lighting Group
Revenues for 2005 totalled 1,261 million euros, an increase of
approximately 180 million euros in absolute terms. A significant
factor in this growth was the acquisition of MakoElektrik Sanayi Ve
Ticaret A.S. from the Turkish Koç Group, which took effect on
January 1, 2005.The company, in which Magneti Marelli already
had an equity interest, produces lighting, HVAC and
electromechanical equipment. On a comparable consolidation
and exchange rate basis, the increase amounted to 4.4%.
Though sales volumes were substantiallyunchanged in 2005, the
business unit was able to increase its revenues thanks to the
introduction of new products and changes in the high-tech product
mix. A significant boost came from the first-time application in
Europe of headlamps equipped with infrared sensors for night
vision enhancement, and the successful introduction of LED tail
lamp technology.
During 2005, orders were received from major European automakers
such as PSA,Volvo and Audi, while manufacturing operations got
under way in China.
Powertrain (Engine Control)
Revenues for 2005 totalled 788 million euros, a1.1% increase
over the previous year’s 761 million euros on a comparable
exchange rate basis.
During 2005 sales of diesel injection systems increased, and the
designing and prototyping works continued. Investment plans are
now being drawn up for a new injector design, dubbed the
Pico-Eco, which will consolidate and increase the business unit’s
market share in this area.
Among orders received during the year, special mention goes to
the complete JTD 1.3 diesel system for Fiat and General Motors
vehicles.
Cofap Automotive Suspension
Revenues for 2005 amounted to 1,052 million euros as against
1,011 million euros in 2004, a decrease of 0.5% from the previous
year’sfigures on a comparable exchange basis. Increased volumes
for the Panda in Poland offset declining sales in Italy, where the
market picked up again late in the year thanks to the
newly-introduced models, and to the Grande Punto in particular.
The business unit’s work on product innovation included developing
new mono-tube high pressure gas shock absorbers, and presenting
the technology to customers in the United States.
Gestamp Marelli Autochasis S.L., a joint venture with Spain’s
Metalbages, was established in February 2005.This agreement
reinforces the company’sability to serve customers with
manufacturing facilities in Spain, in particular Opel.
In Europe, important new orders were received from PSA
and Iveco.
Components
Magneti Marelli
Highlights
(in millions of euros) 2005 2004
Net revenues 4,033 3,795
Trading profit 162 165
Operating result (*) 127 148
Investments in tangible and intangible assets 313 280
-of which capitalised R&D costs 67 70
Total R&D expenses (**) 197 193
Employees at year-end (number) 24,213 21,868
(*) Including restructuring costs and unusual income (expenses).
(**) Including R&D capitalised and charged to operations.