Chrysler 2006 Annual Report Download - page 39

Report on Operations Fiat Powertrain Technologies 75
In the methane engine segment, activity continued with
introduction of the Fire 1.2 CNG (Compressed Natural Gas)
engine to be used on the Panda.
In the diesel engine area, the number of versions offered with the
diesel particulate filter (DPF) was increased and development on
the new 1.6 Diesel continued, with production to start soon.
In the transmission segment, Q2 content was developed
for the C530 6M gearbox, to be used on the Alfa Romeo 147 and
GT models. This will offer driving and safety performance on
two-wheel drive cars that is similar to cars equipped with four-
wheel drive.
During the year, production of the transmission made at
the Termoli plant and sold to Sevel got underway. This
transmission is used not only on the Ducato but also on
the commercial vehicles of the Peugeot and Citroën brands.
For the future, work will continue on developing the
technological leadership of the common rail engine (latest
generation Multijet), relaunching the Fire family and gasoline
engines in general, improving quality, and reducing fuel
consumption. Development of the new 2.0 Diesel engine,
extension of supercharging to other families of gasoline engines,
including in tandem with fuel injection, and development of
innovative content for transmission systems point in this
direction.
Huge resources were allocated in 2006 for the development
of cutting-edge powertrains in terms of exhaust emissions.
These involve projects aimed at compliance with the Euro 5 and
Euro 6 standards. The target date for start of production on Euro
5 powertrains is the second half of 2008, in advance of the
deadlines envisaged in applicable EU regulations.
In view of cutting CO2emissions, and thus fuel consumption,
the CAFE (Corporate Average Fuel Economy) plan agreed on with
Fiat Auto continued. This will make it possible to respect the fuel
consumption limit self-imposed by European car makers.
Industrial & Marine
The product line’s objective is to design and manufacture
engines for vehicle applications (on-highway) and industrial
and agricultural applications (off-highway).
In 2006, the product line initiated production of all versions
of Euro 4 diesel engines for automotive applications and gas
versions for urban mass transit.
In the light-range engine segment, FPT- I&M started production
on the F1A 2.3 litre 136hp and F1C 3 litre up to 176hp engines
that equip the Daily and the Ducato. Versions equipped with
the diesel particulate filter were also developed. These reduce
emissions of the solid particles typical of diesel engines almost
to zero.
The 4 and 6 cylinder Tector engines in the medium-range
segment, and the Cursor 6 cylinder 8, 10, and 13 litre range
in the heavy engine segment, were made also Euro 5
compliant, in advance of the effective date of the standard,
scheduled for 2009.
For off-highway applications, the NEF 4 and 6 cylinder
common rail engines that comply with TIER 3 pollution
standards were introduced. A new engine is being developed
for CNH, that will be used on agricultural and industrial
equipment with a power of up to 100hp. For this engine,
evolutions in its design are planned so as to bring it in
compliance with TIER 4 stage 1 limits, which will come into
effect in 2012. Beginning from the second half of 2006, the
CURSOR range for agricultural and industrial applications has
been expanded to embrace a version that has adopted the
common rail injection system for the first time in this range.
Looking to the future, FPT - I&M plans to reinforce its
technological leadership in the field of engines for the whole
range of truck, agricultural, industrial, and marine applications
and complete development of the technologies that will be
necessary to meet future legal limits on pollution, while also
reducing fuel consumption.
Operating Performance
Since January 1, 2006, the Fiat Powertrain Technologies Sector
(FPT) no longer comprises only the passenger vehicle engine
and transmission activities, over which Fiat regained control in
May 2005 following termination of the Master Agreement with
General Motors, but also the powertrain activities that were
included in the Iveco Sector until December 31, 2005.
As envisaged in IAS 14 – Segment Reporting,the figures for
2005 have consequently been reclassified, by assigning the
former Iveco powertrain activities to Fiat Powertrain
Technologies.
Since 2006, Fiat Powertrain Technologies also comprises
the powertrain research activities of C.R.F. In addition, within
the framework of its technological development projects, FPT
coordinates Elasis powertrain activities.
Fiat Powertrain Technologies activities in the passenger
vehicle engine and transmission segment are organized into
the Passenger & Commercial Vehicles (P&CV) product line.
The former Iveco powertrain and axle activities were assigned
to the Industrial & Marine (I&M) product line.
Part of the Sector’soutput was sold to other Fiat Group
Sectors, while sales to third parties and joint ventures
represented approximately 26% of revenues in 2006. In 2006,
the Sector benefited from the rising sales volumes of its
principal customers, particularly Fiat Auto, reporting growth
of 11% on a comparable basis from the previous year.
The Passenger & Commercial Vehicles product line sold
2,328,000 engines in 2006, approximately 22% of which
were diesel engines sold to General Motors and Suzuki,
and 1,695,000 transmissions, mainly sold to Fiat Auto.
The Industrial & Marine product line sold 444,000 engines
(+1.9% from 2005), mainly to Iveco (44%), CNH (19%), and for
24% to Sevel, the joint venture between Fiat Auto and the PSA
Group. Furthermore, 113,000 transmissions (-1.4%) and
262,000 axles (+9.3%) were sold.
Several important agreements reached by the Fiat Group with
international partners involved Fiat Powertrain Technologies.
In December 2006, FPT,Iveco and SAIC Motor Corporation
signed an agreement to establish a long-term partnership
in China in the field of medium and heavy diesel engines.
Industrial plans include the manufacturing of three different
medium and heavy engine ranges: F5, NEF (4 and 6 cylinder
versions), and Cursor 9.
An agreement was initialled towards the end of the year with
the Indian Tata Motors Group. It envisages production in India
of the small diesel engine (SDE), Fire family gasoline engines,
and transmissions.
In December 2006, FPT and the Russian company Severstal
Auto announced the signing of a Memorandum of
Understanding for the establishment of a joint venture in
Russia to produce the F1A diesel engine to be installed on the
Fiat Ducato and homologated for Severstal Auto’s new SUV.
Innovation and Products
Passenger & Commercial Vehicles
During the year, work continued on developing innovative
powertrains for Fiat Auto, to be used on Fiat, Lancia, and Alfa
Romeo branded cars.
In the gasoline engine segment, efforts continued to focus on
development and initial industrialisation of turbo versions in
the Fire family, in the 120hp and 150hp versions for the Fiat
Bravo and Fiat Grande Punto models.
Report on Operations Fiat Powertrain Technologies74
Fiat Powertrain Technologies
Highlights
(in millions of euros) 2006 2005
Net revenues 6,145 4,520
Trading profit 168 109
Operating result (*) 102 81
Investments in tangible and intangible assets 254 296
-of which capitalised R&D costs 50 60
Total R&D expenses (**) 74 68
Employees at year-end (number) (***) 18,924 18,161
(*) Including restructuring costs and unusual income (expenses).
(**) Including R&D capitalised and charged to operations.
(***) Including Iveco employees of the powertrain activities conveyed in FPT: 8,256
at December 31, 2006 and 8,050 at December 31, 2005.