Chrysler 2008 Annual Report Download - page 85

Report on Operations FPT Powertrain Technologies84
FPT Powertrain Technologies
In March, FPT signed an agreement with Chrysler LLC to
acquire 100% of the Tritec Motors plant located in Campo Largo
near Curitiba (in Paraná, Brazil). The Sector will produce both
gasoline and flex-fuel versions of a new range of mid-size
engines at this plant, expanding its product portfolio with a
family of leading edge and highly competitive engines.
As part of an agreement signed in June between Fiat Group
and OJSC-Sollers (formerly Severstal-Auto), a new 50/50 joint
venture was formed between FPT Powertrain Technologies and
the Russian company to produce F1A engines.
In July, FPT Powertrain Technologies acquired full control of
EEA (European Engine Alliance), the joint venture established
in 1996 with Cummins and New Holland to develop and
produce the NEF engine range.
In November, the new Jiading R&D Centre near Shanghai
officially started operations in line with FPT’s commitment to
consolidate its presence in China and the Asia-Pacific region.
The centre will become fully operational in 2009, and will
conduct both basic and advanced research for all engine
categories (gasoline, diesel, alternative), as well as
transmissions and axles.
Recognition received in 2008 included “Diesel of the Year”
awarded to the new F32 engine by
Diesel magazine at the
Samoter International Exhibition, while in South America FPT
Operating Performance
FPT Powertrain Technologies operates through two product
lines: Passenger & Commercial Vehicles (P&CV), which
produces engines and transmissions for cars and light
commercial vehicles, and Industrial & Marine (I&M), which
produces powertrains for application on trucks and agricultural
and construction equipment, as well as marine engines. FPT’s
activities also include engine and transmission research carried
out at Fiat’s research centre,
Centro Ricerche Fiat , and
co-ordination of Elasis’ research in those same areas.
The Sector’s positive performance in the first half of 2008 was
reversed by a sharp contraction in business in the final months
of the year, resulting in revenues for the full year being
substantially in line with 2007. The majority of FPT’s production
is sold to other Group Sectors, while sales to external
customers and joint ventures accounted for 22% of total
revenues in 2008 (24% in 2007).
The P&CV product line sold 2,353,000 engines in 2008,
representing a 9.4% decline, and 2,019,000 transmissions, 3.5%
lower than the previous year. Sales of diesel engines to
external customers accounted for approximately 14% of total
sales volumes for the year.
The I&M product line sold 545,000 engines for the year, an 8%
increase over 2007. Deliveries were mainly to Iveco (40%), CNH
(24%) and Sevel, a joint venture in the production of light
commercial vehicles (25%). In addition, I&M sold 106,000
transmissions (down 14.1% over 2007) and 272,000 axles
(down 9.2%).
During the year, FPT Powertrain Technologies signed several
new agreements and proceeded with implementation of
agreements signed in previous years.
In January 2008, a Protocol of Understanding was signed
between the Sector, the Region of Piedmont, the Province of
Biella and the City of Verrone to upgrade and expand the
Verrone plant where the new C635 transmissions will be
produced for mid-sized cars in manual, DDCT (Dual Dry Clutch
Transmission) and automated manual versions.
Highlights
(€ millions) 2008 2007
Net revenues 7,000 7,075
Trading profit 166 271
Operating profit (*) 162 257
Investments in tangible and intangible assets (**) 898 365
- of which, capitalised R&D costs 105 38
Total R&D expenditure (***) 141 70
No. of employees at year end (****) 20,507 19,876
(*) Includes restructuring costs and net unusual income/(expense).
(**) The increase in 2008 was due both to investments for new products (C635 transmission
and SGE engine) and expansion of production capacity.
(***) Includes capitalised R&D and R&D charged directly to the income statement.
(****) Also includes Iveco personnel employed at powertrain product lines transferred to FPT
(8,335 employees at year-end 2008 and 8,218 employees at year-end 2007).