less…is more! · dante giacosa (1960’s) september 15, 2009 iaa investor & analyst...

September 15, 2009 IAA Investor & Analyst Conference - Frankfurt 1

Less…is more!

Harald J. WesterGroup Executive VP & Chief Technical Officer


Developing products with excellence in speed, cost, quality, innovation

PRODUCT DEVELOPMENT

Group Engineering

Virtualanalysis

Standardizationstrategy

PRODUCT

Productagility

Leading-edge technologies

Safeguard of environment


Physical prototypesModifications

Development costs Time-to-Market

MORE

Quality & reliabilityResponsiveness to market trends

Less is…more!

LESS


Group EngineeringCentralized worldwide organization

Breaking-through new frontiers in product development process

Technology cross-fertilization

Job rotation

Culture of specialized competence centers

Complexity reduction & total quality control


BRAZIL• Customization• Local applications• Excellence in body

design• Low-cost development

center

TURKEY• Customization• Local applications• Low-cost development

center

CENTRALIZED ENGINEERING & DESIGN• Know-how, standard methods, tools, product

concept• Component, technical solution & architecture

standardization• Series development / main applications• Excellence in safety, noise &

vibration, weight, consumption

CHINA• Customization• Low-cost development

center

INDIA• Customization• Local applications• Low-cost development

center

Research Center• Innovation• Methodologies• Intellectual

property management

Group EngineeringExtension of organizational model

Fiat Group Automobiles


From page to screen

“Electronic brains will become fundamental to the creation of better

automobiles in the future”Dante Giacosa (1960’s)


Frontload virtual development in technical concept definition phase

Enhancing multifunction

integration and optimization in

Technical/ Technological development

Developing integration with Manufacturing

virtual development, involving also

Logistics & Quality

Productconcept

Technicalconcept

Technical / Technologicaldevelopment Tooling Process

validation Pre-series Ramp-up

Kick-off BriefingStart of seriesdevelopment

Technical validation Job 1

Modellaunch

Productconcept Execution & realization Pre-series Ramp-upTechnical

concept

Product development processKey role of virtual analysis

FROM...

...TO


Productconcept

Technicalconcept

Technical / Technologicaldevelopment Tooling Process

validation Pre-series Ramp-up

2 3 4 5 6 7 8 9 9.5 11 12 13 14 15 16 17 18 19 20 21 2322 24 25 26

• Significant changes in process organization in order to allow parallel phases of activities

• Integrated approach to marketing, engineering & manufacturing from earliest stage of development

• Early involvement of suppliers

1

13 Month2 3 4 5 6 7 8 11109 12 14 151

122 3 4 5 6 7 8 10 119 13 14 1615 17 181 Month

Month

Product development processBreaking-through new frontiers

Kick-off Briefing Start of seriesdevelopment

Technical validation Job 1 Model

launch

Stilo

500 Bravo

MiTo Delta


Small Gasoline Engine

Current average competitor

development time about 36-40

months

28 29 30 Month

Product development processBest practice across Group Sectors

Case IH Small Frame Magnum

16-month development from program approval

vs. previous standard of 24

months

1917 18161514 20 21 22 23 Month24

14 15 16 Month

Month3129 3028 32 33 34 35 36 40


Modular architecture

Powertrain

Additional common components

Total vehicle cost

Vehicle specific components

(model/branddifferentiation)

30-35%

25-30%

10-15%

25-30%

InvestmentDevelopment costs

Time-to-Market

MORE

Economies of scaleQuality & reliability

• Front & rear floors• Front & rear suspensions• Braking system• Steering system• HVAC• Front-seat structure• ...

• Airbags• Lighting• Brake disks• Instruments

• Engine• Transmission• Hot exhaust system• Gear shift

• Upperbody & closures• Interior trims, seat trim• Exterior trims• Dashboard• Front & rear lamps• Windows• ...

• Hinges• Locks• Sensors• ...

Standardization strategyTowards best practice in standardization, re-use & upgrade

LESS


Standardization strategyCost benefits in C-Segment

R&D and Capex product-related spending

(index)

Maximizing standardization of components, re-use & upgrade

100

50

41

32

Fiat Stilo (2001)• All new components

Fiat Bravo (2007)• Architecture carry-over• Fully new upperbody &

interiors

Lancia Delta (2008)• Architecture carry-over• Fully new upperbody• Partial carry-over of

interiors

New Alfa C-Segment (2010)• Full architecture

review & upgrade• Fully new upperbody

& interiors• Integration of new

powertrains


Less…is more!European benchmark

Industrial R&D expense*

(as % of Sales)

* Including R&D capitalized and R&D charged directly to P&L

Source: Fiat Group Annual Report; Goldman Sachs BMW, Daimler Group, PSA, Renault, VW

Fiat Group Automobiles (including FPT Powertrain Technologies)


Large economies of scale required to enable continued investment in development of products and markets

1 million vehicles per architecture for mass-production vehicles

Standardization strategyVolume leverage


Worldwide architecture standardization strategyIncluding partner volumes

Each of the 3 main architectures nearing or exceeding 1mn unit mark by 2014

Mini Small Compact

1 million units


# o

f fa

mili

esComponent standardizationHVAC module example


• High-volume architecture

• Volume leverage from component standardization

• Average savings for metallic, electrical & chemical components

Avera

ge s

avin

gs

Volume increase

Standardization strategyPurchasing efficiency range for single architecture (case study)


B-Pillar in 2 components:FEE600 DP 2.0 mmTRIP 800 1.8 mm

Previous solution Standardized solution

B-Pillar in a single component:Hot pressed HSS 2.0 mm

Piece costsaving

(€)

Investmentsaving

(€)

Piece weight reduction

(Kg)

~25% ~40% ~25%

Archetype standardizationB-Pillar example


4%

7%

16%

Hot pressed HSSFiat Grande Punto

Fiat 500

Fiat Bravo

Alfa MiTo

Archetype application & evolution


MOREFuel economyPerformanceRoominess

Maneuverability/handling

Less is…more!

LESSWeight

Inefficient space & layoutEngine displacementEngine power losses


Less is…more!


Vehicleweight

Performance

“old” generation

“new” generation

Design optimization

New materials

Improved space

efficiency

Fiatresponse

Regulations

Contents

Engine downsizing

Historic trend

Product agilityWeight evolution scenario


Fiat 500

Fiat Bravo

Alfa MiTo

-3%

-5%

-9%

Archetype application Evolution to lighter vehicles while same performance

Weight reduction vs. previous standard

Hot pressed HSSFiat Grande Punto


Reversing current trend of increasing size without compromising space & comfort

Vehicle architecture

Product agility through space efficiency “Form follows function”

Minimization of front

package

Optimization of passenger

compartment

Optimization of rear package &

boot volume


“The difference...makes the difference”

1987-91

1979-91

2008

2006


Leading-edge technologies


Diesel engines

MultiJet II offering reduced fuel consumption and emissions and enhanced acoustic comfort

Transmissions

New dry dual-clutch transmission providing improved fuel efficiency and driving comfort

New & upcoming powertrain innovations

Gas engines

MultiAir technology providing reductions of 60% in NOx and 40% in HC/CO emissions and significant improvement in fuel consumption and CO2emissions

New 2-cylinder, 0.9-liter family (65-105hp) representing excellence in downsizing with best-in-class power density and low-speed performance

• Equipped with MultiAir technology

• Available in naturally-aspirated, turbo-charged & CNG versions, ensuring optimum fuel consumption and CO2 emissions

2009

2010

2009

2010


Hybrids

• Technology based on Dual Mode hybrid transmission (automatic transmission + 2 electric motors) developed by a consortium (Daimler, BMW, Chrysler, GM)

• Technology upgrade available in medium term

Electric

• GEM/Pea Pod: Family of small, low-speed vehicles with plug-in and recharge battery

• Plug-in Battery Electric Vehicle: Electric cars with 40 to 100 mile range and plug-in and recharge battery

• Available in medium term, technology for electric automobiles with recharging unit consisting of conventional engine and generator

Hybrid & electric vehicles Sharing new technologies between Fiat Group & Chrysler


Best-in-Class sustainabilityA way of doing business which drives daily decision making at Fiat

Fiat S.p.A. is part of Dow Jones Sustainability World and Dow Jones Sustainability STOXX indexes

To continue in our commitment to maintaining high standards and improving performance, thereby contributing to the creation of long-term value for all stakeholders

2009 Industry score

Best

Fiat Group

Average

Economic

Environmental

Social

Best

Fiat Group

Average

Best

Fiat Group

Average

Best

Fiat Group

Average

Overall by Dimension


…rapidly and efficiently bringing new products to customers matching market trends and

sustainability needs

We are...

This is the new FIAT


Safe Harbor Statement

Certain information included in this document isforward looking and is subject to important risksand uncertainties that could cause actual results todiffer materially. The Company's businesses includeits automotive, automotive-related and othersectors, and its outlook is predominantly based onits interpretation of what it considers to be the keyeconomic factors affecting these businesses.Forward-looking statements with regard to theGroup's businesses involve a number of importantfactors that are subject to change, including: themany interrelated factors that affect consumerconfidence and worldwide demand for automotiveand automotive-related products; factors affectingthe agricultural business including commoditiesprices, weather, and governmental farm programs;general economic conditions in each of the Group'smarkets; legislation, particularly that relating toautomotive-related issues, agriculture, theenvironment, trade and commerce andinfrastructure development; actions of competitorsin the various industries in which the Group

competes; production difficulties, including capacityand supply constraints and excess inventory levels;labor relations; interest rates and currencyexchange rates; political and civil unrest; and otherrisks and uncertainties. Any forward-lookingstatements contained in this document are referredto the current date and, therefore, any of theassumptions underlying this document or any ofthe circumstances or data mentioned in thisdocument may change. Fiat S.p.A. expresslydisclaims and does not assume any liability inconnection with any inaccuracies in any of theseforward-looking statements or in connection withany use by any third party of such forward-lookingstatements. This document does not representinvestment advice or a recommendation for thepurchase or sale of financial products and/or of anykind of financial services. Finally, this documentdoes not represent an investment solicitation inItaly, pursuant to Section 1, letter (t) of LegislativeDecree no. 58 of February 24, 1998, or in anyother country or state.


Fiat Investor Relations team

Marco Auriemma phone: +39-011-006-3290 Vice President

Vincenzo Torrisi phone: +39-011-006-2749Federico Donati phone: +39-011-006-2756Maristella Borotto phone: +39-011-006-2709

fax: +39-011-006-3796email: [email protected]

website: www.fiatgroup.com

Contacts

less…is more! · dante giacosa (1960’s) september 15, 2009 iaa investor & analyst...

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