Fiat Strategies in Automotive Sustainable Development Nevio Di Giusto Centro Ricerche Fiat

YICGG2008, 2° Edition, Rome August 21, 2008

Fiat Strategies in Automotive Sustainable Development

Nevio Di Giusto

Centro Ricerche Fiat

Fiat Strategies in Automotive Sustainable Development 2Rome August 21, 2008Public

This document contains information which is in proprietary to CRF. Neither this document nor the information contained herein shall be used, duplicated nor communicated by any means to any third part, in whole or in party, except with the prior written consent CRF

The FIAT Group



The Fiat Group’s businesses

Automobiles

Agricultural and Construction Equipment

Trucks and Commercial Vehicles

Components and Production Systems

Publishing and Communications



FIAT GROUP RESEARCH IN FIGURESFIAT GROUP RESEARCH IN FIGURES

12.900 people in 114 centers

1,7M€ (3% of industrial revenues)

The Fiat Group’s research system

>1600 people>1600 people

>700 inventions>700 inventions

>2000 patents>2000 patents

>500 EU projects>500 EU projects

>80 fellowships>80 fellowships



CRF Foggia Diesels and methane engines

ELASIS LecceAgricultural and building machines

Pomigliano (NA)Promotes the innovation and its

application in projects, products and processes

CRF TrentoTechnical and technological solutions for special and low volumes vehicles;info-telematics for urban mobility and logistics

CRP- Amaro (UD)Optics, plastics, micro and nanotechnologies

CRF Valenzano (BA)Injection systems for internal combustion engines

Orbassano (TO)Promotes, develops and transfers the

innovative contents which give competitiveness and distinctiveness to

the product

CRF ed Elasis – HEADQUARTERS and BRANCHES



AUTOMOTIVE MARKET - GENERAL ISSUES

Challenges Scarcity of Raw Materials and Energy Sources Environment Safety Traffic congestion World-wide competition & New competitors Customer, Market and Society evolution

Trade-offs Innovation vs. risks & competitiveness Technology mix; development time, cost sharing Future product life-cycle and technology obsolescence Timely Integrated approach from all contributors Market dynamics evolution/change, fragmentation Alliances/Sharing of components and systems,

Sharing of production sites, Relocation of production



11577 11045 13490

2002 2007 2012

SOUTH AMERICA +91%

NAFTA +16,5%

WEST EUROPE +2,2 %

EAST EUROPE + 153%

1866 2707 3570

2002 2007 2012

14825 14651 15150

2002 2007 2012

2170 3841 5497

2002 2007 2012

337 684 8102002 2007 2012

AFRICA +140%

ASIA + 258%

524610693 18774

2002 2007 2012

JAPAN +5,7%

4600 4861

2002 2007 2012

4575

Automotive Sales Worldwide - Source: Global Insight

INNOVATIVE PRODUCTS IN A ODD MARKET



EVERYBODY HAS ONE …

Mass Market

ITALY - A SATURATED MARKET

ITALY 2007592 vehicles for

1000 inhabitants



EVERYBODY HAS ONE (at least) …

PRODUCTS IN A SATURATED MARKET

EACH CUSTOMER WANTS “HIS” OWN…



EVERYBODY HAS ONE (at least) …


EACH CUSTOMER WANTS “HIS” ONE…

SEVERAL MILLION CONFIGURATIONS, FOR THOUSANDS OF PRODUCTS…

… USING SIMILAR, STANDARDIZED SOLUTIONS

Source: Frost & Sullivan




ACTUALLY:

THE CUSTOMERS CAN REALLY CHOOSE ACCORDING TO THEIR NEEDS, WISHES AND PERCEPTION OF VALUE…

…AND THEY ARE GETTING USED TO IT

( “customer fidelity” is a past attitude)

PERCEIVED

AS

Top Priority…



OEM SPECIFIC CHALLENGES IN SATURATED MARKET ARE…

To imagine the product for the customer of the future

To forecast the sustainable mobility scenario

To consider social and cultural evolution

To keep in touch with promising new technologies

To nurture new competencies

…and to react quickly



PLAY IN THE GLOBAL MARKET AND REACT QUICKLY

It is not the strongest of the species that survives, nor the most intelligent … but the one most responsive to change

Charles Darwin

RECONFIGURATION AND EVOLUTION



ORGANIZATIONS

MUST BE INNOVATIVE

AND REACT QUICKLY



NETWORK OF COOPERATION

CREATIVITY

TECHNICAL&

SCIENTIFICCULTURE

PASSION

AUTOMOTIVE INNOVATION

THE PILLARS OF AUTOMOTIVE INNOVATION IN FIAT



SOME METAPHORS OF NETWORK



ACCELERATING THE INNOVATION TIME-SCALEIN COOPERATVE DEVELOPMENT

NOW

CUSTOMERS New product

FIAT SECTORS Product Development

SUPPLIERS Component Development

CRF/ELASIS Innovation

UNIVERSITIES Basic Research



ACCELERATING THE INNOVATION TIME-SCALE

NOW-TTM NOW

CUSTOMERS New product


Product Development


Component Development

CRF/ELASIS Innovation Innovation

UNIVERSITIES Basic Research Basic Research




NOW-TTM NOW NOW+TTM NOW+2TTM NOW+3TTM

CUSTOMERS New product New product New product New product


Product Development

Product Development

Product Development









THE NETWORK NOW-TTM NOW NOW+TTM NOW+2TTM NOW+3TTM



Product Development

Product Development

Product Development






Time-to-Market ReductionMarket risks reduction

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THE BEATING HEART OF INNOVATIONMulti - Timeframe Information Integration & Solution Providing

NOW-TTM NOW NOW+TTM NOW+2TTM NOW+3TTM



Product Development

Product Development

Product Development








NETWORKS MUST ADD REAL VALUES

If you have an apple and I have an apple and we exchange these apples then you and I will still each have one apple.

But if you have an idea and I have an idea and we exchange these ideas, then each of us will have two ideas.

George Bernard Shaw



NETWORK SHARING INNOVATIVE METHODOLOGIES

Basic ResearchBasic ResearchUNIVERSITIES

New product

NOW+3TTM

InnovationInnovationCRF/ELASIS



Component DevelopmentSUPPLIERS

Product Development

Product Development

Product Development

Product DevelopmentFIAT SECTORS

New productNew productNew productCUSTOMERS

NOW+2TTMNOW+TTMNOWNOW-TTM

Basic ResearchBasic ResearchUNIVERSITIES

New product

NOW+3TTM

InnovationInnovationCRF/ELASIS



Component DevelopmentSUPPLIERS

Product Development

Product Development

Product Development

Product DevelopmentFIAT SECTORS

New productNew productNew productCUSTOMERS

NOW+2TTMNOW+TTMNOWNOW-TTM

Time-to-Market ReductionMarket risks reduction

Co

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ica

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pro

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Production Sales &Distribution

Usage

Maintenance& Service

Disposal &Recycling

Requirements

& Planning

ProductDesign andValidation

ManufacturingPlanning

ConceptDevelopment

18 months18 months

Time To MarketTime To Market


Usage


Disposal &Recycling

Requirements

& Planning

ProductDesign andValidation


ConceptDevelopment

18 months18 months




STRENTHENING THE VIRTUAL ENGINEERING


Usage


Disposal &Recycling

Requirements

& Planning

ProductDesign

andValidation


ConceptDevelopment

18 months18 months




BACK TO GLOBAL ISSUES…



Energy and Environment

All industrialized countries are facing today severe challenges regarding energy and environment.

They have to:

assure reliable energy supplies (today mostly dependent on petroleum);

reduce the emissions of greenhouse gases in order to fulfill the Kyoto protocol;

protect the environment and improve the quality of life in urban areas.



HIGH-PRIORITY CHALLENGES IN EUROPEEC green paper

Greening of surface transportDeveloping technologies and knowledge for reduced pollution (air, water and soil) and environmental impact such as climate change, health, biodiversity and noise.Research will improve the cleanliness and energy-efficiency of power-trains and promote the use of alternative fuels, including hydrogen and fuel cells.

Encouraging modal shift and decongesting transport corridorsThis includes activities addressing the interoperability and operational optimisation of local, regional, national and European transport networks, systems and services and their intermodal integration in a global context.

Ensuring sustainable urban mobilityFocusing on the mobility of people and goods by research on the ‘next generation vehicle’ and its market take-up, bringing together all elements of a clean, energy-efficient, safe and intelligent road transport system.

Improving safety and securityDeveloping technologies and intelligent systems to protect vulnerable persons such as drivers, riders, passengers and pedestrians. Advanced engineering systems and risk analysis methodologies will be developed for the design of vehicles and infrastructures.

To promote safe, efficient and environmentally friendly mobility



CRITICAL FACTORS FOR THE AUTOMOTIVE INDUSTRY



Energy and Environment in the Transport Sector

The transport sector is deeply involved in meeting these challenges along the vehicle life cycle:



The scenario: Pollutant emissions

New vehicles pollute 90% less Currently commercialised vehicles (Euro 4, both gasoline and diesel) allow a

pollutants reduction of more than 90% compared to those commercialised at the beginning of 90s.

Pollutant emissions of new cars are “approaching final solution” with the new regulations. European Union, after consultation with all stakeholders, has recently defined the

new ambitious Euro 5 regulations, compulsory for all the new models starting from September 2009. With the following Euro 6 regulations (2014) the allowed emission levels will be so low to reach the measurability threshold.

The problem is represented by the old age of vehicles in-use Initiatives affecting the in-use fleet – e.g. promoting its renewal - prove to be, by

far, more effective than other actions on new vehicles. On the contrary, measures of circulation restriction, sporadic and uncoordinated, have a high social impact and low results.



Fiat Group Automobiles positioning

Pollutant emissions Fiat with the new 500 is the first brand to have placed on the market a

vehicle ready for the new Euro 5 limits. Fiat Group Automobiles has already a large range of diesel models

equipped with DPF (Diesel Particulate Filter).



CO2 emissions perception and reality



The scenario: CO2 reduction

Contribution of the European car makers to Kyoto protocol In 2005 new cars in Europe reached a CO2 emission level of 13.5 % less than in 1995. This

significant improvement is due to the voluntary agreement between European car makers and the European Commission (as a response to the Kyoto protocol), with the commitment to achieve a target of 140 g/km of CO2 by 2008.

These results are even much valuable taking into account the contrasting effects due to the new regulations concerning safety which increase weights and consequently consumption and the market orientation toward larger and heavier vehicles.

Further commitment of the automotive industry European car makers go on with the technological development for CO2 emission reduction

and support the EU objective of further reducing average car emissions to 120 g/km of CO2.

Crucial for the future of the industry, however, is how this target will be achieved. It is essential to follow an “integrated approach” with all actors involved: fuel industry, final

users, tyres makers, infrastructures, in order to identify the measures with the best cost/benefit ratio.

The new targets should be set through a consultation process providing a thorough evaluation of the global impact and considering the need of sufficient lead-time for the development and production cycles of the car industry.



Fiat Group Automobiles positioning

CO2 emissions Fiat brand, according to an independent source (JATO) turned out to

have the best CO2 emission in Europe in 2007. Notwithstanding the European Parliament, is considering a new

legislation based on targets and CO2 tax for 2012. Fiat Automobiles commits itself to obtaining within 2012, the lowest average level of CO2 emissions for its cars.

188.4

176.7

161.7

152.9149.1 148.8

146.4142.2 141.9

137.3

120

140

160

180

200

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Source: JATO 2008



Ecological manifestos

Diesel poweredGasoline or a Methane-Hydrogen mixture powered



New Technologies for efficient engines

Gasoline engines: Progressive adoption of turbocharged systems coupled with a substantial

displacement downsizing; Introduction of a control system of valve timing and lift (Multiair) able to reduce

consumption of 10% both on naturally aspirated and turbocharged engines; Progressive introduction of gasoline direct injection; The new 1.4 turbo and 1.8 turbo direct injection, the new engine family with

Multiair technology and the new small size two-cylinder engine (SGE) represent the main achievements.

Diesel engines: Application of advanced technologies for turbocharged systems allowing for a

displacement downsizing. An example is the new 1.6 Multijet engine. For both gasoline and diesel engines:

Spreading the use of Stop&Start systems for a further fuel consumption reduction.



Hybrid for urban mobility

City Car Delivery Van



Alternative fuels

Natural gas (methane): Fiat is the leader since more than 10 years in this technology and is the first car

maker to offer a large range of double powered vehicles (gasoline-methane). In January 2007 the new Panda-Panda has been launched to complete the range with a city car. For the future, further developments are planned with the double gasoline-methane powering.



Fiat natural gas cars

Multipla Panda Panda

Doblò / Doblò Cargo Punto / Punto Van



IVECO natural gas commercial vehicles



HyperPandaUsing natural gas/hydrogen blends for urban vehicles

Methane-Hydrogen mixtures is an intermediate step, for promoting in the medium term

the extension of the infrastructures for the distribution of hydrogen.

Fiat is developing a demonstration fleet of vehicles powered with methane-hydrogen mixtures with the objective of tuning this technology.



Panda Hydrogen

Hydrogen is the long term solution. research in this sector requires

large investments and requires the development of adequate infrastructures

the support from the institutions is considered essential for the development of hydrogen technology as a possible solution for mobility.

Fiat is active in the research on the fuel cells technology through the study, the engineering and the production of constantly updated prototypes.



Reuse, Recycling & Energy Recovery

A substantial reduction in the need of using raw materials and in the emissions of greenhouse gases can be achieved through the adoption of an integrated approach, combining high proportions of recycled materials, significant use of renewable resources and energy recovery from residual end-of-life vehicles.

Reuse andRecycling

Recovery Landfill

Target 2006 Target 2015

END OF LIFE VEHICLES (Directive 2000/53/EC)



THE INTEGRATED APPROACH

Sustainable Mobility requires the coordinated contribution of all involved stakeholders: OEM, Suppliers, Road and Traffic operators, Communication and Energy Companies, Policy Makers, and Road Users.



Dynamic Navigation with Floating Car DataThe integrated Approach with Infrastructure and Traffic Operators

Dynamic navigation based on an experimental Floating Car Data (FCD) system provides the driver with up-to-date route information that reflects actual traffic conditions.

This map is transmitted to the vehicles so that the optimum route can be recalculated if necessary. This system provides a more flexible, complete and economical traffic estimate, ensuring that the calculated route is more reliable reducing travel times by an average of 20 to 25%.



EcoDriveThe Integrated Approach – Affecting the Driver behavior

EcoDrive collects all necessary data relating to vehicle efficiency and, through Blue&Me’s USB gate, transmits it into a normal USB key.

The “EcoDrive” system presents the driver with detailed environmental performance of the car including the CO2 emission level for each trip. It analyses the driver’s style and then provides tips and recommendations on how to modify style to achieve CO2 reductions – and save money on fuel.



HIGH-PRIORITY CHALLENGES IN EUROPE

The Safety Issue



SAFETY IS A MUST

Rating

• Frontal impact• Child protection• Pedestrian protection• Whiplash-Test (Sept. 2008)

Pre-crash

Pedestrian protection

Regulations and EC expectations

The Commission White Paper of 2001 sets a target to reduce the overall number of fatal road accidents by 50% by the year 2010.

Proposal 2007/0201(08/10/2007): passenger cars need to be fitted with Brake Assist Systems (BAS) as early as 2009.

Proposal IP/07/1453 (03/10/2007): protection of pedestrians and other vulnerable road users.

Facts 238.124 accidents

About 61% involve front side of the vehicle.

About 8% involve pedestrians.

76.5% occur in urban scenario, 5.6% in highway and 17.9% in other road.

5.669 332.955 ACI-ISTAT



Driver Assistance

New HMI to reduce cognitive or physiological stress New interior environments to improve driving comfort Driver Assistance Systems

Research shows that :driver fatigue is the cause of more than 20% of the accidents that occur in

trafficup to 90% of all traffic accidents are caused by driver distraction or misuse

This fact is a driving force behind development of new safety functions (expecially for trucks) aimed at helping the driver to avoid or reduce accidents caused by distraction or driver fatigue.

Source: EEVC WG14, Swedish and European authorities



Making Vehicles Safer requires an integrated approach

Making vehicles intrinsically safer is focusing on: Avoiding hazardous situations and prevent incidents occurring (Primary) Mitigating the effects of an incident (Secondary) Facilitating rescue after the event (Tertiary)

Time

Passive Safety /Passive Safety /Emergency CallEmergency Call

EmergencyCall

RestraintSystems

OccupantProtection

StructuralDesign

Primary

CollisionCollisionWarningWarning

FrontCollisionWarning

LateralCollisionWarning

CollisionCollisionMitigationMitigation/ Pre-crash/ Pre-crash

EmergencyBraking

Pre-Crash

DriverDriverAssistanceAssistanceSystemsSystems

NORMALDRIVING

LaneDepartureWarning

LaneChange Assist

CrashCrash

Secondary Tertiary



PReVENT - Example of Integrated Approach



CONCLUSIONS

Sustainable mobility requires: More Innovation, not only on Technologies but in Organizations Stakeholder cooperative networking can produces the needed

added value and accelerate the Innovative solutions. Automotive technologies, including alternative fuels and biofuels,

will play a key role in energy saving and pollution reduction, but final solutions may be achieved only trough an integrated approach

Vehicle users supported by a continuous driver assistance function, based on communication, monitoring and maneuver control, may contribute at large in mobility safety and efficiency.

Renewable energies and related infrastructures cannot be avoided. Small contributions from renewable energy in transportation has a huge global effect.



Propulsion - Electric

Transmission - 4WD

Nominal output - 27 kW

Peak output - 54 kW

Photovoltaic cells - 340W (on-board generated power)

Fuel Cell system 1kW (on-board generated power)

Batteries - Lithium-ion or Lithium Polymer

Headlamps - Chip-led

Energy from renewables

YICGG2008, 2° Edition, Rome August 21, 2008

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Fiat Strategies in Automotive Sustainable Development Nevio Di Giusto Centro Ricerche Fiat

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