1) Lighting
- In 2006, revenues totalled 1,402 million euros, up 11.2% from 2005.
- In 2006, approximately 80 new production programs were launched which, together with the positive sales performance of current products, enabled the Company to achieve
significant market shares worldwide for both headlamps (14%) and taillamps (13%).
- Positive developments in this area included the orders received from Renault Nissan, and the start of commercial dealings with Suzuki: an important launching pad for entry onto the Japanese market.
- Volvo C30 is equipped with rear lamps supplied by Automotive Lighting (Lighting business unit of the Company). Additionally, the foglamps integrated in the front module also have been developed by Automotive Lighting as well as high-mounted stop lamps, license plate lamps and the rear reflex reflector. Automotive Lighting presents itself here as system partner for the complete external vehicle lighting. (From a press release on Feb. 15?ｽ 2007)

2) Engine Control
-Revenues for 2006 totalled 882 million euros, an increase of 11.9% from the previous year. As regards the product mix, demand for spark ignition engine systems slowed in favour of their diesel counterparts.
-The revenue increase involves all customers of the business line, in particular Fiat Auto and Fiat Powertrain Technologies (for a total of +22%) and customers in the China area. Good sales performance was also achieved by the Tetrafuel system (which enables environmentally-friendly vehicles to run on four fuel types) which combines the ability to meter four types of fuel in a single control unit, supplied to Fiasa in Brazil. A number of major
product launches also took place, including that for mechatronic Selespeed systems for PSA and GM-Opel in Europe and for Chery in China.
-Orders received during the year included the Selespeed applications and gasoline systems for Chery, the gasoline system for the new Fire engine of Fiat Powertrain Technologies, and
Flexfuel systems for Fiasa, Ford and PSA in Brazil.

3) Cofap Automotive Suspension
-In 2006, Cofap Automotive Suspension had revenues of 1,103 million euros (1,052 million euros in 2005), an increase of 20% from the previous year's figure.
-The increase in volumes is connected to the success of Fiat's new models and the introduction of new products for GM-Opel and PSA.
-Work on product development focused on newly launched models such as the Bravo, New Ducato, new Fiat 500 and other models for PSA.
- Major orders for shock absorbers were booked in 2006 from Tofas in Turkey, Renault in Romania, Fiat, Volkswagen, General Motors and PSA in Brazil, and General Motors in the United States. In Europe, the unit was awarded an order for the complete suspension system on the new Fiat 500.

4) Electronic Systems
-Total revenues for 2006 amounted to 534 million euros, up 4.1% from 2005.
-Fiat and PSA continued to be the Electronic Systems business unit's largest customers, with a significant increase being recorded for Fiat (+28%). As for third parties, there was a sharp increase in sales to the Volkswagen-Audi group (+50% from 2005).
-In 2006, new products were introduced around the world, including instrument panels for Fiat, Volkswagen and Audi,antenna modules for Volkswagen and Renault, and a navigation system for PSA.
-Orders were received for the new generation of navigation systems for PSA and SAIC, the Fiat radio/navigation system,and instrument panels for Audi and Renault.

5) Exhaust Systems
-In 2006, revenues totalled 533 million euros, a significant increase of 31.9% from the previous year. This sharp rise in revenues was fuelled by sales to Fiat and Mercedes, where the latter was supplied with exhaust systems featuring a DPF diesel particulate filter. Sales also increased in the Mercosur, thanks to strong demand from local customers.
-Major production startups included systems for the Fiat Bravo and New Ducato, and the cold-end exhaust system for Volkswagen.

R&D Expenditures

Innovation
1) Lighting
LED headlamps and taillamps are now being developed, together with a new concept in optical lenses for future generations of low-beam headlamps and the world's
first design for a headlamp unit using LED technology for all required functions.

Headlamps for New BMW X5
Automotive Lighting, a consolidated subsidiary of Magneti Marelli, developed the headlamps for the new BMW X5 and produces them in one of the most modern production plants of Automotive Lighting in Juarez(Mexico). In the new X5 SUV customers now can choose out of three different headlamp systems. The basic model is equipped with a high-performance Halogen projection system. Customers wishing even more comfort and safety can decide for powerful Bi-Xenon headlamps. Those expecting an optimum illumination of the road even in curves choose "Dynamic Xenon", the Adaptive Frontlighting System (AFS) with dynamic curve light. The projection module generating low and high beam is swivelled automatically depending on the steering angle. The high quality rear lamps of BMW X5 are produced within AL Italy and delivered directly to the American BMW plant in Spartanburg. (From a press release on Apr. 16 2007)

2) Cofap Automotive Suspension
Cofap Automotive Suspension unit worked on projects associated with an evolved version of the Torcs suspension and the program for the electronic SDC Synaptic Damping Control system.

SAE 2007 World Congress

<Highlights> What do you want us to see? -Multifuel- based on the innovative SFS- Software Flexfuel Sensor, these systems gives the driver the power of fuel choice making possible the use of gasoline, ethanol or a blend of both in any proportion. The evolution of the SFS System is TetraFuel, the technology able to manage four types of fuel with only one ECU, allowing the vehicle to run with gasoline, ethanol, gasohol, or compressed natural gas. TetraFuel automatically chooses the best fuel option for each driving condition, without the need of switches or power loss, to reach the optimal compromise between performance, fuel economy and lower CO2 emissions. In other words, the ECU system identifies and qualifies the mixture of alcohol and gasoline in the fuel tank, and allows the driver to run on different blends of fuel. Models the products (s) shown are installed into? -90% of the 2 million vehicles manufactured in Brazil are equipped with SFS- Software Flexfuel Sensor. The benefit is to help reduce CO2 emissions by 5%. Several Countries in Europe, China and the U.S. are already studying the potential development of similar technologies.

Capital Expenditure