Magneti Marelli Business Report FY2008
Business Highlights
Financial Overview
*Scope has been changed in 2008. Suspension System has been divided into Suspension System and Shock Absorbers in 2008.
1) Lighting
-Revenues totalled 1,524 million euros in 2008, down 5.6% from the previous year.
-The overall reduction in sales volumes attributable to the global financial crisis and spiralling oil prices, impacted performance in the US market for the entire second half of 2008 and in the European and Asian markets for the last four months.
-Volumes for taillamps, however, went against the trend, rising in absolute terms.
-Significant new orders were received during the year for headlamps and taillamps for the Alfa MiTo and for Mercedes, BMW and Opel models, as well as headlamps for Volkswagen-Audi and Land Rover.
-In 2008, full-LED headlamp was developed for the Audi R8.
2) Engine Control
-Revenues for 2008 remained fairly stable at 933 million euros, with strong sales of Gasoline Direct Injection (GDI) injectors and manifolds to OEMs countering a slowdown in revenues in the U.S. market.
-Product rollouts during the year included Freechoice systems for the Fiat 500, Maserati GranTurismo and for FIASA in Brazil,manifolds for new Fiat Bravo engines and for the Lancia Delta, and the natural gas system for the Grande Punto.
-Major orders received during the year included: systems for the FIRE 1.0-litre and 1.4-litre Evolution engines for the new Palio and new Uno in Brazil; a throttle body for GM in Europe, China, the USA and Brazil; and GDI injectors for Volkswagen.
3) Suspension Systems
-Revenues for the year totalled 893 million euros, substantially in line with 2007 on a comparable scope of operations.
-Though major gains were made in Poland, driven by products for the Fiat 500 and Panda, and in Brazil for Fiat, they were offset by performance in Italy which was impacted by the halt in production at the G.B. Vico plant and the transfer of the Mechanical Component Assembly business to Fiat Group Automobiles in April 2008, in addition to the overall slump in the Italian market in the second half of the year.
-New products launched during the year included suspension systems for the Lancia Delta, Alfa MiTo and Fiat 500 Abarth, as well as a complete suspension system for Ford.
4) Shock Absorbers
-The business line's 2008 revenues totalled 315 million euros, a 5.4% increase driven by higher sales in Brazil and in Poland for the Ducato and Fiat 500.
-There was a slowdown in the latter part of the year, especially for the U.S. market.
-New orders were received from all major customers, including Fiat Group Automobiles, Mercedes, PSA and General Motors.
5) Electronic Systems
-Revenues for 2008 totalled 570 million euros, up 2.5% from the previous year. Instrument panels increased by 10%, driven by sales to external customers.
-Telematics lost ground due to changes in the product mix for infotainment systems, but there was an increase in sales of the Blue&Me system to Fiat.
-Sales of products for vehicle interiors dropped.
-Development activities concentrated on hardware and software design for the new generation of navigation systems for PSA, and on the radio/navigator for Fiat, PSA and SAIC.
-Instrument panel products were developed for new Volkswagen-Audi, Renault and Citroen models, while the business line also worked on a telematic-compatible high-resolution display for PSA and Maserati.
-The vehicle interiors products line developed new body computers for Fiat, the body computer for the new Palio in Brazil, climate control systems for new Fiat models, electronics for Stop & Start systems, door modules for Renault, and a comfort module for Volkswagen in Brazil.
-Orders were received for an instrument panel for PSA for use in the European and Chinese markets, and for instrument panel and vehicle interior products for the new Palio.
-For telematics products, orders were booked for the Fiat Bravo and Croma radio/navigator, for the new generation of telematics products for PSA, and for the Telematic Box in Brazil.
6) Exhaust Systems
-Revenues totalled 635 million euros in 2008, a 3.6% increase over the previous year. Positive contributions came from sales in Poland, driven by increased demand for the Fiat 500, and from sales to external customers in Brazil, Spain and Argentina.
-By contrast, in Italy and China revenues contracted from the previous year's levels.
-New production included complete exhaust systems for the Alfa MiTo, Lancia Musa, Lancia Delta, Fiat 500, and for Ford, as well as hot-end systems for the Euro 5-compliant turbocharged 1.4-litre gasoline engine.
-Major new orders included a complete exhaust system for General Motors for production in several countries and an exhaust manifold for Volkswagen in Brazil.
Joint ventures in India
-In 2008, the Company established several joint ventures in India.
-In Jan. 2008, the Company and Sumi Motherson Group have signed an agreement for the creation of a joint venture in India aimed at the production of automotive components in the area of lighting and engine control systems. Each company will own a 50% interest in the joint venture. The industrial facilities will be located in the areas of New Delhi (northern part of India) and Pune (Maharashtra region, in India's western region) and will concentrate on the production and assembly of intake manifolds for engines and headlamps and rear lamps for automobiles. (From a press release on Jan. 14, 2008)
-In Feb. 2008, the Company has signed two agreements for the creation of two joint ventures in India aimed at the production of exhaust systems for automobiles. The agreements, which provide for equal shareholdings, have been entered into with SKH Metals Limited and SKH Sheet Metal Components Limited respectively. The entity created with SKH Metals will be located at the Industrial Supplier Park in Manesar, Gurgaon. The exhaust system components designed, produced, assembled and tested in Manesar will be used in the production of vehicles for Maruti Suzuki and of other companies belonging to Suzuki. The facility relating to the joint venture with SKH Sheet Metal Components will be located in Pune, Maharashtra, a strategic position that guarantees the design, production, testing and supply of exhaust systems to Fiat, Tata and other automotive customers in India's south-west region. (From a press release on Feb. 19, 2008)
-In Jun. 2008, the Company and Endurance Technologies Pvt. Ltd. have signed a joint venture agreement aimed at the production of shock absorbers for motor vehicles in India and Thailand. According to the terms of the agreement, which provide for equal shareholdings, the joint venture company is set to be operative by the first quarter of 2009. The industrial facilities will be located in Chackan, in the region of Pune, Maharashtra. Another production unit is also planned in Thailand, near Bangkok, where the Endurance Group is already present. Endurance is an international group specialized in aluminium die casting and specifically in the production of vehicle components and systems such as suspensions, transmissions and braking systems.(From a press release on Jun. 14, 2008)
-In Sept. 2008, the Company and Unitech Machines Limited have signed an agreement for the creation of a joint venture aimed at the production of motor vehicle electronic systems in India. The new company will be 51 percent owned by the Company and 49 percent owned by Unitech Machines Limited. The joint venture is set to be operational by the end of the first quarter of 2009. The industrial facilities will be located in Manesar in the industrial district of Gurgaon. The activity will be aimed specifically at the design, production and assembly of motor vehicle electronic components, such as instrument clusters, body electronics (control units that manage main vehicle functions) as well as telematic devices. (From a press release on Sep 12, 2008)
| (in million dollars) | FY2008 | FY2007 | Rate of change (%) | Factors |
| Overall | ||||
| Sales | 5,447 | 5,000 | (8.9) | - |
| Operating income | 93 | 209 | (55.5) | - |
| Sales by division | ||||
| Lighting | 1,524 | 1,614 | (5.6) | 1) |
| Engine Control | 933 | 947 | (1.5) | 2) |
| Suspension System | 893(*) | 1,182 | - | 3) |
| Shock Absorbers | 315(*) | - | 4) | |
| Electronic Systems | 570 | 556 | 2.5 | 5) |
| Exhaust Systems | 635 | 613 | 3.6 | 6) |
1) Lighting
-Revenues totalled 1,524 million euros in 2008, down 5.6% from the previous year.
-The overall reduction in sales volumes attributable to the global financial crisis and spiralling oil prices, impacted performance in the US market for the entire second half of 2008 and in the European and Asian markets for the last four months.
-Volumes for taillamps, however, went against the trend, rising in absolute terms.
-Significant new orders were received during the year for headlamps and taillamps for the Alfa MiTo and for Mercedes, BMW and Opel models, as well as headlamps for Volkswagen-Audi and Land Rover.
-In 2008, full-LED headlamp was developed for the Audi R8.
2) Engine Control
-Revenues for 2008 remained fairly stable at 933 million euros, with strong sales of Gasoline Direct Injection (GDI) injectors and manifolds to OEMs countering a slowdown in revenues in the U.S. market.
-Product rollouts during the year included Freechoice systems for the Fiat 500, Maserati GranTurismo and for FIASA in Brazil,manifolds for new Fiat Bravo engines and for the Lancia Delta, and the natural gas system for the Grande Punto.
-Major orders received during the year included: systems for the FIRE 1.0-litre and 1.4-litre Evolution engines for the new Palio and new Uno in Brazil; a throttle body for GM in Europe, China, the USA and Brazil; and GDI injectors for Volkswagen.
3) Suspension Systems
-Revenues for the year totalled 893 million euros, substantially in line with 2007 on a comparable scope of operations.
-Though major gains were made in Poland, driven by products for the Fiat 500 and Panda, and in Brazil for Fiat, they were offset by performance in Italy which was impacted by the halt in production at the G.B. Vico plant and the transfer of the Mechanical Component Assembly business to Fiat Group Automobiles in April 2008, in addition to the overall slump in the Italian market in the second half of the year.
-New products launched during the year included suspension systems for the Lancia Delta, Alfa MiTo and Fiat 500 Abarth, as well as a complete suspension system for Ford.
4) Shock Absorbers
-The business line's 2008 revenues totalled 315 million euros, a 5.4% increase driven by higher sales in Brazil and in Poland for the Ducato and Fiat 500.
-There was a slowdown in the latter part of the year, especially for the U.S. market.
-New orders were received from all major customers, including Fiat Group Automobiles, Mercedes, PSA and General Motors.
5) Electronic Systems
-Revenues for 2008 totalled 570 million euros, up 2.5% from the previous year. Instrument panels increased by 10%, driven by sales to external customers.
-Telematics lost ground due to changes in the product mix for infotainment systems, but there was an increase in sales of the Blue&Me system to Fiat.
-Sales of products for vehicle interiors dropped.
-Development activities concentrated on hardware and software design for the new generation of navigation systems for PSA, and on the radio/navigator for Fiat, PSA and SAIC.
-Instrument panel products were developed for new Volkswagen-Audi, Renault and Citroen models, while the business line also worked on a telematic-compatible high-resolution display for PSA and Maserati.
-The vehicle interiors products line developed new body computers for Fiat, the body computer for the new Palio in Brazil, climate control systems for new Fiat models, electronics for Stop & Start systems, door modules for Renault, and a comfort module for Volkswagen in Brazil.
-Orders were received for an instrument panel for PSA for use in the European and Chinese markets, and for instrument panel and vehicle interior products for the new Palio.
-For telematics products, orders were booked for the Fiat Bravo and Croma radio/navigator, for the new generation of telematics products for PSA, and for the Telematic Box in Brazil.
6) Exhaust Systems
-Revenues totalled 635 million euros in 2008, a 3.6% increase over the previous year. Positive contributions came from sales in Poland, driven by increased demand for the Fiat 500, and from sales to external customers in Brazil, Spain and Argentina.
-By contrast, in Italy and China revenues contracted from the previous year's levels.
-New production included complete exhaust systems for the Alfa MiTo, Lancia Musa, Lancia Delta, Fiat 500, and for Ford, as well as hot-end systems for the Euro 5-compliant turbocharged 1.4-litre gasoline engine.
-Major new orders included a complete exhaust system for General Motors for production in several countries and an exhaust manifold for Volkswagen in Brazil.
Joint ventures in India
-In 2008, the Company established several joint ventures in India.
-In Jan. 2008, the Company and Sumi Motherson Group have signed an agreement for the creation of a joint venture in India aimed at the production of automotive components in the area of lighting and engine control systems. Each company will own a 50% interest in the joint venture. The industrial facilities will be located in the areas of New Delhi (northern part of India) and Pune (Maharashtra region, in India's western region) and will concentrate on the production and assembly of intake manifolds for engines and headlamps and rear lamps for automobiles. (From a press release on Jan. 14, 2008)
-In Feb. 2008, the Company has signed two agreements for the creation of two joint ventures in India aimed at the production of exhaust systems for automobiles. The agreements, which provide for equal shareholdings, have been entered into with SKH Metals Limited and SKH Sheet Metal Components Limited respectively. The entity created with SKH Metals will be located at the Industrial Supplier Park in Manesar, Gurgaon. The exhaust system components designed, produced, assembled and tested in Manesar will be used in the production of vehicles for Maruti Suzuki and of other companies belonging to Suzuki. The facility relating to the joint venture with SKH Sheet Metal Components will be located in Pune, Maharashtra, a strategic position that guarantees the design, production, testing and supply of exhaust systems to Fiat, Tata and other automotive customers in India's south-west region. (From a press release on Feb. 19, 2008)
-In Jun. 2008, the Company and Endurance Technologies Pvt. Ltd. have signed a joint venture agreement aimed at the production of shock absorbers for motor vehicles in India and Thailand. According to the terms of the agreement, which provide for equal shareholdings, the joint venture company is set to be operative by the first quarter of 2009. The industrial facilities will be located in Chackan, in the region of Pune, Maharashtra. Another production unit is also planned in Thailand, near Bangkok, where the Endurance Group is already present. Endurance is an international group specialized in aluminium die casting and specifically in the production of vehicle components and systems such as suspensions, transmissions and braking systems.(From a press release on Jun. 14, 2008)
-In Sept. 2008, the Company and Unitech Machines Limited have signed an agreement for the creation of a joint venture aimed at the production of motor vehicle electronic systems in India. The new company will be 51 percent owned by the Company and 49 percent owned by Unitech Machines Limited. The joint venture is set to be operational by the end of the first quarter of 2009. The industrial facilities will be located in Manesar in the industrial district of Gurgaon. The activity will be aimed specifically at the design, production and assembly of motor vehicle electronic components, such as instrument clusters, body electronics (control units that manage main vehicle functions) as well as telematic devices. (From a press release on Sep 12, 2008)
R&D
R&D Expenditures
Product Developments
1) Lighting
-There was intense innovation activity throughout the year focused on Full LED headlamp technology, the bihalogen projection module, LED taillamps, flexboard technologies for LED applications, as well as light curtain and light guide technologies.
2) Engine Control
-Innovation concentrated on development of new products and technologies for hybrid vehicles, biofuels, and lowconsumption gasoline and diesel engines.
3) Electronic Systems
-In Mar. 2008, the Company announced that it develops the new Ford Work Solutions(R) in-dash computer for the Ford Motor Company Commercial Vehicles and Light Pickup Trucks for the North American market. The solution provides high-speed Internet access via the Sprint Mobile Broadband Network; the system includes a wireless connection that allows external peripheral devices (such as printers) to be used, and a Bluetooth connection that guarantees safe use of the user's cell phone with push-to-talk voice recognition, access to user phonebooks and the ability to send and receive text messages. The system is also equipped with a 6.5 inch color touch-screen display so that the driver can easily manage all the available functions: from displaying maps related to the satellite navigation function, which can also be used through voice commands, to consulting Web pages. (From a press release on Mar. 1, 2008)
| (in millions Euros) | FY2008 | FY2007 | FY2006 |
Total |
268 | 221 | 217 |
Product Developments
1) Lighting
-There was intense innovation activity throughout the year focused on Full LED headlamp technology, the bihalogen projection module, LED taillamps, flexboard technologies for LED applications, as well as light curtain and light guide technologies.
2) Engine Control
-Innovation concentrated on development of new products and technologies for hybrid vehicles, biofuels, and lowconsumption gasoline and diesel engines.
3) Electronic Systems
-In Mar. 2008, the Company announced that it develops the new Ford Work Solutions(R) in-dash computer for the Ford Motor Company Commercial Vehicles and Light Pickup Trucks for the North American market. The solution provides high-speed Internet access via the Sprint Mobile Broadband Network; the system includes a wireless connection that allows external peripheral devices (such as printers) to be used, and a Bluetooth connection that guarantees safe use of the user's cell phone with push-to-talk voice recognition, access to user phonebooks and the ability to send and receive text messages. The system is also equipped with a 6.5 inch color touch-screen display so that the driver can easily manage all the available functions: from displaying maps related to the satellite navigation function, which can also be used through voice commands, to consulting Web pages. (From a press release on Mar. 1, 2008)
Investment Activities
Capital Expenditure
| (in millions Euros) | FY2008 | FY2007 | FY2006 |
| Total | 474 | 319 | 293 |