Magneti Marelli S.p.A. Business Report FY ended Dec. 2016

Financial Overview

-In the fiscal year ended December 31, 2016, the Company’s sales increased from EUR 7,262 million in the previous year to approximately EUR 7,900 million, an increase of approximately 8.8%.

-The Company’s strong performance in the fiscal year ended December 31, 2016 came as a result of increased sales volumes and profit margins, leading to an increase in EBIT over the previous year.

Recent Developments

-An August 3 report that Samsung is interested in acquiring part or all of the Company has FCA’s stock up 8.9% in afternoon trading on the New York Stock Exchange. The deal would provide an entry for Samsung into the lucrative segment of vehicle electronics and infotainment and allow FCA to pay down debt. The news helped boost FCA shares which had suffered a 2.7% loss the previous day after July sales figures were reported. (From a Detroit Free Press article on August 3, 2016)

-The Company announced that it has opened its new headquarters for China in Pudong, Shanghai. In addition to hosting the staff, administrative and commercial functions for the activities relating to the Powertrain, Automotive Lighting, Exhaust Systems, Suspensions and Aftermarket areas, the new building also includes a Research and Development center for the Powertrain and Automotive Lighting business areas. The new management structure covers an area of over 22,000 square meters, of which about 6,500 are devoted to the two R&D laboratories. The new headquarters will accommodate around 550 people at the end of 2016, reaching approximately 700 people in 2018. Over 350 will be engineers and technicians involved in the activities of the R&D and product development centers. (From a press release on April 21, 2016)

Major Contracts

Company Model Parts Supplied
Alfa Romeo Giulia Halogen and adaptive XED headlights, LED tail lights, Infotainment system with TFT display, Body computer, Rear suspension components, Exhaust system components, Powertrain components
Giulia Veloce ECU, Air intake manifold, Motorized throttle, Halogen and xenon headlights, LED lights, Infotainment system with 8.8" TFT black panel effect, Interactive console with touchscreen, Exhaust parts, Suspension parts
Giulia Quadrifoglio CDC (Chassis Domain Control), Infotainment system, Headlamps, Rear lamps, Front and rear suspension components, Exhaust system, Pedal boards, Plastic parts, Body computer
4C Spider Xenon headlamps, LED rear tail lights, Shock absorbers, ECU, Electro-hydraulic actuators for dual-clutch gearbox
Audi A5 25-watt Bi-Xenon, LED and LED matrix system headlamps, Instrument clusters with digital and analog displays
A5 Sportback Throttle body
Q5 25-watt Bi-Xenon, LED and LED matrix system headlamps, Instrument clusters with digital and analog displays, Throttle body
A4 LED rear lamps, Bi-Xenon 25-watt headlamps, LED headlamps, Matrix LED headlamps
R8 Laser full-beam headlight module
BMW i3 Infotainment system
3 Series GT Infotainment system, Suspension systems, Shock absorbers
5 Series Infotainment system
7 Series Infotainment system, LED tail lights
Chevrolet Volt eLight LED headlamps and rear lamps
Camaro Halogen and xenon headlamps and LED tail lamps
Chrysler Pacifica Halogen and xenon headlamps, Bulb and LED rear lamps
Citroen C3 Telematic Box (T-BOX), Throttle body, Suspension systems, Shock absorbers
Ferrari LaFerrari Aperta Electric motors, Electronic components for management and control, High-intensity Bi-Xenon headlights, LED lights, Throttle body, ECU, Superlift systems, Body computers, Electric actuator for exhaust collection, ECU for dual-clutch gearbox, Door modules
GTC4Lusso Powertrain control (Hydraulic kit and management control unit for dual clutch transmission), Body Computer, Full LED tail lights, Brake lights, Indicators, Rear fog lights, Pedal box
Fiat 500X Control units, Hydraulic kits
500S Front lights, Rear lights, Digital 7" TFT instrument cluster, Dualogic robotized gearbox
500 Riva Interactive console with touchscreen
124 Exhaust system, ECU, Air intake manifolds, Throttle bodies, Fuel injectors
Tipo Control units, Hydraulic kits, Headlights, Tail lights, Powertrain components, Exhaust systems, Shock absorbers, Suspension components
Jeep Renegade Control units, Hydraulic kits
Renegade Trailhawk TFT screen
Maserati Levante Instrument cluster, Rear lighting systems, Suspension components
Mercedes-Benz AMG GT Adaptive full LED headlamps
AMG GTR Adaptive full LED headlamps
C-Class Convertible Halogen and LED headlights
E-Class LED rear lights
Opel Astra Automated manual transmission, Transmission control unit, Tail lights
Peugeot 2008 Navigation system with 7" touchscreen display
3008 LED rear lamps, 12 TFT i-Cockpit, 8 TFT infotainment display, Throttle body
5008 LED rear lamps, 12 TFT i-Cockpit, 8 TFT infotainment display, Throttle body
Expert Navigation system with 7" touchscreen display
Porsche Panamera LED rear lamps, Electronic throttle body, Exhaust system components
911 Turbo Instrument cluster
Renault Megane LED tail lights
Megane Station Wagon Rear lamps
Clio Headlamps, Rear lamps
Seat Ateca Throttle body
Skoda Kodiaq Throttle body, Exhaust systems
Superb Wagon Throttle body
Vision S Throttle body
Suzuki SX4 S-Cross Exhaust systems

-In its annual general report, Magneti Marelli Talbros Chassis Systems Private Limited noted that it has emerged as the single-source supplier for control arms to Maruti Suzuki's (MSIL) latest top selling models including the S-Cross, Baleno and Vitara Brezza. The company has also won business from Bajaj for the quadricycle Qute that is exported to over 16 countries for suspension systems. Magneti Marelli Talbros Chassis Systems also commenced the implementation of a world-class manufacturing program for Fiat Chrysler. This execution has already started to demonstrate results with benefits including a 3% decline in material and processing costs and 1% decline in wage billing. Magneti Marelli Talbros Chassis Systems is a joint venture between Sistemi Sospensioni S.p.A, a Company subsidiary, and Talbros. (Based on annual general report of Talbros)

R&D Expenditures

(in million EUR)
FY ended Dec. 31, 2016 FY ended Dec. 31, 2015 FY ended Dec. 31, 2014
Overall 466 334 390

R&D Facilities

-The Company’s new headquarters in Pudong, Shanghai, China will include new R&D centers for the Powertrain and Automotive Lighting business areas, covering approximately 6,500 square meters of space. The activities of the Powertrain Research and Development Laboratory at the new headquarters will focus on developing strategic solutions and components for the area of hybrid systems, electronics and electromechanical technologies. The R&D laboratory of Automotive Lighting will instead be engaged in developing and adapting to the Chinese and Asian markets all the front and rear lighting technologies. Over 350 will be engineers and technicians involved in the activities of the R&D and product development centers. (From a press release on April 21, 2016)

R&D Activities

-Approximately 20% of the Company’s research and development activities involve the Company working with universities or excellence centers through cooperation agreements.

-The Company displayed the Luminator, a concept vehicle based on a Jeep Wrangler designed for night time off-roading, at the 2016 SEMA show in Las Vegas, U.S. The Luminator features advanced lighting technology such as 7-inch round LED headlamps which output over 1,500 lumens, auxiliary windshield mounted LED lighting, a hood mounted infrared camera obstacle detection lighting unit, and A-pillar spot lamps. Other technology on the Luminator includes an integrated drone carrier on the vehicles rear, an integrated capacitive touchscreen, a roof-mounted 360 VR camera, and rooftop mounted solar panels.

Product Development

2016 Bologna Motor Show
-At the 2016 Bologna Motor Show, the Company presented a variety of components focusing on technology which benefited racing as well as on-highway vehicles. Items on display include high-pressure GDI injectors, telematics systems, instrument clusters for the Peugeot 3008 and Porsche 911 GT3, Full-LED lighting systems for the BMW 7 Series and Mercedes-AMG GT, and finally a laser full-beam headlight module for the Audi R8. (From a press release on December 2, 2016)

Capital Expenditures

-In the fiscal year ended December 31, 2016, the Company invested 5.7% of its sales, or approximately EUR 450.3 million, in its investing activities.

Investments in Italy

-Magneti Marelli Automotive Lighting, a division of the Company, inaugurated a EUR 6 million electronics production site for LED rear lighting in Tolmezzo, Italy. The new site has production lines for circuit boards and will be completed by a design center specifically dedicated to electronics for rear illumination. The new 5,000-square-meter site is located within the Carnia Industrial Park as part of the Automotive Lighting industrial complex in Tolmezzo. The entire 32,000-square-meter Automotive Lighting complex currently has an annual production capacity of over 4.8 million units, 80% of which is dedicated to LED lighting. Over the last three years, Magneti Marelli Automotive Lighting has invested approximately EUR 25 million for production capacity growth in the Tolmezzo plant. The Tolmezzo complex supplies BMW, Daimler-Mercedes, FCA, Ferrari, Ford, GM-Opel, the Volkswagen Group, and Volvo. The complex also includes a research and development center which has designed approximately 320 different types of light for approximately 200 car models since 2000. (From a press release on December 13, 2016)

Investments Outside Italy

-The Company’s Automotive Lighting division is integrating in Juarez production site in Mexico, a new assembly operation for LED modules. The LED operation will start with the involvement of 115 employees, and grow to 165 by the end of 2016 and to 400 people by the end of 2017. In NAFTA, the LED technology penetration for front lighting is expected to grow from approximately 20% in 2016 to approximately 50% in 2020. (From a press release on June 27, 2016)

-A new Company plant, aimed at the production of suspension systems, has been inaugurated in Guangzhou, Guangdong Province, China. The new plant will also host pedals systems production. The structure covers an area of 27,000 square meters, over 17,000 of which are devoted to production facilities. A full production capacity, the plant can supply suspension systems for about 220,000 vehicles a year, and pedal boxes for about 100,000 vehicles a year. The plant will start with a team of about 60 employees. (From a press release on May 30, 2016)