FPT Powertrain

Technologies

Alfredo Altavilla

April 21, 2010

FPT Powertrain Technologies
Lingotto 2006 FPT reasons why

Our strategic
objectives

Technology leadership

Process synergies

Non-captive sales development

April 21, 2010 Fiat Investor Day 2

FPT Powertrain Technologies
Performance over last plan period

Trading margin 2.7% 3.8% 2.4% (0.5)%

Net revenues (bn)

Trading profit (mn)

2006 2007 2008 2009

Net revenues (bn) ~ 6.0 ~ 6.5 ~ 7.0 ~ 7.5

Trading profit (mn) ~ 160 180-230 280-340 320-380

Trading margin 2.4-2.9% 2.8-3.6% 4.0-4.8% 4.2-5.0%

Lingotto Plan Targets (Nov 2006)

April 21, 2010 Fiat Investor Day 3

FPT Powertrain Technologies at a glance
Key figures

2006 2008 2009

6.1bn Revenues 7.0bn Revenues 5.0bn
1.6bn Non-captive sales 1.5bn Non-captive sales 0.8bn

Production Production
2.8mn Engines 2.9mn Engines 2.5mn
1.8mn Gearboxes 2.2mn Gearboxes 2.2mn
0.3mn Axles 0.3mn Axles 0.1mn
Revenues by customer

Third-party
Third-party Third-party customers
customers customers CNH & JVs CNH
CNH
& JVs & JVs
26% 5% 22% 7% 16% 6%
Iveco
15%

26% 27%
Iveco FGA Iveco FGA FGA
43% 44% 63%

Passenger Passenger
Revenues by application

Cars & LCVs Passenger Cars & LCVs

Cars & LCVs
61% 58% 72%

Marine
Marine
& Others
Marine & Others
& Others 1%
1%
1%
Power Power
Power 6% Generation 8% Generation 8%
Generation
2% 2%
2% 30% 31% 17%
Industrial
Industrial Industrial
Heavy-duty Heavy-duty Heavy-duty

April 21, 2010 Fiat Investor Day 4

Passenger & Commercial Vehicles
Major achievements during last 4 years

New technologies transferred to production

Gasoline: MultiAir & TwinAir
Diesel: MultiJet II
Transmissions: Dual Dry Clutch Technology

New product launches

Gasoline: Fire T-jet, 1.8 Turbo GDI, E-torQ
Diesel: 1.9 Twin turbo, 1.6 Midsize diesel engine
Transmissions: new Manual 6 speed C635

International expansion
Supported FGA in India & China
Exploited BCC opportunities leveraging on local JVs

...but...

Development of non-captive sales down,

mainly due to reduced GM activity (-75%)

April 21, 2010 Fiat Investor Day 5

Passenger & Commercial Vehicles
2010-2014 goals

Target Action Delivering

Leadership in CO2 Deployment of Positive cash flow for

emissions through new MultiAir & MultiJet II each plan year with
and cost effective for diesel engines and average EBITDA over
technologies MultiAir2 for gasoline plan period exceeding
engines
10%
Continued
development of
alternative propulsion
systems (CNG &
hybrid)

April 21, 2010 Fiat Investor Day 6

Passenger & Commercial Vehicles
Leveraging on MultiAir & common-rail technologies

New breed of technologies to achieve CO2

reduction in combustion engines
2nd generation MultiAir technology
In-house development of advanced turbo-charging systems
MultiAir coupled with GDI technology

Extension of MultiAir technology to diesel engines combined

with new IP in EGR control functionality

Innovative MultiJet II servo-valve

Full deployment of MultiJet II

Digital injection rate shaping bringing
Up to 3% lower CO2 emissions
Up to 20% lower NOx emissions

Greater accuracy in fuel injection

quantity control
Noise and driveability improvement
Multijet Multijet II

April 21, 2010 Fiat Investor Day 7

Passenger & Commercial Vehicles
Small and hybrid Dual-Clutch Transmission

New small Dual Dry Clutch Transmission

To extend dual-clutch transmission technology to A-B segments

To be the basis for a compact, low-weight and low-cost Hybrid Powertrain
Add-on option of baseline powertrain minimizing specific investments and
R&D costs

Add-on
electric motor

Base version Hybrid Small

April 21, 2010 Fiat Investor Day 8

Passenger & Commercial Vehicles
Hybrid powertrain concept for city-car

24% reduction* of CO2 emissions in urban driving cycle

~80 g/km CO2 in NEDC cycle

~ 69 g/km CO2 combined with CNG

TwinAir turbo
engine + New hybrid small Dual Dry
Clutch Transmission

* When compared to base engine with manual transmission

April 21, 2010 Fiat Investor Day 9

Passenger & Commercial Vehicles
Gasoline engine portfolio in 2014

300
Chrysler
Pentastar
3.3L-3.6L
273-288Hp
250
1750 TC GDI
200-235Hp

200
Chrysler WGE
2.0L-2.4L
Fire 165-186Hp
Power (Hp)

1.4L
150 69-170Hp
NA/TC
Gas/CNG/Flex Air-torQ
MultiAir 2 1.6L-1.8L
125-140Hp
Twin E-torQ
100 Air 1.6L-1.8L
0.9L 115-125Hp
65-105Hp
NA/TC
Gas/CNG

50 Fire
1.0L-1.2L
70Hp
Gas/Flex

0
0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0
Displacement (L)
Engine family
Under development NA: Naturally Aspirated TC: Turbocharged CNG: Compressed Natural Gas GDI: Gasoline Direct Injection

April 21, 2010 Fiat Investor Day 10

Passenger & Commercial Vehicles
Diesel engine portfolio in 2014

V6
250 3.0L
225-250hp

200 2.8L
197hp

Fam. B
2.0L
135-140-170hp
150 FGT/VGT/VGT
Power (hp)

Fam. B
1.6L
90-105-120hp
100 SDE VGT/FGT/VGT
1.3L
75-85-95hp
FGT/VGT/VGT

50

0
1,0 1,5 2,0 2,5 3,0
Displacement (L)
Engine family
Under development FGT: Fixed Geometry Turbine VGT: Variable Geometry Turbine

April 21, 2010 Fiat Investor Day 11

Passenger & Commercial Vehicles
Transmission portfolio* in 2014

Gears Transmission

C625 TCT C635 TCT AWD

Dual-clutch
Small DDCT C635 TCT

Automated
6s manual M40
(MTA)

Manual C514 C635 M40

Transmission
Automated Portfolio

manual C514 C510

(MTA)
5s
C514 C510
Manual
C513

Torque (Nm)

* Ex transmission development plan for Chrysler

Under development TCT: Twin Clutch Transmission AWD: All Wheel Drive DDCT: Dual Dry Clutch Transmission

April 21, 2010 Fiat Investor Day 12

Passenger & Commercial Vehicles
Third-party sales development (engines & transmissions)

Non-captive sales development leveraging on technology

leadership & extended product line-up

bn

Non-Captive
Non-Captive 24%
From 2009 9% ~1.6bn revenues to 2014
~0.3bn revenues
95% already contracted

Captive 91% 76% Captive

April 21, 2010 Fiat Investor Day 13

Passenger & Commercial Vehicles
Optimization of manufacturing footprint

Engines Transmissions
k units/year k units/year

5,100 4,950

4,550 4,600

3,500

3,100

2,450
2,300

350

2010 2014 2010 2014

Production JV production Installed capacity JV installed capacity normalized Harbour * capacity

*100k normalized Harbour capacity becomes ~160k (18 shifts/week)

April 21, 2010 Fiat Investor Day 14
Industrial & Marine
Major achievements over last plan period

New technologies transferred to production

Common rail technology introduced on heavy duty engines
Twin stage turbo technology on Light and Heavy Duty engines
Diesel hybrid powertrain on Light Duty vehicles

New launches
F5C: 3.2L 4-cylinder engine for off-road applications
Cursor 9: 6-cylinder engine with common-rail
injection for Heavy Duty applications

International expansion
Set-up JV in China for industrial engines
Exploited sourcing opportunities leveraging on China JV
F1A localization in Russia under implementation
R&D centers established in Shanghai and Chicago

Original target for non-captive business (33%) achieved

notwithstanding worldwide activity slump for sector

April 21, 2010 Fiat Investor Day 15

Industrial & Marine
2010-2014 goals

Target Action Delivering

Cost of ownership Leveraging on Positive cash flow for

reduction through proprietary SCR to each plan year with
deployment of new reach cost and fuel average EBITDA over
and cost effective efficient emissions plan period exceeding
technologies 10%
Extending MultiAir
Increase in non- technology to diesel
captive business applications
Increasing in-house
understanding &
development of
turbine technology

April 21, 2010 Fiat Investor Day 16

Industrial & Marine
FPT SCR technology

FPT SCR technology provides a very high NOx conversion efficiency

(higher than 95% versus current 80-85%), due to advanced and
proprietary control strategies
Possible to comply with current and future emissions limits without
EGR, maximizing overall fuel economy
To further improve operating cost, when required, a light EGR
(~10%) may be applied
Because of lower EGR amount
soot emission can be controlled mainly with DPF passive regeneration
no need to increase cooling power and modify vehicle cooling system

Urea
CO
HC N2

DOC DPF SCR CO2

PM H2O
NOX

DOC: Diesel Oxidation Catalyst EGR: Exhaust Gas Recirculation

DPF: Diesel Particulate Filter SCR: Selective Catalytic Reduction
April 21, 2010 Fiat Investor Day 17
Industrial & Marine
MultiAir technology applied to diesel engines

Combination of flexible internal EGR and dynamic air mass flow

control yields 2-4% reduction in operating costs (both fuel and
Urea)

Diesel MultiAir Cursor Heavy Duty engine

electro-hydraulic actuator diesel MultiAir

April 21, 2010 Fiat Investor Day 18

Industrial & Marine
Engine portfolio in 2014 (on- & off-road)

900
Vector
20L
768-870hp
800

Cursor
9L-11L-13L-16L
700 360-757hp
WG/VGT/TST

600
Power (hp)

500

400

F1
300 2.3L-3.0L
116-205hp
WG/VGT/TST

200
NEF
4.5L-6.7L
81-320hp
100 WG/VGT
F5C
3.4L
53-115hp
0
2 4 6 8 10 12 14 16 18 20
Displacement (L)
Engine family
Under development WG: Wastegate VGT: Variable Geometry Turbine TST: Two-stage Turbo

April 21, 2010 Fiat Investor Day 19

Industrial & Marine
Development of transmission portfolio (Light Duty)

Gears Light Duty Transmission

5s ML40

2010

6s ML30

Transmission
Portfolio

2014 6s ML35 ML40 ML50

Torque (Nm)

Under development
April 21, 2010 Fiat Investor Day 20
Industrial & Marine
Development of rear axle portfolio

Rear axles

Transmission
Portfolio

Medium Medium Heavy Medium & Heavy Tandem

2010 Light
Light SR HR HR HR

Transmission
Portfolio

Medium Medium
2014 Light
Light SR HR
Heavy HR Medium & Heavy Tandem
HR

Gross Axle Weight (ton)

Under development SR: Single Reduction HR: Hub Reduction

April 21, 2010 Fiat Investor Day 21
Industrial & Marine
Non-captive sales development

Non-captive sales increase by leveraging on technology leadership &

extended product line-up

bn

Non-captive
Non-captive
47%
From 2009 33% to 2014
~1.7bn revenues
~0.5bn revenues
75% already contracted

Captive 67% 53% Captive

April 21, 2010 Fiat Investor Day 22

Industrial & Marine
Optimization of manufacturing footprint

Engines Transmissions
k units/year
k units/year

450

350 350

350 200

2010 2014 2010 2014

Production Axle Production Installed Capacity Axle Capacity normalized Harbour * capacity

*100k normalized Harbour capacity becomes ~160k (18 shifts/week)

April 21, 2010 Fiat Investor Day 23
FPT Powertrain Technologies
Optimization of manufacturing footprint

Engines Transmissions
k units/year k units/year

5,450
5,300

3,550

2,500

350

2010 2014 2010 2014

Production Axle Production Installed Capacity Axle Capacity normalized Harbour * capacity

*100k normalized Harbour capacity becomes ~160k (18 shifts/week)

April 21, 2010 Fiat Investor Day 24
FPT Powertrain Technologies
Improvements in product competitiveness

Combined crash programs

to create a breakthrough in product cost by 2014

Technical
savings WCM
efficiency
War Room improvement
Project plan
~0.3bn run rate
~0.3bn run rate ~0.4bn
~2% yearly run rate
savings in
direct material ~14% reduction in ~8% yearly
costs product costs from savings in
2013 manufacturing
costs
Commercial
savings

Total Expected Savings: ~1.0bn run rate

April 21, 2010 Fiat Investor Day 25
Financials
Capex

April 21, 2010 Fiat Investor Day 26

2010-14 Financial targets

Nearly breakeven operating cash flow

in 2010; cash flow positive thereafter

April 21, 2010 Fiat Investor Day 27

FPT Powertrain Technologies
Our way forward

LEADERSHIP IN
COST EFFICIENT & INNOVATIVE TECHNOLOGIES
CO2 EMISSIONS

FIRST-TO-MARKET NON-CAPTIVE
INTERNATIONAL COMPETITIVE ADVANTAGE SALES DEVELOPMENT
ALLIANCES TO CAPTIVE focused on major
COMPANIES 2(0V

CONTINUOUS FOCUS ON OPERATING PERFORMANCE

COST REDUCTION
CONTINUING OPTIMIZATION OF INDUSTRIAL FOOTPRINT

April 21, 2010 Fiat Investor Day 28