IT IS a very busy period for Magneti Marelli. Fiat SpA is increasing its stake in the company from 70 percent to 100 percent. And, after Fiat and GM announced their global tie-up in the spring, Magneti Marelli is working out how it fits into the new structure. Domenico Bordone, Magneti Marelli's president and CEO, spoke to Automotive News Europe's Luca Ciferri about how the company is rethinking its core areas of product specialization, and, at the bottom of the paage, how Magneti Marelli is hoping to benefit from new business opportunities created by changes at Fiat.
Magneti Marelli's restructuring program seems to have been going on for a long time. How far is the company from its stated intention of becoming a provider of sophisticated systems and services, rather than just an auto parts supplier?
I prefer to talk about reorganization rather than restructuring. The largest part of the work is now done, but continuous improvement is an endless process. We have set many ambitious targets and we are working hard to achieve them.
What are Magneti Marelli's three biggest goals?
To double the revenues of our 'Infomobility' (on-board communications) division. To reduce our dependence on Fiat in suspension systems. And to become a significant player in the diesel electronic engine control unit business.
How will you double your 'Infomobility' business?
We have won a contract to supply 100 percent of PSA/Peugeot-Citroen's telematic modules. We will also supply telematic modules for the new Alfa Romeo 147 and Fiat Tipo C (the forthcoming replacement for the Bravo and Brava). VIASAT, our satellite joint-venture service with Telecom Italia, is attracting 3,500 new customers a month, which is a good achievement considering it is still only an aftermarket product. We are also close to announcing a major alliance with a European mobile phone maker to develop new technologies for cars.
Basically, our approach to the 'Infomobility' sector has not been to expand the potential of the car stereo, but to put a true personal computer within the car. Innovation is really endless in this sector.
How will you become a leading supplier of suspension systems?
We got into this business by purchasing Fiat Auto's suspension operations all over the world, and adding them to our shock absorber operations. Now we are a global supplier of complete suspension systems, and we are able to design complete systems from the beginning. We are in a good position as the market moves toward an electronically controlled corner module.
We are very confident of continuing our growth in this sector. Unfortunately I am not in a position to make a specific announcement about this growth yet.
What are your plans for diesel electronic engine control units?
We will supply 450,000 electronic control units for the new 1.2-liter, 4-cylinder turbodiesel engine that Fiat and GM will begin building in Poland in late 2002.
It is the only formal contract that we have signed so far, but there are many other talks going on - including projects involving 5- and 6-cylinder units. In the longer term, we want to achieve the same market share with diesel engine management that we have in Europe for gasoline engine management - around 20 percent.
To become a system supplier for the Fiat/GM turbodiesel, we will buy the injectors and the high-pressure pump from Robert Bosch.
Will you make any of these bought-in components in future?
Not the pump, because economies of scale work against us. It is different for the injectors. In this area, there is still a debate about what will be the leading technology in the future. The second generation of injectors, to debut this autumn, will be built under Magneti Marelli patents -so we have the technology.
You have between four and six injectors for every control unit you supply, so you can quickly reach the critical mass to be competitive as a manufacturer of these components. We could begin building injectors, but no decision has been taken yet.
What will happen to your 50-50 lighting joint venture with Bosch?
Magneti Marelli's commitment to the lighting sector remains strong. It is - and it will remain - one of our core activities. Bosch decided to reduce its stake in the joint venture, and we are increasing our stake from 50 percent to 75 percent. But Bosch remains an active partner.
Our Automotive Lighting operation was already very strong in the headlamp sector. With the addition of (rival Italian auto components supplier) Seima - which we bought at the end of 1999 - we now have the same strength in rear lamps.
We are not changing our locations. The headquarters and research center for Automotive Lighting will remain in Germany. One day we may decide it is no longer necessary to have the holding company based in Austria, which was chosen as a neutral territory for an Italian-German joint venture.
How is your robotized gearbox command, the Selespeed, performing?
Volumes are growing slowly, but the range of applications is widening. It began with an exotic car - the Ferrari F355. Then Alfa Romeo launched a Selespeed version of the 156. The latest application is the new Mercedes-Benz Sprinter van. This trend shows how flexible the Selespeed system is.
We are currently working on a new generation that permits faster gear changes.
My only concern with the Selespeed is whether we have enough technical resources within Magneti Marelli to develop all the possible applications that our customers may demand.
How far away is a single, fully independent control for an engine valve?
Together with a European carmaker, we are in the advanced development phase of an electromagnetic valve control for an upscale model. It could be on the market three years from now. Compared with other experimental systems, it offers a clear advantage: a reasonable consumption of electricity.
Despite this, I believe electromagnetic valve control is too complicated to become a volume product.
For volume products, an electro-hydraulic valve control could be the right solution. It is not as sophisticated as an electromagnetic system, but it still represents a big improvement on current options at a reasonable cost.
You supply engine management systems to many Formula One teams. Who are your partners? Why is electromagnetic valve control not being used in Formula One at the moment?
We supply the complete engine management control to Ferrari, BMW and Supertec, plus some components to Honda. We are already working with Toyota and with Renault for its official comeback in 2002. As far as valve control is concerned, when you have engines running at almost 19,000rpm, we do not have any system that can to match such a rotation level.
How fast is gasoline direct injection technology developing in Europe?
We are developing different solutions with different carmakers. The market introduction of new technology depends on the availability of a new generation of catalytic converters. Everyone is working on that, but I am not aware of any solution that meets Europe's new emissions standards using a true lean-burn combustion system.
For a system supplier like Magneti Marelli, it is important to note that the engine control units of the next generation of high-pressure turbodiesels are converging toward those of gasoline direct injection systems.