What is the business outlook for Magneti Marelli and the rest of the supplier industry?
Europe was very good in the final quarter last year and in the first quarter this year. The second quarter is still decent. Volumes are declining, but mix is improving. What will happen starting in the third quarter is really a big question mark. If the expected economic recovery is indeed weaker -- or delayed -- things will obviously get tougher. Luckily, demand in Latin America, the United States and China is picking up, therefore Marelli's global outlook remains cautiously optimistic.
What effect, if any, will Greece's debt crisis have on the recovery of the European auto market?
It is too soon to make a precise forecast. Nevertheless, the Greek crisis follows medium-term predictions that already were not so encouraging. Our 2010-2014 plan was based on the assumption European production would return to 2007 levels by 2014 at the earliest.
What future do you see for fuel-saving technologies such as stop-start systems?
I would love to see it become a compulsory technology. The added cost is minimal but the benefits are substantial: 5 percent less fuel consumption and emissions in the homologation cycle and reductions of 8 percent to 10 percent in actual city driving.
Which carmakers are using your stop-start system?
So far it is Fiat Group Automobiles (Alfa Romeo, Fiat and Lancia), but there are more to come.
Many industry watchers predict a bright future for electric vehicles. Do you agree?
For sure, by 2020 a small percentage of global sales will be electric vehicles. I think the penetration of pure electric vehicles will depend on the cost of batteries. If the cost per kilowatt hour by 2020 decreases to about 100 euros ($123), battery-powered vehicles have a great chance. But if the cost remains at about 300 euros to 400 euros per kilowatt hour, it is a much different story.
How do you translate the cost per kilowatt hours into something consumers can understand?
A city car needs a battery with 15 kilowatt hours of power. If the cost of this battery pack is about 1,500 euros and another 1,000 euros goes toward the [electric] motor, inverter and the control unit, the total cost is about 2,500 euros [for an electric powertrain]. This is roughly the same cost as a current internal combustion powertrain, therefore the market potential is huge. But if the battery pack alone costs more than 4,500 euros, the electric car is at risk of remaining a niche product.
What parts is Marelli working on for electric cars?
We are concentrating on electric motors, inverters and the electronic control unit. We have designed a full line of electric motors and a full range of inverters.
When will your products debut?
Between late 2012 and early 2013. As always, it depends on the launch schedule of the OEMs we are working with. What works to our advantage is that our range of motors and inverters can be used in both pure electric and hybrid vehicles.
Could China become the global leader in EV production?
I think China will be the biggest maker of electric vehicles in terms of volume. China has the resources and the commitment to prevail in electric mobility. The domestic automakers are not state-of-the-art in terms of internal combustion engine technology, thus they will heavily invest in electric mobility, which currently is a more level playfield.
Automaker are counting on fuel saving automatic transmissions to help reducing emissions. Which will prevail, automated manual or dual clutch transmissions?
Long term, probably dual clutch will prevail in compact and mid-sized cars, while AMTs will remain the most cost-effective solution for minicars, small cars and light commercial vehicles. Fortunately, we are well positioned with hydraulic commands and control units for both. We aim to sell 400,000 of our AMT systems this year compared with 220,000 in 2009. This year we are also launching a joint venture in China with SAIC to manufacture AMT hydraulic commands and control units for any automaker that wants them, so the growth potential is significant. AMT is off a good start in Brazil. We hope it also will be successful in India. With dual clutch, we are about to launch the first application on the Alfa Romeo MiTo. Our components will be part of Fiat Powertrain Technology's C635 gearbox. As this gearbox is part of FPT's global expansion into the US, China and Russia, the potential for our hydraulic commands and control units is appealing.
Why are you so bullish on Marelli's future in telematics?
In a few years, telematics boxes will become mandatory in many areas of the world. In Europe, E-call (emergency call) will probably be standard by 2012. Satellite-based antitheft systems will be compulsory in Brazil from July, creating a 4-million-unit-a-year market as they are required for cars, trucks, buses and motorcycles. The potential of telematics boxes is really enormous in term of applications such as the e-pay of tolls, traffic management related to dynamic and “green” navigation, fleet management, remote vehicle diagnosis, communication and entertainment. We have applications that run on Microsoft Windows for the systems we supply to Fiat. We also are developing applications that run on Linux open source operating systems for two other automakers that I cannot name at the moment.
With iPods and other infotainment systems entering the car is there a future for the CD player?
I think the CD player will tend to disappear.
After a promising start, many automakers have backed away from gasoline direct-injection systems. What is the future for GDI?
Direct injection is still more expensive than indirect injection but offers performance and fuel-consumption benefits, thus I think it will prevail over time. Right now, its spread varies depending to the automakers, but luckily we supply the Volkswagen Group, which is a strong believer of the technology across its entire range. Our direct injection production plant had been working three shifts a day, seven days a week, so we are very satisfied.