Tuesday, August 22, 2006

Iveco and Iveco Motors: The new brand for industrial engines

Iveco, belonging to the Fiat Group, is one of the leading European manufacturers of industrial vehicles and its name and reputation are internationally recognized. Iveco Motors is a new brand name created just over one year ago to distinguish all company activities related to the development, production and sales of diesel, spark-ignited gas engines and other driveline components. These are used internally to power Iveco trucks and buses and are also available in the marketplace to OEMs looking for power units to drive special on- and off-highway vehicles. These include engines for agriculture, construction and mining, marine propulsion--both work boats and pleasure craft--railway traction and power generation.

Iveco Motors diesel engines are available with displacements from 2.3-40 L, covering a power bracket between 401600 kW (54-2145 hp).

In this segment the present worldwide market is around 9.4 million engines per year, which is forecast to increase about 20% in the next four years.

Iveco Motors engine production in 2004 has reached more than 430,000 units and is still on the rise. With such production levels, Iveco Motors ranks fifth in the worldwide scale, well ahead of the sixth manufacturer which delivers only around 50% of Iveco's engine volume.

Such a prestigious role was made possible by continuous heavy investments in R&D, like the C85 million (US$108 million) in 2004, representing over 4% of its turnover.

Iveco's five European Engineering Centers, staffed by over 650 engineers and technicians, and equipped with 84 engine test benches and 50 special test rigs, have allowed the company to redesign and issue the whole line of engines to meet all future foreseeable emission standards. The present engine line complies with Euro 4--and soon to be upgraded to Euro 5--and Tier 3 emission limits.

This policy has made Iveco the only manufacturer worldwide having an entire engine line featuring only newly designed engine families. This leadership in technology and innovation is possible thanks to the strong captive customer base.

To OEMs outside the Fiat Group, Iveco Motors offers the entire diesel and spark-ignited engine range it produces at its engine plants in Foggia, south Italy for the light-duty Sofim and HPI engines; Torino, Italy, for the medium-duty NEF engines (1 L/cyl) and large (2.5 L/W1) Vector family; and Bourbon Lancy, France, for the volume produced heavy-duty Cursor family.

The customer base for the 430,000 engines produced in 2004 is subdivided into three segments: 9.5% for the open market, 39% for Iveco's own use and 51.5% for the key customers outside and within the Fiat Group.

Iveco Motors sales from the Powertrain business unit account for about 25% of total Iveco turnover. We are presently engaged in a market penetration program that will allow us to reach the 6.4% compound annual growth rate (CAGR) we have forecast for our activity in the next three years.

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