1. Engine, Transmission, & Drivetrain
Global Powertrain Analysis
Engine, Transmission, & Drivetrain
Trends and Outlook
September 16, 2015
Brian Maxim
Vice President, Global Powertrain Forecasting

2. Global Engine & Transmission Analysis

3. Global Engine Volumes (By Major Configuration)
198%
Growth 3

4. Global Engine Trends Programs gravitating down similar paths
Smaller engine programs looking fairly similar
2.0L I4 GDI Turbo
Still replacing smaller V6s
Offered as upgrade to non-turbo 2.0L
1.5L GDI Turbo
Some are 1.4L or 1.6L
Replacing larger I4s
1.0L GDI Turbo
Replacing medium and small I3/I4s
3.0L 6-cylinder with GDI
3.0L is a global approach
Fiat Chrysler (FCA), GM and Ford differ slightly
V8s diverge
Reserved more for sports cars and truck based vehicles
Non-NA assemblers choosing GDI
NA assemblers going different paths, embracing different technologies 4

5. Accelerated Global GDI Adoption5

6. Light Vehicle Diesel Volume Analysis
Most growth from Asia
India and China lead the way
West Europe stabilizing
Mild growth in North America
North America adding applications
Small diesels on full-sized pickups
Some car offerings increasing slightly
Fuel and purchase price cost pressures still a factor 6

7. Light Vehicle Hybrid Volume Analysis
Global growth expected
China may finally be picking up some steam
Many new hybrids planned
Toyota is clear leader
Ford planning significant increases
Regional volumes are based on vehicle production
Many hybrids are exported from OEM’s home market
North America is planning to add applications and volume
Attempting to meet future fuel economy related mandates
Recent significant pressure from low fuel prices and fickle consumers 7

8. Light Vehicle EV Volume Analysis
Global growth expected
China may finally be picking up some steam
Many high-end sports car models being added
All major OEMs adding applications and volume
Strong North American growth
Tesla and Renault/Nissan lead the way
Smaller volumes from traditional manufacturers
Low fuel prices hurt budget market vehicles 8

9. North American Engine Volumes (By Major Configuration)
742%
Growth 9

10. North American Engine Trends
OEMs developing similar programs
Smaller engine programs looking fairly similar
2.0L I4 GDI Turbo
1.4L -1.5L GDI Turbo
Replacing larger I4s
3.6L V6s for FCA and GM
Ford taking a more fractured approach
2.7L V6 EcoBoost
3.3L V6 non-EcoBoost
3.5L V6 sticks around
V8s diverge
GM keeping OHV, but utilizing add-on technologies and reducing friction
Fiat-Chrysler keeping OHV but utilizing add-on technologies
Ford using more expensive OHC technologies 10

11. Global Transmission Trends By Type
Manuals still dominate
Europe and developing markets pushing volume
DCTs and CVTs gaining ground 11

12. Global Automatic Adoption (Traditional Automatics)
Influenced by North America and Europe
Asia Volumes mostly from China
North America prefers the traditional automatic
Europe prefers manuals, keeping volumes low 12

13. Global CVT Adoption 13 Strong Japanese Influence
Asia volumes mostly Japan with some in China
NA a result of Japan
Other regions prefer DCTs and automatics 13

14. Global DCT Adoption 14 Strong European Influence
Asia Volumes mostly from China
Europe volumes fairly low due to preferring manuals
North America influenced some by Europe 14

15. North America Transmission Trends15

16. Recent Powertrain Developments
Evolving transmission programs
GM/Ford FWD transmission agreement
Larger 9-speed to be replaced by an 8-speed
Ford to add small 8-speed to lineup
To be built in 3 plants around the world
Will replace some medium 9-speeds, at lower end
Primarily replacing automatic 6-speeds and some DCTs
CVT programs for Ford and GM coming back
Both are planning CVTs again, in lower volumes
Ford applications are for non-North American vehicles
Magna acquisition of Getrag
Will greatly expand Magna drivetrain portfolio
Will lead to closer relationship with Ford through Getrag/Ford JVs
Ford to offer small diesel in F-150
3.0L V6 to combat current Ram and future GM offerings 16

17. Recent Powertrain Developments (cont.)
Falling fuel prices – fuel economy less important
Consumers choosing larger engines again
Choosing different vehicles with larger engines
Choosing larger engines within the vehicle category
Hybrid and EV growth slowing
More difficult to justify added costs and/or compromises
China is bucking the trend and growing
Small diesel programs being revived for pickups
Sales of fuel efficient vehicles in North America are driven more by government incentives and mandates than by consumer preferences
* From the Transportation Research Institute, University of Michigan 17

18. Global Drivetrain Analysis
Systems and Market Trends

19. 4WD/AWD Systems – Brief Overview
There are three basic 4WD/AWD systems
Transfer Cases
An additional “gearbox” in conjunction with the transmission which allows for the selection of neutral and at least one gear ratio, but usually two
Ford F150
Jeep Grand Cherokee
Torque Adjustable Couplings
Allows for sending mechanical forces to the other set of tires not normally powered by the transmission
BMW X-Drive
Chevrolet Equinox
Subaru Outback
Electronic AWD
Two or four wheels of the vehicles are powered by electric motors
Toyota Highlander Hybrid
Tesla Model X 19

20. North American AWD/4WD Volumes (By Drive Type)
Volvo effect
Tesla effect 20

21. European AWD/4WD Volumes (By Drive Type)
Porsche Pajun
effect 21

22. European Market Trends
Mild growth of AWD/4WD
As vehicle prices rise, more new vehicle purchases have a greater amount of options, including AWD/4WD
Consumers looking to purchase less expensive products moving toward the used car market
Growth in “CUVs” not pushing AWD growth as much
Most European CUVs are just normal hatchbacks that have been raised higher
Most of these vehicles do not offer AWD systems
European consumers do not purchase vehicles with AWD/4WD systems as much as other regions
For example, UK consumers do not opt AWD/4WD systems 22

23. Full Size Truck Comparison (Best gasoline engine fuel economy)
Ram Pickup
(Base & Fuel Economy)
Ford F-150
(Fuel Economy)
Chevrolet Silverado
(Base)
Curb Weight (lbs.)
4,503
4,168
4,521
4,050
Length/Width/Height (in.)
209.0/79.4/74.6
209.3/79.9/75.5
205.6/80.0/74.0
Engine
3.6L V6 DOHC
2.7L V6 DOHC TwinTurbo
4.3L V6 OHV
3.5L V6 DOHC
Transmission
8-Speed Automatic
6-Speed Automatic
HP (SAE net)
Torque (lb.-ft.)
GVWR (lbs.)
6,025
6,010
6,500
Towing Capacity (lbs.)
4,970
7,600
6,100
5,100
Payload (lbs.)
1,522
1,800
1,950
1,910
Fuel Economy (mpg)
(city/highway/combined)
17/25/20
19/26/22
18/24/20
18/25/20
Cost (MSRP)
$25,660
$26,825
$26,520
$26,030 23
2015MY, Standard cab, 6.5 foot box, 2WD, width without mirrors

24. Powertrain Relationships

25. OEM Agreements and Outsourcing Continues
Significant agreements for diesels
Ford heavily relies on PSA designs
Buys some from PSA, but builds most themselves
GM uses several different diesel designs
Builds and uses designs from Isuzu, VM Motori and FCA around the world
FCA sources diesels from Cummins and VM Motori for Ram Pickups
Gasoline engine designs
GM’s L850 I4 engines
The “L” stands for Lotus, the primary designer
GM has greatly refined the engine since
Hyundai’s Zeta (Theta) I4 family
Used by FCA and Mitsubishi
Aston Martin will use Mercedes engines
Currently uses Ford based engines – from previous ownership
Nissan building and using Mercedes 2.0L Turbo I4
Built in Decherd for MB and Nissan in North America 25

26. OEM Agreements and Outsourcing Continues (Cont.)
Transmission agreements
Significant cooperation between Ford and GM in North America
GM is primary designer of FWD transmissions
Ford makes adjustments to give them a Ford flavor
Started with the current mid and large A6s
Will extend to future A8s and A9s
Ford will produce them in their own plants
Ford is primary designer of RWD transmissions
GM will make adjustments to give them a GM flavor
Includes 10-speed units for trucks and large SUVs
GM will produce them in their own plants
FCA heavily relying on ZF
FCA licensed designs and is producing them in their own plants
8-speed RWD automatics for trucks
9-speed FWD automatics for medium and larger FWD vehicles
Most recently Magna’s purchase of Getrag
Highlights how transmissions are becoming a huge area of growth
Significant experience and volume of DCTs 26

27. Mandates

28. Can OEMs meet future MPG Targets?
Misconceptions of the 54.5 mpg target for the 2025MY
The 2025MY target has not been mandated
A mid-term meeting in 2017 is when the EPA and NHTSA will determine what the target will be for 2025MY and the schedule to get there
The 54.5 mpg target is not a CAFE target
Future fuel economy targets are not directly mandated
OEMs must meet various emissions targets, including a CO2 target which effectively equates to fuel economy (2025 = 163 grams/mile)
All light vehicles do not have to meet the 54.5 mpg target
Actual CO2 targets are based on footprint (shadow) of each vehicle
Larger vehicles have an easier target than smaller vehicles
Different targets exist for cars (143 g/mi) and light trucks (203 g/mi)
Each OEM does not have to meet the 54.5 mpg target
Targets are determined by individual product lines and their footprints
No pressure to build small cars to offset fuel economy of large cars
No pressure to build cars to offset fuel economy of pickups and SUVs 28

29. Can OEMs meet future MPG Targets? (Cont.)
What are the hard targets?
2017MY – 2021MY have been mandated
2022MY – 2025MY have not been mandated
Uses the CO2 Model
2017MY
2018MY
2019MY
2020MY
2021MY
2022MY
2023MY
2024MY
2025MY
Cars (g/mi)
212
202
191
182
172
164
157
150
143
Light Trucks (g/mi)
295
285
277
269
249
237
225
214
203
Combined - Cars & Light Trucks (g/mi)
243
232
222
213
199
190
180
171
163
MPG Equivalent for Combined
36.6
38.3
40.0
41.7
44.7
46.8
49.4
52.0
54.5
Credit Banking and Trading (same as 2012MY-2016MY rules)
Credits may be carried for 3 years to offset a deficit in a previous year
Credits may be banked for 5 years for future offsets
Credits may be traded between companies 29

30. Can OEMs meet future MPG Targets? (Cont.)
Credits for implementing new technologies
Credits can be earned to help achieve targets
Multiplier concept adopted for alternative powered vehicles
Each vehicle is multiplied by a factor in meeting emissions targets for the 2017MY to 2021MY timeframe – 2022MY+ uses no multipliers
EVs and FCVs (2.0 in 2017MY going to 1.5 in 2021MY)
PHEVs and CNG (1.6 in 2017MY going to 1.3 in 2021MY)
Full-Size Pickup Hybridization Credits
Mild HEV - 10g/mi credit for each vehicle, if used on at least 20% in 2017MY full-size pickups, ramping up to 80% in 2021MY
Strong HEV – 20g/mi credit for each vehicle, if used on at least 10% of pickups
Air Conditioning credits
Using systems that reduce tailpipe CO2 through efficiency improvements
Using refrigerants with much less hydrofluorocarbons (HFCs)
Off-Cycle credits (efficiency gains not reflected in test cycles)
Solar panels on hybrids
Start/stop systems
Active aerodynamics
Others – If OEM can provide proof that gains exist 30

31. Future Powertrain Technologies
Areas of significant promise
Compression ignition direct injected gasoline engines (CIDI)
Currently considered the holy grail for gasoline internal combustion
Mazda claims release of SkyActive generation 2 around 2020 with CIDI
Electronic Valvetrain
Has been in development for a fairly long time
Difficulty meeting velocity of operation requirements
Innovative concepts
New battery chemistry for EVs and hybrids
Increasing power density and shortening recharge times
More a question of when, rather than if
Improved catalysts for better emissions
Greatly helping with cold start emissions
Resurgence of 2-stroke
Possible revival using new technologies not previously available
OEMS are continually going to push on their supply base to help meet current and potential future mandates and differentiate them in the market place. 31

32. Engine, Transmission, & Drivetrain
Global Powertrain Analysis
Engine, Transmission, & Drivetrain
Trends and Outlook
September 16, 2015
Brian Maxim
Vice President, Global Powertrain Forecasting