Derek de Bono

Group Product Marketing Director

Fuel efficient cars: good for the economy?

The impact of CO2 legislation

I December 2012 I 2

Valeo’s areas of expertises: aimed at accompanying our Customers along automotive market trends in all regions

1 - Reduction of CO2 Emissions / Fuel Consumption

2 - Connected Car

Driving

Assistance

Wiper

Systems

Lighting

Systems

HVAC /

Engine

Cooling /

Compressors

Transmission

s

Interior

Controls

Electrical

Systems

I December 2012 I 3

Valeo at a Glance

28 Countries

As of April 2011

I December 2012 I 4

€10.9Bn 2011 sales Dec 2011 figures

Valeo at a Glance

21Research Centers

40 Development Centers

68,000 People

124 Sites

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Powertrain Systems Business Group Focus on torque transfer and electrical systems (machines + electronics)

Electronics for e-Machines

High Power Electronics for HEVs & EVs

Control & Electric Network

Electronics Product Group

- CO2 Emission Reduction

Transmission Systems Product Group

Automatic Transmissions

Powershift Transmissions

Manual Transmissions

Friction Materials

Hydraulic Clutch Actuation

Combustion Engine Product Group

EMS ECUs

Actuators & Sensors

Boost & Coolant Control

Exhaust & Air Control

Air Charging Systems

System Engineering & Transversal Innovation

- Hybrid and Electric

- Pollutants Emission Reduction

Electrical Systems Product Group

Alternators

Electric Motors

Belt Starter Generator

Reinforced Starters

Starters

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Thermal Systems Innovations in thermal management from powertrain to cabin

Engine Air Intake Systems &

Components Engine Cooling Systems

New condensers technology

Fan systems

Battery thermal management

Complete technology range

HVAC module

Full range from low cost to high end modules

Compressors and A/C cooling loop

New EDC

New exchangers

Air quality in cabin

Advanced filter technology

Aroma diffusion

Front-end modules

Active grill shutters

Pedestrian Safety

Electrified Vehicles

HP systems

HV heaters

I December 2012 I 7

Historical fleet CO2 emissions performance and current or proposed standards

US 2025:107 (4.6l/100km)

EU 2020: 95 (4l/100km)

Japan 2020: 105 (4.5l/100km)

China 2020: 117 (5l/100km)

90

110

130

150

170

190

210

230

250

270

2000 2005 2010 2015 2020 2025

Gra

ms

CO

2 p

er

kil

om

ete

r, n

orm

ali

ze

d t

o N

ED

C

US-LDV

California-LDV

Canada-LDV

EU

Japan

China

S. Korea

Australia

Solid dots and lines: historical performance

Solid dots and dashed lines: enacted targets

Solid dots and dotted lines: proposed targets

Hollow dots and dotted lines: unannounced proposal

[1] China's target reflects gasoline fleet scenario. If including other fuel types, the target will be lower.

[2] US and Canada light-duty vehicles include light-commercial vehicles.

US 2020: 144 (6.2 l/100km)

Leads to increased electrification, engine rightsizing, increased transmission automation

I December 2012 I 8

What kind of powertrain in 2030 ? 2030

0%

9%

29%

1%0%

8%

9%

4%2%

12%

15%

10%18%

17%

12%

26%17%

28%

18%

17%

60%

17%10%

36%

Deglobalisation Learning green SR dvt Liberal WorldDeglo-

balisation Learning

Green SR Dvt

Liberal World

Internal Combustion Engines without electrification will disappear

Range Extender, Plug-in Hybrid & Mild become the mainstream out of the EV story

Percent of vehicles with pure electric drive is most affected by scenarios

Joint Work: OEM

I December 2012 I 9

1st Conclusions from scenario analysis:

RISE OF THE HYBRIDS Mild and full hybrid motorization get mainstream in every scenario and minimize risk as they act as balance between ICE and Plug-in vehicles.

RELATIVE FALL OF DIESEL The tightening of depollution norms and the development of gasoline hybrids foster the decline of diesel shares in LV markets.

TOO EARLY FOR BEVs? High battery costs make BEVs uncompetitive until 2020

BEVs CONFINED IN SMALL SEGMENTS AND VANS BEVs confined in niches with high mileage and small power requirement

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Innovation Focus

Product differentiating Factor :

Design to cost mild hybrid system to offer the best cost / CO2 saving ratio

Innovative Components Characteristics :

Key Benefits :

• 13% CO2 reduction/Fuel Economy on NEDC vs. baseline

• Improved drivability / premium stop-start (stop time decrease, fast

restart, almost no vibrations)

• Voltage : 48V avoiding network protection features

(no safety constraints)

• Integrated Belt Starter Generator

• DC/DC Converter 48 – 12 V (2,5 kW, bidirectional power flow)

• Energy storage system* : Ultra-capacitors or Lithium Ion batteries, for

cost and vehicle weight reduction

• System integration : minimal investments, specific belt tensioning for

belt starter alternator

Democar

* Developed by Partner

I December 2012 I 11

Innovation Focus Combined Inverter Charger

Product differentiating Factor :

Fast charger integrated in the inverter, allowing weight, cost & size reduction of the full drive train

System Overview : Innovative Components Characteristics :

• Almost free fast charging function

• Scalability from 30 to 120 kW using the same power module & battery

capacity independent (from 100V to 800V)

• Compliance with European / U.S. grid networks and vehicle to grid ready

• Voltage Step-up

• Fast & Slow charging using e-Motor self inductance

• H-bridge (High power charger, reliability)

• Merge of inverter & charger

(charger costs are only EMC filters & connectors)

• Standard Power Module (30 to 120 kW)

Key Benefits :

I December 2012 I 12

Conclusion

Valeo product strategy focused on:

1. CO2 reduction:

Increased electrification with affordable solutions

Improved weight and energy efficiency

Engine downsizing or “right” sizing

2. Safe Driving + Safe interaction

“Intuitive Driving”

Clear legislation leads to a focused product strategy

I December 2012 I 14

Four scenarios Contrasted Scenarios

14

Liberal World

A dynamic growth without any Fuel economy measures high oil prices (demand)

Learning Green the Hard Way

2014 oil price peak US and China go to green technologies

« Kyoto-type » consensus is built.

GDP impacted in the short term but the effort is global.

Deglobalisation

2014 oil price peak

Financial crisis in the US multipolar world.

Emerging countries slow down. Developed countries less impacted

Benefit from cheap energy.

Sustainable Responsible Development

Industrialized countries protect their markets with security and environmental norms.

Developing countries adapt with a delay and grow on their internal markets.