INOVAR-AUTO AND INNOVATION MANAGEMENT

INOVAR-AUTO AND INNOVATION MANAGEMENT How to get the expected results on time

Ricardo Simões de Abreu Global VP Engine Systems and components Product Development MAHLE Metal Leve S.A.

© MAHLE

Inovar-Auto and Innovation Management

Research and Development Centers

Stuttgart Detroit (Farmington Hills) Northampton

Tokyo (Okegawa)

1998 Shanghai Rugby 2002

2004

Tokyo (Kawagoe) 2004

São Paulo (Jundiaí)

2006

2001 2008 2

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Jundiaí Tech Center The Technological Center in Jundiaí , result of an investment of R$ 87 millions, is the largest center for engine components development in all Latin America.

3

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Common points from countries recognized as innovative



Innovation is triggered by necessity (legislations) or opportunity to improve competitiveness

(market demands). 

Innovation is the part of an appropriated environment. The innovation culture is part of the society.



The academy aims to bring products to the market and not only generates new knowledge.



The government support is mandatory to leverage innovation.



Innovation today must be quick, but it can not be done in a hurry. It must be planned well in advance and executed with discipline.



4

The risks and long term returns to assure future developments must be part of the strategy.

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Innovation is the part of an appropriated environment The innovation culture is part of the society 

Governmental Biofuel Programs

– 



5

Biodiesel Test Program B5 & B20

Partnerships –

Friction reduction thru oil lube developments

–

Oil oxidation in flex fuel engines

Technical Committees –

Energy Efficiency Committee

–

Renewable Fuels for Diesel Engines

–

Engine Powertrain standards

–

Turbocharger standards

–

Emission in Passengers Cars and Diesel Engines

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

The academy aims to bring products to the market and not only generates new knowledge

Consortium about tribology to future flex fueled engines

Consortium about lubrication in internal combustion engines

6

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

The government support is mandatory to leverage innovation

7

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Inovar-Auto Objectives 

Increase the regional content measured by the acquisition volume of parts



Ensure R&D investments (innovation)



Create basis to automotive engineering with self life and capability, not just to apply or





Increase the spending on Engineering and

look for existing technologies, but creating

Basic Industrial Technology

new technologies, generating value and

Increase the vehicles energetic efficiency:

intellectual property.

vehicle labeling (INMETRO) and CO2 emissions reduction

COMPETITIVE ADVANTAGE BY ACHIEVING MORE THAN THE BASIC LEVEL 8

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

IPI Incentives (+2p.p IPI) – Fuel Efficiency

Previous

INOVAR - AUTO

Since Dec 2011, cars with less than 65% of parts produced in Mercosur and Mexico are charged 30 p.p. additional IPI (between 37% and 55%)

Exemption of the 30 p.p. for cars that use more regional produced parts and have minimum 8 out of 12 manufacturing steps made locally (ex: stamping, welding, chassis assy.). Increasing to 10 in 2017

No incentives for fuel efficiency.

Starting 2017 till 2020, estimated national fleet average must show 12% reduction. The individual targets depend on vehicle weight and today efficiency level. BONUS INCENTIVES - If improvement in fuel economy is 15% an additional 1 p.p. IPI is deduced. For 18% reduction another 1 p.p. IPI is reduced.

9

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Available and Future Technologies 0% CO2

-10% CO2

-20% CO2 Combination of technologies is possible!

Downsizing (single turbo)

GDI General optimization

GDI + EGR*

(hom)*

(lean)

(Friction & Cooling)

Fully Variable Valvetrain

VVT/VVL*

EPS *

StartStop CO2 reduction potential

Inovar-Auto

*) -1% IPI -2% IPI

Available

Available

in Brazil

outside Brazil

VVT: Variable Valve Timing VVL: Variable Valve Lift GDI (hom): homogeneous Gasoline Direct Injection EGR: Exhaust Gas Recirculation EPS: Electric Power Steering (direct contribution to powertrain efficiency due to omission of hydraulic pump) Source: The Boston Consulting Group

10

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Available and Future Technologies 0% CO2

-10% CO2

-20% CO2 Lowest cost with available technologies

Downsizing (single turbo)

GDI

+Ethanol

(hom)*

General optimization (Friction & Cooling)

StartStop?!

Ca. 65% downsizing cost

Fully Variable Valvetrain

Ethanol as technology booster… VVT/VVL*

•EPS Higher efficiency, lower cost  more km per MJ Start•*Neutral well-to-wheel CO2 balance Stop • Renewable

Inovar-Auto

*)

CO22reduction reductionpotential potential CO

Available

Ethanol

Available

in Brazil

application

outside Brazil

GDI (hom): homogeneous Gasoline Direct Injection Source: The Boston Consulting Group + FEV&RWTH Aachen

-1% IPI -2% IPI 11

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

IPI Incentives (one p.p. IPI from 2013 to 2017) R&D (Innovation) I.

Basic research comprising activities to develop knowledge for new phenomena understanding,

aiming development of products, processes or innovative systems; II.

Applied research, comprising activities to develop knowledge, aiming improvement or development of products, processes and systems;

III.

Experimental development, comprising activities based on existing knowledge, aiming confirmation or demonstration of technical or functional viability of new products, processes, systems and services or, a clear improvement of already produced or established ones;

IV. Technical support services, namely the ones considered essential to the implementation and maintenance of the facilities or equipments exclusively dedicated to the execution of the research projects, development or technological innovation, as well as related human resources

development, directly related to the activities cited in previous items I, II and III.

12

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

3rd Phase

Innovation today must be quick, but it can not be done in a hurry

Ideation

Tech Incubation

2nd Phase

University

Processes

Product

Tech Incubation

Product

Ideation

1st Phase

Product

Adaptation

VA/VE

Adaptation

Process

Processes

Processes

Processes

Application

0

1

2

3

4

5

6

7

8

Execution Time (years) 13

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

1st Phase examples: Specific technologies adaptation Pendulous Oil pump

1º Ring



On demand oil flow to increase fuel economy Piston



Abrasive wear and dirt insensitiveness

2º Ring



Many possible adjustments

Oil ring



Whole life high volumetric efficiency (>92%)



Silent operation



Fuel consumption reduction of 1 - 3%

Pin

Connecting rod Bearings

PCU optimization: up to 2% Fuel economy 14

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

2nd Phase example: Polymeric bearing 

START STOP



Fuel consumption reduction of up to 3,5%

Stop-start conditions will increase wear on main bearings



Wear Evaluation After 100,000 stop-start cycles

Front main bearings must absorb combustion loads and extremely high belt loads often acting in opposite directions



Depending on the belt load vector, wear can be seen on lower shell or upper shell

Al bimetal

Al bimetal + polymer

After 100,000 start/stop cycles the wear of the Polymeric bearings is 10 times lower Effect of Belt Load on Front Main Bearing 15

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

3rd Phase examples: Advanced technologies Nanotechnology: With nanometric layers, its is possible to build a superior performance coating in durability combined with low friction

Polymers: High resistance to fatigue with wear resistance and friction reduction

Ceramic: Protection technology for corrosion and wear and low friction through new technologies

16

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Innovation must be planned well in advance and executed with discipline

Keep FOCUS Do the right THINGS Do the things RIGHT Reduce TIME-TO-MARKET

Customer

DG 0 Approval

17

DG 1 Concept Develop.

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

DG 2 Concept Validation

DG 3 Industrialization Process

DG 4 Post Launch

© MAHLE

Inovar-Auto and Innovation Management

The risks and long term returns must be accepted

Sales

5 New Products Launched

Start up

R&D Projects

37 New projects in R&D

Idea Allocation

106 New ideas

76% of the new products launched in the last 3 years sold to least one commercial application 18

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Assure future developments must be part of the strategy Increase of patent numbers in USA Patent cases filed

Patents granted

China intends to increase the number of patents to 1,5 mio/year until 2020.

Internals Externals Total

Patents applied in Brazil (PCT): 2011 = 31.000 2012 = 37.000 PCT (Patent Committee Treaty)

19

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Inovar-Auto and Innovation Management

Conclusion

Compared to international experience, Inovar-Auto is first step in the right direction. Long term targets and rules are necessary to trigger innovation. Brazilian experience with bio fuels must be part of the strategy to boost competitive advantage.

20

MAHLE Metal Leve S.A., Ricardo Simões de Abreu, October'13

© MAHLE

Thank you! [email protected]

21

© MAHLE