Vehicle Technology

ENABLING A BETTER AUTOMOTIVE WORLD 150 Stephenson Hwy, Troy, MI 48083 ph(248) 619-8300 www.valeo.com The new technologies presented today by Valeo confirm the appropriateness of the company’s strategy to develop global solutions which improve safety, comfort and driving pleasure while at the same time reducing fuel consumption and pollutant emissions.

2 StARS Micro-hybrid

3 StARS starter alternator Opportunity to reduce fuel consumption in city driving by up to 15%, without making any radical changes to the engine architecture.

The reduction of fuel consumption, greenhouse gases and pollutant emissions is one of the major challenges that the automotive industry faces today. Automakers are making massive R&D investments in a bid to improve the efficiency of their engines. But progress is only made in small steps. Since, in city driving, vehicles are at a standstill for almost 35% of the time, during which the engine idles needlessly, the benefits of the Stop-Start system are quite obvious. This system switches off the engine when the vehicle stops, at a traffic light, for example, and starts it up again as soon as the driver asks for power. Valeo’s StARS solution (Starter Alternator Reversible System) fully automates this function and can achieve fuel consumption savings of up to 28% in congested city driving.

The StARS solution combines the alternator and starter functions. In starter mode, the engine is started immediately and silently by the belt linking the system to the crankshaft. The alternator mode features a new technology that improves the electrical efficiency of the system. These two decisive advantages make StARS the ideal product to achieve fuel savings and to improve comfort by doing away with the vibrations and noise made by the engine when it stops and restarts.

Thanks to its advanced design, the StARS starter alternator can be adapted to any Stop-Start strategy required by the automaker. The system can also take into account a multitude of parameters related to the engine, clutch, gearbox, brakes or other comfort and safety equipment. It also allows the engine to be restarted when in the process of stopping, if, for example, the driver unexpectedly changes their mind. Conventional starters do not offer this function. StARS can be used with any gasoline engine with a capacity of up to 2.0 liters and Diesel engines up to 1.6 liters, and with all types of gearboxes. By 2009, the system will be available for all gasoline and diesel-fuelled vehicles, irrespective of the engine capacity.

POWERTRAIN EFFICIENCY The engine runs only when the vehicle is moving In 2004, Valeo became the first automotive #FMUESJWFO4UBSUFS"MUFSOBUPSTZTUFN 4U"34 supplier to market a starter alternator. StARS

The unit has a dual function, vehicle was launched in Citroën C3 1.4i 16V, and then alternator and starter motor. This CHARACTERISTICS in Citroën C2. Today’s smart fortwo mhd (micro electronically controlled system t /PGVFMDPOTVNQUJPO OPJTFBOEQPMMVUJPOXIFOBUB TUBOETUJMM DVSSFOUMZNPSFUIBOPGUSBWFMUJNFJOVSCBO reduces both fuel consumption tra c conditions. hybrid drive) also offers the benefits of the StARS and CO2 emissions by t &MFDUSPOJDDPOUSPMPWFSUIFBMUFSOBUPSTSFWFSTFNPUPSNPEF approximately 10% in urban MPXVOJUJOFSUJB BOECFMUESJWFDPNCJOFUPQSPWJEFRVJDLBOE starter alternator. Valeo’s solution reduces its cycles and over 20% in real silent engine starting. tra c conditions. t *OBMUFSOBUPSNPEF UIFTZTUFNJTBIJHIMZFóDJFOUDVSSFOU fuel consumption in busy city driving by 13% to generator. t &BTZUPJOTUBMMoUIFVOJUJTNPVOUFEPODPOWFOUJPOBM 4 l/100 km and emits just 103 grams/kilometer alternator xing points, Both generator and electronic DPOUSPMVOJUBSFBJSDPPMFE t 4ZTUFNJTDPNQBUJCMFXJUIFYJTUJOHWFIJDMFFMFDUSJDBM of CO2 (provisional figures). The ingenious design BSDIJUFDUVSFTBOEPOCPBSEQPXFSOFUXPSLT t *NQSPWFEFóDJFODZoUIFTZTUFNHFOFSBUFT L8PG of Valeo’s StARS starter alternator was rewarded 7DVSSFOU5IFöSTU7CFMUESJWFOTUBSUFSBMUFSOBUPS system is based on a claw unit. with the 2006 PACE Award, the Grand Prix of the EPCOS/SIA Jury and the 2004 Engineering Award, distinctions that underscore the keen interest shown by the automotive industry in this solution.

%VSJOHCSBLJOH UIFFOHJOFDVUTPVU automatically when the vehicle speed slows to MFTTUIBOLQI8IFOUIFCSBLFQFEBMJTSFMFBTFE DPNQMFUFMZ JOBVUPNBUJDUSBOTNJTTJPOWFIJDMFT PSUIFESJWFSFOHBHFTBHFBS JONBOVBM USBOTNJTTJPOWFIJDMFT UIFFOHJOF automatically restarts.

4 StARS starter alternator Operating principle The starter alternator is driven by a belt that can also be used to drive other accessories, such as the air conditioning compressor, the water pump or the power steering. A reversible tensioner allows power to be transmitted in both directions, depending on whether the StARS starter alternator is working as a starter or a generator. The system features a battery based on technology that accepts high numbers of charge/discharge cycles. The battery is also fitted with a sensor that enables the system to inhibit the Stop-Start function if the charge level is too low or to restart the engine if the charge level drops below a critical threshold. Details of the StARS starter alternator The StARS starter alternator is a synchronous machine with a claw rotor. It is air-cooled and uses a three-phase current that is transformed to 12 V DC voltage by a separate electronic transformer.

In starter mode, the electronic transformer delivers three currents with a 120° phase shift in relation to the data from the machine’s three position sensors. It is capable of delivering a 600 A current generating enough torque to drive the internal combustion engine immediately and at higher revs than a conventional starter. The machine can start the engine in less than 0.4 seconds, before immediately switching to alternator mode. In this configuration, the electronic transformer uses MOSFET field effect transistor technology to rectify the three phases. This is one of the reasons behind the outstanding 82% efficiency of the StARS starter alternator, which is a full 10 points higher than the best conventional alternators on the market. The machine delivers a current of up to 180 A.

The benefits of the StARS starter alternator

Advantages for the automaker • The StARS starter alternator significantly reduces fuel consumption and CO2 emissions with minimal investment. • At 2.5 kW at 14 V, the starter power is high. • Electrical efficiency is greater than that of a conventional alternator. • The engine can be restarted when in the process of stopping, if, for example, the driver unexpectedly changes their mind. • Installation on the cylinder block and electrical integration are simple. • The length of the powertrain is not increased, as it is when starter alternators are incorporated in the shaft line.

Advantages for the user • Consumption is reduced by up to 15% in city driving. • CO2 emissions are reduced by up to 15% in city driving. • The engine stops and restarts automatically. • The engine restarts in less than 350 milliseconds and in complete silence. • Engine noise and vibrations are eliminated when the vehicle is at a temporary standstill, which represents 35% of city driving time.

5 Press release

Valeo’s StARS™ starter-alternator now equips the new micro-hybrid smart

Paris, France, 12th July 2007 – Valeo, first on the market in 2004 with its micro-hybrid starter- alternator technology StARS™, announces today that this system will now be standard equipment on the smart fortwo mhd (micro-hybrid drive).

“Valeo is leading the way in developing solutions that meet society’s needs for cars with lower fuel consumption and emissions at reasonable cost. We are delighted that another automaker has recognised the value of the StARS™ system in achieving these objectives: the potential fuel savings offered by this system are up to 28% in congested urban traffic” says Thierry Morin, Valeo Chairman and CEO.

The StARS™ system features the capacity to stop the engine at a red light or in a traffic jam and then restart it immediately and silently when the brake is released. This technology offers significant fuel savings and emission reductions without disrupting the driver’s normal driving habits. On the smart mhd, the Valeo system offers up to 13% fuel economy in urban driving conditions.

The StARS™ system represents a key part of Valeo’s Powertrain Efficiency Domain which aims at enhancing performance and driving pleasure while reducing fuel consumption and pollutant emissions. This Domain covers various aspects of powertrain and vehicle transmission, such as electrical systems, engine cooling and clutch systems, for smoother, more economical transfer of power and torque to the wheels. Valeo solutions in this domain can reduce fuel consumption by up to 40%.

Valeo is an independent industrial group dedicated to the design, production and sale of components, integrated systems and modules for cars and trucks. It is one of the world’s leading automotive suppliers. The Group has 133 production sites, 67 R&D centers, 9 distribution platforms, and employs 72,300 people in 29 countries worldwide.

For all additional information, please contact: Claire Vidal Pilo, Media Relations, Tel: +33 1.40.55.21.26 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 6 Blind Spot Alert System

7 Blind Spot Alert System Road safety enhanced by warning of vehicles present in rear blind spots

Winner of a 2007 PACE award for product innovation, Valeo’s blind spot alert system continuously monitors the rear blind spots on both sides of the vehicle. When a vehicle is present in either blind spot, for example an overtaking vehicle, the driver is alerted to this potential hazard by a visible icon displayed in the door rear view mirror. The system is expected to enhance road safety by reducing collisions with unseen vehicles during lane change maneuvers.

In developing this system, Valeo joined forces with aerospace company Raytheon to combine Valeo’s short-range radar expertise and the in-depth knowledge of radar systems from Raytheon. The outcome of this joint-venture is a radar based blind spot alert system that uses one bumper mounted sensor on each side of the vehicle. These radar sensors continuously monitor the lateral area alongside and to the rear of the vehicle. Their unique design provides a broad field of view with a range of up to 40 meters.

The radar is a multi-beam system operating in a narrow bandwidth around 24GHz. By using several radar beams, the system detects all vehicles present in the blind spots. The system determines their exact position, distance and relative speed with unprecedented accuracy. Blind spot alert sensor technology works in all weather conditions and is easy to install since it fits neatly on the side of the vehicle, behind the rear plastic bumper. This radar technology is an integral part of Valeo’s Driving Assistance Domain that already deploys ultrasonic, infrared and vision sensing technologies toward the goal of achieving total 360-degree surveillance of a vehicle’s immediate environment.

Valeo’s blind spot alert system will debut in the United States on select 2008 Cadillac and Buick vehicles.

DRIVING ASSISTANCE Watch the tra c in your blind spot > Blind Spot Detection system alerts driver to the presence of vehicles in their rearward spots

Bumper mounted radar sensors detect all moving vehicles in the blind spots. The BSD system calculates the position, distance and speed of these vehicles. When a vehicle is a potential danger, a symbol is displayed in the rear view mirror and a warning signal sounds to Oncoming vehicles alert the are recognized but driver. not reported.

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Valeo Raytheon Systems equips two General Motors vehicles with Blind Spot Detection

Paris, France, July 9th, 2007 – Vehicle safety and convenience is making a tremendous leap with the arrival of Blind Spot Detection to General Motors vehicles in the United States. Valeo Raytheon’s Blind Spot Detection system, designed to facilitate lane change maneuvers by providing additional warning of vehicles in the blind spot during lane changes, will be available on select 2008 Cadillac and Buick vehicles. This technology recently received a 2007 PACE Award in the product innovation category.

Increasingly, automakers are recognizing the benefits of active safety systems and offering these technologies on new models. Blind spot detection is an important active driving assistance technology that can help improve drivers’ awareness of their vehicles’ surroundings, and make roads safer. The system operates by calculating the position, distance and direction of travel for vehicles in the adjacent lane of travel. It then alerts the driver of a potential hazard with a visible warning symbol that appears in the side view mirror.

Blind Spot Detection technology is an integral part of Valeo’s Driving Assistance Domain that deploys ultrasonic, infrared and vision-sensing technologies toward the goal of achieving total 360-degree surveillance of a vehicle’s immediate environment.

Valeo is helping to lead the way in developing innovative technologies that will provide drivers and passengers with a whole new driving experience. Valeo’s driving assistance technologies offer solutions for safer vehicles and are intended to monitor the vehicle’s perimeter, inform the driver and other road users about the vehicle’s immediate environment and to initiate appropriate corrective actions.

For all additional information, please contact: Claire Vidal Pilo, Media Relations, Tel: +33 1.40.55.21.26 [email protected] Michele Cox, NA Media Relations, Tel: 248-340-8437 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 9 Press release

Valeo Raytheon Blind Spot Detection System Receives 2007 PACE Award

Paris, France, April 17th 2007 – Valeo Raytheon Systems, a joint venture between Valeo and Raytheon Company, has received the prestigious automotive industry 2007 PACE Award in the product innovation category for its Blind Spot Detection System. The award, co-sponsored by Automotive News, Microsoft, SAP and the Transportation Research Center (TRC), was presented to Valeo at a ceremony held in conjunction with the Society of Automotive Engineers World Congress in Detroit.

“We are honored to receive this prestigious award recognizing that Valeo’s Blind Spot Detection system has made a significant impact in improving vehicle safety,” said Thierry Morin, Valeo Chairman and Chief Executive Officer. “The Blind Spot Detection system is one of our Driving Assistance technologies to provide 360-degree surveillance of the vehicle’s immediate environment.”

“We are excited about the PACE committee’s recognition of our efforts as well as the positive response of the joint venture’s customers around the world,” said Mark E. Russell, Vice President, Raytheon Company.

The system continuously monitors the rear blind spots on both sides of the vehicle. When a vehicle is present in either blind spot, the driver is alerted to this potential hazard by a visible icon displayed in the side view mirror. By using multiple narrow beams of radar to recognize objects in the blind spot, the system allows for unprecedented accuracy in determining the position and distance of the object as well as its relative speed and direction of travel. Blind spot detection sensor technology works in all weather conditions and is invisible. Sensors are located on each side of the vehicle, behind the rear plastic bumper. The system is expected to contribute to reducing collisions with unseen vehicles during lane change maneuvers.

Vehicles equipped with this system will be available in North America and Europe during 2007.

The 2007 PACE Award is Valeo’s third consecutive PACE Award. Valeo also received PACE Awards in 2006 for the StARS micro-hybrid system and in 2005 for the LaneVue™ system.

For all additional information, please contact: Claire Vidal Pilo, Media Relations, Tel: +33 1.40.55.21.26 [email protected] Michele Cox, NA Media Relations, Tel: 248-340-8437 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 10 LaneVue™ Lane Departure Warning System

11 LaneVue™ Lane Departure Warning System Road safety improved by alerting drivers to unintentional lane departures

Recent statistics show that inattention may be a factor in more than 30 percent of accidents in Europe and the United States. Using Iteris technology, Valeo has developed a revolutionary solution to this problem that warns drivers of unintentional lane departure, which can potentially reduce the number of accidents.

Valeo’s LaneVue™ system is based on an advanced technology video processing system that uses complex proprietary software algorithms to continuously monitor the lane markings in front of the vehicle. During unintentional lane departures - detected when the driver fails to use the indicator - the driver is alerted by an audio or a tactile system, such as a vibration in the seat, to take immediate corrective action. High processing speed provides drivers with accurate and timely warnings to ensure the immediate correction of the deviation.

In addition, by warning drivers of a lane departure, the system will also encourage the correct use of direction indicators. The system is expected to contribute to increase driver awareness of the importance of concentration and lane discipline when driving.

Valeo has received several prestigious awards for LaneVue™. These include the Premier Automotive Suppliers Contributions to Excellence, the 2005 PACE Award in the product innovations category, the 2004 Automechanika Innovation Award in the systems modules category, and a 2005 Nissan Global Innovation Award.

Currently, LaneVue™ is equipped on Infiniti FX & Infiniti M models in the United States. The lane departure warning system on Infiniti models represents Valeo’s first vision system. Many more applications for front and rear vision systems are planned in the future.

With LaneVue™, drivers can travel more safely, knowing that as soon as they change lanes without using an indicator, the system will alert them immediately, reducing the risk of an accident. DRIVING ASSISTANCE Improved road safety by alerting drivers to unintentional lane departures 6OJOUFOUJPOBMMBOFEFQBSUVSFXBSOJOHTZTUFN

The LaneVue ™ system constantly monitors the vehicle’s position relative to forward lane markings at speeds above 80 kph.

Miniature video sensor Electronic control unit

*GUIFWFIJDMFDIBOHFTMBOFXJUIPVU the driver activating the direction indicators, the system immediately sounds an alarm.

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13 Park4U™ Semi-Automatic Parking Parking made easy at last

The Park4U™ system parks the vehicle parallel to the curb automatically in a few seconds. After it detects a sufficiently large parking slot, it controls the vehicle’s steering while the driver controls the vehicle’s speed and braking.

The simple process of finding a parking slot is begun by pressing the Park4U™ button. Lateral sensors scan both sides of the street and measure the length of empty parking slots. When sufficient space is detected, that is say, the vehicle length plus 70 centimeters at the front and rear, the driver is informed by an indicator. The driver then continues to drive forward until a “Start Position” message is displayed. The driver then simply puts the vehicle in reverse and releases the steering wheel. The accelerator and brake remain under the control of the driver, who can stop and continue the vehicle’s maneuver at any time. The parking sensors also inform the driver if there are any objects in the vehicle’s trajectory, and the driver is then responsible for deciding whether he or she must stop the vehicle. The end of the parking operation is defined by shifting out of reverse, and if the vehicle is not aligned correctly, the steering wheels are turned towards the curb automatically and the rest of the maneuver is carried out by the driver.

A representative study executed by an independent market research institute has proven that Park4U™ makes parking comfortable for all drivers and is easy to use. At the end more than 2/3 of the participants stated strong or very strong interest in buying the system.

Park4U™ is compatible with either manual DRIVING ASSISTANCE or automatic gearboxes, and is currently Perfect, stress-free parking marketed as “Park Assist” in the Volkswagen 4FNJBVUPNBUJD1BSL"TTJTU4ZTUFN Touran and Cross-Touran and shortly in the

&MFDUSPNFDIBOJDBM Tiguan. &MFDUSPOJD$POUSPM6OJU power steering The driver activates Valeo will launch the second generation of the system by pushing a Park4U™ in 2009. This updated version button. The system measures will be able to park the vehicle in a parking UIFTJ[FPGUIFQBSLJOH slot only one meter longer than the vehicle’s slot and determines whether the ts into it length. Additionally, the updated system will or not. not only guide the vehicle in a single reversing 6MUSBTPOJD sensor movement but will also allow the use of several forward and reverse movements by means of a more sophisticated trajectory calculation. In a future version, the system Once a slot has been found, the driver stops will also be able to steer the vehicle out of and puts the car in its parking place. To do so, it will measure reverse thereby activat ing the automated the position of the different obstacles when steering. starting off and turn the steering wheels.

The system turns the steering wheel when reversing.

The driver keeps the control of accelerating and braking.

14 Park4U™ Semi-Automatic Parking Operating principle

If the vehicle is already fitted with front and rear parking sensors, only two additional sensors need to be added, in the front wings of the vehicle. These are used to detect how much parking space is available. Although identical ultrasonic technology is utilized, their characteristics differ in being optimized for the new task. However they also supplement the four existing front sensors improving the standard park assist function.

While the actual measurement is executed simultaneous on both vehicle sides, the side displayed to the driver is defined by which indicator is activated. The lateral sensor determines the start and end of a parking space by detecting the edges of the surrounding vehicles’ bumpers. If the sidewalk is high enough, it too is detected, and the measurement will determine the maneuver’s required depth. If there is no sidewalk, the control unit calculates a trajectory in which the roadside depth aligns the vehicle with the vehicle parked in front of it.

The trajectory is calculated by the electronic control unit already used by the Park Assist system, which means that no additional control unit is required. Park4U™ only requires steering that can be controlled during the maneuver, effectively demanding electric power assisted steering. The system communicates with the vehicle’s other electronic systems via a high-speed CAN bus.

Several actions can stop the automatic parking process for safety reasons. When searching for a parking slot, the speed must not exceed 30 kph and the distance between the vehicle and parked vehicles must be between 50 and 150 centimeters. When parking, the automatic parking maneuver is interrupted if the speed exceeds 7 kph or the driver overrides the steering. There is also a 3-minute time limit for the parking operation, starting from the beginning of the maneuver. In addition, the system cannot be activated if the vehicle’s Electronic Stability Program (ESP) is deactivated or a trailer is hitched to the vehicle.

Park4U™ Advantages

Advantages for the automaker • Park4U™ deploys mature and reliable standard ultrasonic technology. • Park4U™ relies on affordable components. It requires just two additional sensors, a push-button and an upgrade of the Control Unit if the vehicle is already fitted with a Valeo Park Assist System. • Park4U™ provides a considerable added-value to the vehicle. • ‘50ark4U™ meets significant customer demand for such a system.

Advantages for the user • Park4U™ provides a new standard of simplicity: Easy parallel parking by automatic steering. • Park4U™ leaves the driver in full control of his car at any time. • Park4U™ provides good value for money

15 Press release

Park4U™ unveils its latest developments in the art of parking simplicity at the International Frankfurt Auto Show.

Frankfurt, Germany, September 11, 2007 – Park4U™, The very latest innovation available on the park assist market, will be one of the stars of the International Frankfurt Auto Show 2007. Valeo will devote an area covering 300m2 to “easy parking” and will preview the next generation of the system.

In the space of a few seconds, the vehicle can be parked without the driver even touching the steering wheel—the perfect retort to people who say parking has to be complicated. Drivers can now focus all their attention on the vehicle’s surroundings, which is a significant point when you consider that in Germany one damage claim to car insurers out of three comes from failed parking maneuvers.

This innovative solution has been fitted on the Volkswagen Touran since April 2007, under the name Park Assist. The statistics testify to enthusiastic uptake on the market: Volkswagen estimates that one out of nine Touran is delivered with this feature.

This ultrasonic technology-based driving assistance system, a world premiere, automatically steers the car into the parking slot in a few seconds. Drivers can take their hands off the wheel, but keep their eyes on the road as they control the braking and acceleration of the operation at any time.

The next generation of the system will allow drivers to park in even smaller spaces (only 40cms in front and behind the car) as well as enabling drivers to exit automatically. In the future, with the recent acquisition of Connaught Electronics, Valeo’s parking assistance systems will provide full visibility to the driver of the vehicle’s surroundings and enable increasingly complex parking manoeuvres to be carried out in full comfort.

Following on from the Volkswagen Touran, Park4U™ is also fitted on the Touran Cross, the Tiguan and soon on other vehicles from the automaker. As well as achieving the ongoing confidence of Volkswagen, Valeo has also announced that its products will be fitted on five other makes of vehicle in the coming months. Valeo’s new “standard of simplicity” continues to inspire the market.

For all additional information, please contact: Claire Vidal Pilo, Media Relations, Tel: +33 1.40.55.21.26 [email protected] Michele Cox, NA Media Relations, Tel: 248-340-8437 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 16 Press release

Valeo wins 9 new contracts with the Park4U™ system

Paris, France, 25th July 2007 – Following the successful launch and market success of the VW Touran equipped with the Valeo revolutionary parking assistance system Park4U™, Valeo announces 9 new contracts with 5 European car brands. This ultrasonic technology-based driving assistance system, a world premiere, automatically steers the car into the parking slot in a few seconds. Drivers can take their hands off the wheel, but keep their eyes on the road as they control the braking and acceleration of the operation at any time.

“We are pleased that more and more customers recognize the benefits of our system, which offers intuitive and easy parking for city drivers” says Valeo’s Chairman and CEO, Thierry Morin.

The Park4U™ is a new standard of simplicity for parking, as it provides increased comfort and ease of use. This safe and affordable technology developed by Valeo, world leader on the global ultrasonic park assist market, relies on only two additional ultrasonic sensors compared to the four front and four rear sensors commonly used for parking assistance.

For all additional information, please contact: Claire Vidal Pilo, Product &Technology Communication, Tel: +33 1.40.55.21.26 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 17 Cross Traffic Alert

18 Cross Traffic Alert Road safety enhanced to assist drivers exiting parking spaces

VaIn crowded parking rows across North America, backing out of a blind parking slot is increasingly dangerous and results in fender-bender accidents. Valeo has developed an innovative application that detects approaching vehicles when drivers are in reverse gear.

Using a portion of the scanning beams of the Blind Spot Alert detection sensor, Valeo’s Cross-Traffic Alert system utilizes the powerful Multi-Beam Radar® (MBR®) or Multi-Beam Menopulse™ Radar (MBM™) to scan far down the travel lane between rows of parked cars to detect on coming traffic before backing out. If a vehicle is approaching, the driver receives an alert to indicate it is not safe to proceed.

The CTA application does not monitor directly behind the vehicle, but operates in conjunction with Valeo’s ultra-sonic or camera back-up assist technologies to provide enhanced awareness of the environment when the vehicle is in reverse gear. Vehicles driving away from the exiting vehicle and parked vehicles are detected but do not cause an alert.

Just as with the blind spot alert system, the multi-beam system operates in a narrow bandwidth around 24GHz. The sensors works in all weather conditions and is not visible in the rear bumper, but rather is a single sensor that fits neatly on the side of the vehicle, behind the rear plastic bumper.

This radar technology is an integral part of Valeo’s Driving Assistance Domain designed to help achieve total 360-degree surveillance of a vehicle’s immediate environment.

19 OptiVeo™ Rear System

20 OptiVeo™ Rear System Contributes to providing a 360-degree surveillance of the vehicle’s environment

Camera systems and back-up sensors are available to consumers as an option in an increasing number of new vehicles. Focusing on satisfying consumer needs for a safe driving experience, Valeo has developed OptiVeo™, a rear view camera system that ensures a clear path behind the vehicle when backing up.

The rear view camera system is integrated into the tailgate handle of the vehicle, providing wide-angle images of the zone immediately behind the vehicle. By fusing the rear camera with the rear ultrasonic park assist sensors, this system displays distances to potential obstacles. The system is equipped with an integrated heating and cleaning module and operates under all weather conditions.

OptiVeo™ is part of Valeo’s innovative driving assistance systems that use advanced technologies to continuously monitor the vehicle’s immediate external surroundings and inform the driver of potential hazards. By providing a 360-degree surveillance of the vehicle’s environment, Valeo helps ensure drivers and passengers have a safe traveling experience.

www.valeo.com 21 Comfort Enhancement Technology

22 Comfort Enhancement Technology Introducing Easy4U and Care4U, Valeo’s two new demo cars that showcase the latest innovations in passenger convenience and comfort technologies.

The growing demands of life have consumers in constant search of technologies that will help make everyday life simple and convenient. A recent industry study shows that new-vehicle buyers are increasingly attracted to models offering features that make the driving experience more comfortable and convenient.

Valeo recently introduced two new Mercedes-Benz M-class demonstration vehicles, christened Easy4U and Care4U, that showcase the latest passenger convenience and comfort technology Valeo has to offer. These technologies enhance every step of the driving process from approaching and entering before driving through exiting the vehicle at the final destination. Each technology is linked together and connected to the vehicle’s existing network so, working in tandem, they provide the best possible driving experience for all vehicle occupants.

Easy4U – Convenience at your fingertips The Easy4U demonstration vehicle focuses on aids for using the vehicle, including technologies that offer intuitive seat adjustments, integrated power door closures and fully automatic trunk closure.

Valeo’s Senseative™ is a modern ergonomically-friendly seat adjustment system that allows passengers to conveniently slide a finger across a touch-sensitive surface to adjust the seat, intuitively and accurately. Senseative™ replaces conventional seat buttons and levers allowing automakers to reduce the number of components needed to design and manufacture this watertight, IP54-compliant intuitive seat control system. In addition, the seats have climate-control functionality built into the seat module giving both a heating element and rapid cool-down on hot days. Innovative, ergonomic seat climate controls are integrated into the door panel.

Easy4U also features power closure for doors integrated in the latch, which assists and ensures closure of the doors regardless of joint size or door weight. An automatic trunk closure system uses the park assist ultrasound sensors to detect when passengers walk away from the vehicle and automatically closes the trunk, especially useful when hands are loaded.

www.valeo.com 23 Comfort Enhancement Technology Care4U – Enhanced comfort and security Care4U presents technology for the convenience and security of vehicle passengers. Featuring simple and intuitive interior controls, optimal interior climate and vehicle interaction and communication, Care4U demonstrates a fresh new approach to passenger comfort.

Operating at distances of up to 300 meters, the Smart Key not only provides remote locking/unlocking and keyless start, but it can precondition the vehicle for comfortable driving by remotely activating the HVAC blower and seat heating/cooling, and opening the windows and sunroof for welcome comfort on hot days. The key features a small embedded color screen that displays essential vehicle data including cabin temperature, fuel level, tire pressures, door lock checks. Smart Key, a Valeo signature product, has been designed to offer flexible and innovative styling to accommodate automaker’s custom key designs.

Valeo’s E-media™ system offers a new way of controlling vehicle cabin controls. Using three joysticks activated by touch-sensitive sensors, radio, climate, and navigation can be quickly and easily managed with a low number of menu levels. The user-friendly graphic interface allows users to comfortably and safely control the vehicle’s systems from the center console with logical functioning of controls.

The Thermeo system is an add-on thermo-electric air conditioning system for rear passengers. This low-energy system can be easily integrated anywhere in the cabin and provides practical A/C solutions specific to each individual rear seat.

The secret behind developing innovative comfort enhancements for consumers is listening to their needs. Valeo’s Comfort Enhancement Domain is dedicated to delivering convenience and comfort to drivers, whether entering the vehicle, adjusting the driver’s seat, manipulating temperature or simply while driving. Easy4U and Care4U are examples of how Valeo’s engineers and stylists continually work together to produce fresh and innovative new vehicle features that help position Valeo as a market leader for future comfort enhancement innovations.

www.valeo.com 24 Press release

Valeo presents its two new Comfort Enhancement demo cars at the Frankfurt Motor Show.

Frankfurt, Germany, September 11, 2007 - Christened Easy4U and Care4U, Valeo’s two new demo cars represent the latest stages in the development and promotion of the Group’s three domains. Following on from the V360 – the car that highlighted the key Driving Assistance technologies at the Frankfurt show in 2005 – Easy4U and Care4U, two Mercedes ML models, showcase all the innovations in the Comfort Enhancement Domain. They present comfort technologies adapted to each stage of the use of the vehicle: - approaching the car, entering, adjusting the driver’s seat and controls - driving - getting out of the car

Easy4U focuses on aids for using the vehicle. It is equipped with technologies that offer the intuitive adjustment of seat positions, power door closure systems and fully automatic trunk closure. With Easy4U, the vehicle demands less physical effort on the part of the user. Technologies integrated in the Easy4U car are: - Senseative™, a seat adjustment system based on sensitive force sensor technology. Users simply slide a finger across the touch-sensitive surface to adjust their seat, intuitively and accurately. - Power closure for doors integrated in the latch to assist and ensure closure, however thick the joints and weight of the door. - Automatic trunk closure system which uses the park assist ultrasound sensors to detect when you walk away from the vehicle and automatically closes the trunk.

Care4U is dedicated to wellbeing and comfort technologies inside the vehicle. It includes permanent interaction and communication with the vehicle, simple and intuitive interior controls, and optimal thermal comfort while driving the vehicle. Care4U is equipped with the following technologies: - the Smart Key, which operates at distances of up to 300 meters, displays vehicle data on its color screen (cabin temperature, fuel level, tire pressure, door lock checks) and allows the driver to remotely activate the air conditioning. This key, a Valeo signature product, has been designed to offer flexible, innovative styling, different for each vehicle. - The Thermeo system, a thermo-electric air conditioning system that provides practical, attractive A/C solutions specific to each individual seat in the rear. - The E-media™ system, a central console comprising a black panel and three joysticks that are automatically activated using their touch-sensitive sensors. They offer easy adjustment of the air conditioning, navigation controls, radio and telephone features. Graphic representations of control positions and movements are displayed on-screen, and the number of menu levels has been limited to facilitate the cognitive representation and logical functioning of controls.

In just 12 months of development, engineers from Valeo and its partners succeeded in getting all these new technologies to communicate with the other vehicle functionalities. This technological challenge involved fitting new components in the original CAN networks as well as adding two CAN networks and one MOST network. www.valeo.com 25 Press release

In order to reflect the spirit of the vehicle in the design, Valeo also carried out a detailed styling review. Ergonomic engineers and stylists worked together in-house to produce a fresh new high-quality architecture, form and finish. The result is a harmonious, integrated design, making it difficult to guess which features have been added to the original system.

In designing its two Easy4U and Care4U vehicles, Valeo wanted to offer an example of the ergonomic and esthetic integration of its technologies in a vehicle, while ensuring that many other options are available to meet the needs of its automaker customers. By demonstrating its technological expertise by fitting these systems and getting them all to communicate with each other as well as with the vehicle’s original network, Valeo has positioned itself as a market leader for future Comfort Enhancement innovations.

The Easy4U and Care4U vehicles are presented in an exclusive area outside the main Valeo stand, with access limited to invited guests.

For all additional information, please contact: Claire Vidal Pilo, Media Relations, Tel: +33 1.40.55.21.26 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 26 Press release

Green By Nature: Valeo Showcases Eco-Friendly Technology at the Frankfurt Auto Show

Frankfurt, Germany, September 11, 2007 – Valeo has chosen the occasion of the Frankfurt Auto Show, one of the world’s premier automotive industry gatherings, to demonstrate that Valeo is indeed Green by Nature. Valeo has long been dedicated to protecting the environment through eco-friendly products and systems as well as cleaner factories and manufacturing processes. As a signatory to the United Nations Global Compact, Valeo is committed to preserving the planet and enabling a better automotive world for current and future generations.

Dramatic population growth and an increasing desire for individual liberty have brought to the forefront the challenge of reconciling the huge demand for vehicles and the need to reduce their impact on the environment. For the automotive industry this challenge translates into the need for technological and manufacturing innovations specifically designed to protect the environment. Reduced fuel consumption and pollutant emissions constitute the major challenges facing our industry. Developing the necessary solutions is invigorating and stimulating, but it calls for significant investment. Furthermore, such technologies must be developed, tested and implemented while keeping costs as low as possible. Valeo is successfully meeting these challenges and will continue to do so in the future.

The Green by nature innovations displayed on the Valeo booth, are:

E-Valve: Electromagnetic Valve Actuation – 15-20% reduction in CO2 emissions Valeo E-Valve technology is based on a variable valve actuation system that replaces the conventional mechanical system for major fuel economy, improved engine performance and easier driving.

StARS Micro-Hybrid – 6-15% reduction in CO2 emissions The StARS System features the capacity to stop and then restart the engine immediately and silently. StARS saves fuel and reduces emissions significantly when the vehicle is stopped at red lights and in traffic jams without disrupting the motorist’s normal driving habits. This system was first launched on the Citroën C3 and this year will be launched on the smart fortwo mhd (micro hybrid drive).

Double Dry Clutch – 4-6% reduction in CO2 emissions An alternative to hydraulic automatic transmissions, the Double Dry Clutch transmission features one clutch for even gears and one clutch for odd gears. This provides the comfort of an automatic transmission and the fuel efficiency of a manual transmission.

THEMIS™ Valve – up to 4% reduction in CO2 emissions The THEMIS™ Valve offers full coolant flow management throughout the engine, radiator and heater and is integrated into the engine coolant outlet. Fuel economy, reduced emissions, faster engine warm-up and improved HVAC performance are among the numerous benefits of the THEMIS™ Valve.

Cooled Exhaust Gas Recirculation system – 5-7% reduction in CO2 emissions The primary function of Cooled EGR Systems has been to reduce the formation of nitrogen oxides in diesel engines. Recently, Cooled EGR has been applied to gasoline engines to improve fuel economy by allowing higher compression ratios.

27 Press release

UltimateCooling™ – 3-5% reduction in CO2 emissions UltimateCooling™ is a new cooling system to optimize thermal energy management by running all fluids through one coolant loop. As well as offering significant fuel economy, the UlimateCooling™ System also enhances vehicle design by reducing front-end overhang (20% to 40% reduction over conventional systems).

High efficiency A/C systems – 3 % reduction in CO2 emissions Valeo introduces a new smart R134a air conditioning loop. Innovative and lighter components, combined with a computer-added A/C control algorithm, allow the system to operate always close to the efficiency optimum. This leads to lower power consumption and a significant fuel economy.

Green products and systems are only a part of the solution. Green manufacturing facilities and processes are equally crucial. Valeo’s “generic factory” concept ensures that environmental factors are given top priority at all manufacturing sites—from design blueprints through to operations—all around the world. Reduced electricity and water consumption, minimum waste, increased recycling rates, employee safety and a global awareness of the way Valeo can impact nature: the employee education programs are designed to help every individual find eco- friendly solutions.

In striving to bring customers products and systems that enable them to build ever cleaner automobiles, Valeo’s goal is two-fold: to protect the planet and to provide its customers with real added-value products to differentiate their vehicles through enhanced comfort and environmental protection at the best possible cost.

For all additional information, please contact: Claire Vidal Pilo, Media Relations, Tel: +33 1.40.55.21.26 [email protected] Sylvie Delion, Media Relations, Tel: +33 1.40.55.20.96 [email protected]

For more information about the Group and its activities, please visit our web site www.valeo.com

www.valeo.com 28 September 2007 #1

P.4 Innovation is the Answer Innovative technologies to protect the environment and meet the world’s growing need for mobility.

P.6 High-Performance Innovations Eco-friendly systems to enhance fuel-efficiency by up to 40%: Valeo designs products for the cars and trucks of tomorrow.

P.2 P.3 P.10 Green by Nature A Global Long-Term

29 Challenge Commitment Green by Nature

Valeo has long been dedicated to protecting the environment through eco-friendly products and systems as well as cleaner factories and manufacturing processes.

e have chosen the occasion Green products and systems are only of the Frankfurt Auto Show, one a part of the solution. Green manufacturing Wof the world’s premier automotive facilities and processes are equally crucial. industry gatherings, to demonstrate that Valeo’s “generic factory” concept ensures Valeo is indeed Green by Nature. Valeo has that environmental factors are given top long been dedicated to protecting the priority at all manufacturing sites—from environment through eco-friendly products design blueprints through to operations and systems as well as cleaner factories —all around the world. Reduced electricity and manufacturing processes. and water consumption, minimum waste, With significant investment in green increased recycling rates, employees safety technology over the past 15 years and as and a global awareness of the way we signatories to the United Nations Global impact nature: our employees education Compact (see below), we are committed programs are designed to help every to preserving our planet and enabling individual find eco-friendly solutions. a better automotive world for current and future generations. In striving to bring our customers products and systems that enable them to build ever Dramatic population growth and cleaner automobiles, our goal is two-fold: an increasing desire for individual liberty to protect our planet and to provide our have brought to the forefront the challenge customers with real added-value products 2 of reconciling the huge demand for vehicles to differentiate their vehicles through and the need to reduce their impact on the enhanced comfort and environmental environment. For the automotive industry protection at the best possible cost. this challenge translates into the need for At Valeo, Green by Nature is our philosophy, technological and manufacturing innovations our way of work and our way of life. specifically designed to protect the environment. Reduced fuel consumption and pollutant emissions constitute the major challenges facing our industry. Thierry Morin Developing the necessary solutions is Chairman and CEO, Valeo invigorating and stimulating, but calls for significant investment. Furthermore, such technologies must be developed, tested and implemented while keeping costs as Valeo’s International Pledge: low as possible. Valeo is successfully meeting these challenges and will continue The United Nations Global Compact to do so in the future. Among our latest innovations, which you will discover at this In 2003, Valeo signed the United Nations Global Compact, a program that asks companies to embrace, support and enact, within their sphere of influence, a set of ten principles show, are the fuel-saving StARS micro- in the areas of human rights, labor standards, the environment, and anti-corruption. hybrid system and the e-Valve system In the arena of environmental policy businesses commit to three principles: for cleaner, more efficient gasoline engines. Support a precautionary approach Encourage the development and diffusion to environmental challenges of environmentally friendly technologies Companies take into account the environmental Companies move toward environmentally impact of all activities as well as plan and sound technologies and devote resources implement operations to minimize their effects to the development of green products on nature. In short, this principle involves and practices. striving to eliminate environmental problems before they happen. With manufacturing sites in over 25 countries, Valeo sees this initiative as crucial to a cleaner, Undertake initiatives to promote greater safer world. In the words of Chairman & CEO environmental responsibility Thierry Morin, “We know that the long-term success of Valeo depends on the fundamental Businesses do more than comply with existing principles outlined in this compact.” regulations. They commit to a proactive approach to more efficient resource use, cleaner production methods and to taking into account the environmental impact of products 30 throughout their entire life cycle. ustainable development and economic being developed such as hybrid engines development are a difficult mix to that run on both gasoline (or diesel) fuel Sachieve, as are economically priced, and electricity. Alternatives are biofuels, fuel-efficient cars that remain enjoyable LPG natural gas or fully electric engines. to drive. Yet progress is being made, and The other main area of research is to Valeo is at the forefront. Taken together, reduce energy and pollutant emissions. Valeo’s innovations can achieve up to 40% Valeo has made a clear choice to be fuel savings with the associated reduction proactive in the fight to reduce emissions in emissions. and has heavily invested in R&D in its For all industries, notably the car industry, Powertrain Efficiency Domain. Systems such the words Kyoto Protocol symbolize just as StARS, which shuts off the engine when such efforts to preserve the environment. the car comes to a halt, reduces fuel The international agreement to limit consumption by up to 28% when driving in greenhouse gas emissions is the greatest congested urban areas while at the same hope for preventing catastrophic global time decreasing noise pollution. Valeo’s warming. Developed countries are required e-Valve system replaces the camshaft with to reduce their emissions by 5.2% below electromagnetic actuators for up to 15% Today there are 630 millions cars in use around the world. their 1990 baseline over the period from to 20% fuel reduction and more enjoyable By 2030, this figure will probably have doubled. 2008 to 2012. One quarter of these emissions driving due to improved low-end torque. Source: Renault-Guidelines A Global Meeting the demand for increased individual freedom and transport while reducing the Challenge impact of cars and trucks on the environment is the key challenge facing every player in the automobile industry. are generated by the transport sector, so In addition, technologies for bio-fueled automakers and their suppliers are strongly vehicles, improved thermal systems committed to this goal. and improved energy transfer systems 3 are innovations Valeo is bringing to today’s The clean car - one objective, environmentally-conscious society. several solutions By far the most threatening greenhouse gas, C02 is not harmful in itself but is largely responsible for global warming. Other pollutants emitted by hydrocarbon- fueled vehicles are harmful in and of themselves and must be reduced as well. One set of solutions involves finding alternative fuels: a variety of solutions are

Global warming A closer look at CO2

1C+2O = CO2 (carbon dioxide) 25% increase in CO2 emissions CO2 is a chemical compound made up of one carbon and two from transport in the European Union since 1990, oxygen atoms. Although not harmful in itself, CO2 is considered with the greatest increase coming from the transport of goods. the main source of global warming. 120 grams per km: the regulatory objective 30% increase in CO2 concentration the European Commission will set for automakers for 2012. in the atmosphere since the beginning of the industrial age. In 2005 cars were still emitting 162 grams per km. Regulations In 100 years the amount of CO2 has increased from 278 ppmv are set to tighten even further in 2020: 95 grams per km. (parts per million in volume) to reach 382 ppmv 2007.

CO2 data: • 2007 report by the European Environment Agency. 31 • Fourth Assessment Report by the Intergovernmental Panel on Climate Change (IPCC) published by UNESCO in Paris on March 3, 2007. Martin Haub is Valeo’s Vice-President for R&D and Product Marketing. In the following interview he talks about his company’s innovation strategy as the response to the increasing need for protecting the environment while continuing to supply affordable systems that enhance comfort and keep driving enjoyable. Innovation Is the Answer

How does Valeo understand and anticipate Another Domain, Powertrain Efficiency auto industry needs in order to innovate is dedicated to reconciling mobility with effectively? respect for the environment—cars that are both fuel-efficient and a pleasure to drive. In 2001 we created a new network This area takes in the two major issues of dedicated to product marketing, which lower emissions and lower fuel consumption. includes brand profiling end-consumer Valeo is among world leaders in this area, research. We use this knowledge to guide with a variety of thermal management, our priorities in product development. exhaust gas re-circulation and micro-hybrid We are able to understand market starter-alternator solutions already on the expectations thanks to these studies, market, including the StARS system. One of and our R&D is driven and structured by our most notable and advanced solutions in real consumer needs. Based on our findings Powertrain Efficiency is the e-Valve system, Martin Haub and our portfolio of products, we built the which uses electromagnetic actuator Vice-President for R&D Group’s innovation strategy around three technology in place of a traditional camshaft. and Product Marketing, Valeo Domains: Driving Assistance, Powertrain 4 This system further reduces consumption Efficiency and Comfort Enhancement. and emissions by 15% to 20% while improving low-end torque. Could you outline each of those three domains? Our Driving Assistance Domain develops safety systems that monitor the vehicle’s immediate environment to inform and alert drivers and other road users of potential LOwCO2MOTION™ hazards. This includes a full range of radar, LOwCO2MOTION™ is the name for Valeo’s large-scale ultrasonic and camera-based systems to research program with a two-fold objective: reduced fuel provide 360° vision by day or night. Blind consumption, and reduced emissions, particularly carbon spot detection, lane departure warning, dioxide emissions, the major culprit in global warming. dynamic bending light and night vision A number of the company’s research programs have are just few of the featured functions. impressed EU and French government bodies sufficiently Equally important for safety and comfort are to win major grants and LOwCO2MOTION™ is no exception. our parking assistance functions, including In March, the Agency for Industrial Innovation, an arm the new Park4U™ parallel park assist sys- of the French Ministry of the Economy, awarded funding tem. of 61 million euros to this program.

LOwCO2MOTION™ is centered on two major innovations: The e-Valve System The e-Valve System replaces the camshaft with a series of electromagnetic actuators that command each valve individually. Not only does the e-Valve System reduce consumption and emissions by 15 - 20%, it also enhances engine performance and driver comfort. Public Trust in Valeo New-Generation Micro-Mild Hybrid Such significant financing by public agencies indicates the faith Perfectly compatible with the e-Valve System, Valeo’s new- in the company’s capacity to develop systems essential generation micro-mild hybrid is based on the firm’s StARS+X to preserving the environment. As Chairman & CEO Thierry Morin said, technology. In addition to the Stop-Start function, the new system “This funding, which attests to the value of the research conducted recovers and reuses the energy generated by braking. High- by Valeo’s engineers over the past several years, will allow us to bring performance, high-efficiency alternator technology and ultra to market innovative solutions that can reduce fuel consumption by as much capacitors come together to reduce fuel consumption by up to 15%. 32 as 40% as well significantly reduce emissions of other pollutants.” Comfort Enhancement is the Domain that How does Valeo’s steer its innovation develops systems to increase driver and process? passenger comfort and well-being. Comfort We have a clearly structured process Enhancement, notably, involves systems for innovation that we call the TDP, that filter and purify cabin air. Vehicle Technology Development Plan, and access and security, as well as ergonomic we update it every year. The TDP is like Human Machine Interfaces (HMI) are other a roadmap that covers where the market key areas covered by this Domain, with is going, where we want to move in the solutions including smart hands-free keyless market, the regulations we expect, and entry and remote-controlled power closure which technologies are coming together. systems, supervised by safety oriented For example, we try to discern the overall sensor systems. trends in powertrains and what we have to do to be ready to meet those needs. What do automakers expect from their Then we break down market trends into suppliers in terms of systems designed components and subsystems and work on to protect the environment? those. As our developments mature, we Their main expectation is that we continue install them on our demonstration vehicles to invent and produce systems that will and through dedicated Ride & Drive events allow them to build vehicles that meet ever held with our customers we continually test more stringent environmental regulations ideas with them. at an affordable cost. As laws become more Valeo was the first automotive supplier stringent, costs rise, so our R&D is focused to be admitted into the Sigma Sensor club, 5 on creating systems that reduce fuel a group that studies brands, the wants, consumption and emissions as economically needs and aspirations of different segments as possible while preserving driver comfort of society. We use this knowledge to guide and pleasure. In addition, and this does not our priorities in product development. apply only to eco-friendly systems, it is You always have more ideas than you’re important to develop easily standardized able to explore, so this helps us decide products that can be integrated which ones are worth pursuing. …our R&D is focused on creating into the manufacturing process systems that reduce fuel consumption in factories around the world. Since smaller engines are and emissions […] while preserving greener, we also work on driver comfort and pleasure. systems that compensate for power loss when an engine is downsized. Ease of installation and lowest possible weight - without giving up any benefits - are key as well.

VALEO KEY R&D FIGURES 68 7,000 562 6.6% research centers people employed in R&D patents registered of total sales revenues around the world in 2006 invested in R&D

33 High-Performance Innovations

Supplying the car industry with high-performance eco-friendly innovations that reduce fuel consumption, lower emissions and enhance the enjoyment of driving is Valeo’s number one priority. From improved powertrain efficiency to better thermal management to greater motorist well-being, Valeo systems offer cutting-edge technology to protect the environment while meeting the ever-growing demand for increased mobility.

Achieving 40% fuel savings Six possible areas for improvement by Valeo

High Efficiency Power on demand A/C systems -3%

UltimateCooling™ -3 to -5% up to -40% Thermal Management fuel savings ! THEMIS™ -4%

Transmission Double Clutch Automation transmission -4 to -6%

Air Systems Cooled EGR system -5 to -7%

Hybridization Micro-Hybrid (from Stop-Start to Regenerative braking) -6 to -15%

Engine E-Valve System 34 Operation -15 to -20% Ultimate Cooled Exhaust Cooling™ E-Valve Gas Recirculation 3-5% reduction Electromagnetic High efficiency system in CO2 emissions Valve Actuation A/C systems 5-7% reduction UltimateCooling™ is a new cooling in CO2 emissions system to optimize thermal energy 15-20% reduction 3% reduction management by running all fluids The primary function of Cooled EGR through one coolant loop. As well in CO2 emissions in CO2 emissions Systems has been to reduce the formation as offering significant fuel Valeo’s e-Valve technology is an Valeo introduces a new smart of nitrogen oxides in diesel engines. economy, the UltimateCooling™ electromagnetic valve actuation R134a air conditioning loop. Recently, Cooled EGR has been applied to System also enhances vehicle system that replaces the conventional Innovative and lighter components, gasoline engines to improve fuel economy design by reducing front-end mechanical system for major fuel combined with an A/C control by allowing higher compression ratios. overhang (20% to 40% reduction economy, improved engine algorithm maintain the operating over conventional systems). performance and easier driving. point close to the optimum efficiency. This leads to lower power consumption and improved fuel economy.

StARS Micro-Hybrid Double Dry Clutch 6-15% reduction up to 4-6% reduction in CO2 emissions in CO2 emissions THEMIS™ Valve An alternative to hydraulic automatic The StARS System features the capacity transmissions, the Double Dry Clutch to stop and then restart the engine transmission features one clutch for even immediately and silently. StARS saves up to 4% reduction gears and one clutch for odd gears. This fuel and reduces emissions significantly in CO2 emissions provides the comfort of an automatic when the vehicle is stopped at red The THEMIS™ Valve offers full coolant flow transmission and the fuel efficiency of a lights and in traffic jams without management throughout the engine, manual transmission. disrupting the motorist’s normal radiator and heater and is integrated into driving habits. Regenerative braking the engine coolant outlet. is a complementary function of StARS Fuel economy, reduced emissions, faster and allows up to 15% fuel economy. engine warm-up and improved HVAC performance are among the numerous benefits of the THEMIS™ Valve. 35 A Close-Up on Three of Valeo’s High Performance

Valeo's e-Valve system, StARS system and UltimateCooling™ represent three different Products ways in which the Group is helping conserve energy, win the war against emissions and enhance driver comfort.

StARS: Valeo Puts the Brake on Fuel Consumption, Pollution and Noise

The technology behind Valeo’s StARS system is advanced, but the idea is simple: when the car comes to a full stop the engine cuts off immediately and re-starts when the driver releases the brake or, in manual transmission vehicles, as soon as a gear is engaged. The result: lower fuel consumption, reduced noise and air pollution and easier driving.

With Valeo’s new innovation, red lights, stop significantly outperforms the conventional signs and traffic jams are no longer the separate starter and alternator system. In gas-guzzlers they once were. StARS cuts off starter mode, the belt drive and low inertia the engine immediately when the car halts of the machine means that the vehicle and starts up again instantly and silently starts silently and three times more quickly when the brake is released. On city streets than with a traditional starter. In alternator or in congested areas, vehicles are generally mode, the machine outputs up to 180 amps at a standstill for nearly 35% of travel time. of electricity at a rate of 85%, over 15% StARS can reduce fuel consumption in urban more than a conventional alternator. Valeo’s driving by as much as 15%. Stop-Start unobtrusive starter-alternator is easy to electronics also improves alternator efficiency install on any vehicle powered by gasoline 8 which further lowers fuel consumption and or diesel. Not only can the unit be installed reduces emissions. StARS technology will in place of the conventional alternator now be standard equipment on the smart using the same fittings, it also frees up the fortwo mhd (micro-hybrid drive). On this space traditionally taken up by the starter particular model Valeo can provide up and makes the vehicle proportionately to 13% fuel economy in urban driving. lighter. The smart fortwo mhd is equipped with Valeo StARS, the must-have Stop-Start technology for city drivers. Innovative Technology, Easy Integration Valeo has combined the functions of an alternator and a starter in a single 14-volt unit that runs on a standard battery. Thanks to specially designed electronics and software Valeo's starter-alternator

Newsflash: Valeo’s Mercury-Free Headlamp Valeo is one of the only companies able to supply more environmentally friendly headlamps using mercury-free bulbs without altering light efficiency. The Group has provided this solution to Audi and Toyota. The new Toyota Auris headlamp and Audi A5 headlamp are on display at the Valeo IAA booth.

Paris City Buses Reach for the StARS From April to July 2007 the public transport an associated system that recovers energy authority for the Paris metropolitan area, the generated by braking for an overall reduction RATP, operated an experimental line of Gruau in fuel consumption of 15%. Valeo, Gruau and micro-bus equipped with Valeo’s StARS the RATP designed this trial specifically technology, especially effective when driving in order to demonstrate the efficiency of the in congested urban areas. Along with Stop- Stop-Start and regenerative braking systems. Start36 , the Gruau bus was also equipped with The e-Valve System: Less is More in New Technology for Fuel-Efficient Engines

Valeo’s System uses e-Valve technology to replace the traditional mechanical camshaft system. The resulting increase in efficiency lowers fuel consumption by 15% to 20% and reduces harmful emissions while enhancing engine performance for driving comfort.

With Valeo’s e-Valve System, the opening Benefits for Automakers and Consumers and closing of valves is controlled by an The result is a system that provides just as electromagnetic system that operates each much or just as little energy as the vehicle valve individually and independently of needs at a given moment, It is now the crankshaft position. This total flexibility possible to design engines that optimize is similar to that available with very engine performance with respect to the sophisticated variable valve actuation systems, demands of the driver, applying different allowing engine calibration engineers almost engine strategies such as cylinder infinitely variable valve timing and valve deactivation or Atkinson-Miller cycle based opening duration. The e-Valve System also on actual driving inputs. This all contributes offers other advantages such as cylinder to impressive fuel savings and reduced deactivation, offering additional fuel emissions. By controlling residual gases, consumption benefits for the internal minimizing pumping losses and deactivating combustion engine. cylinders and valves, e-Valve technology is not only environmentally friendly but also The e-Valve System replaces the camshaft with electromagnetic valve actuators. enhances driving comfort due to increased low-end engine torque.

Roadworthy Technology

E-Valve technology has proven itself vehicles on the market. The e-Valve car in the lab and on the road. In the opinion has been driven over 15,000 kilometers Valeo demonstration vehicles available for of the numerous automakers who have and tested by 1,000 people, and e-Valve testing during customer and press events. tested it, the Valeo e-Valve demo car is actuators have proven their durability over one of the most advanced demonstration 250,000 kilometers in test engines.

9 UltimateCooling™: Taking the Heat

Valeo’s UltimateCooling™ is a comprehensive system based on a new powertrain architecture designed to manage heat energy transfer between components and optimize heat dissipation to the atmosphere. UltimateCooling™ works by thermal management of all fluids through one cooling loop. The new system also contributes to achieving European standards regarding pedestrian safety by reducing front-end bulk by 20-40%.

Wide-Ranging Benefits Cooling Systems The wide-ranging benefits of UltimateCooling™ The Water-Cooled Charge Air Cooler, an air-to-water include fuel economy and emissions reduction, heat exchanger, is the first step towards a complete improved engine output, a compact front-end to UltimateCooling™ system. Air is cooled on intake meet new pedestrian safety regulations, improved by a cold-water exchanger, so the air-charging temperature comfort for driver and passengers, system benefits from more efficient cooling while reduced repair costs and better design flexibility. a shorter air circulation path makes for easier acceleration and increased driving pleasure.

UltimateCooling™, a new powertrain architecture that offers 3% up to 5% CO2 emissions reduction.

The first car to feature Valeo’s Water-Cooled Charge spokesman had these words of praise for the Water- Volkswagen takes first step Air Cooler is the Volkswagen Golf 1.4L TSI. Valeo’s new Cooled Charge Air Cooler, “This new water-cooled technology reduces CO2 emissions, reduces fuel air cooling system allowed us to significantly towards UltimateCooling™ consumption by 2% and frees space in the vehicle’s enhance fuel-efficiency and reduce underhood with the Golf 1.4 TSI front end. At last April’s Internationales packaging” (Volkswagen Spokesman, Internationales Motorensymposium in Vienna, a Volkswagen Motorensymposium, Vienna 2007). 37 Valeo has long been committed to protecting the environment. The Group’s sustainable development policy is centered on green factories, eliminating toxic substances, constantly upgrading the environmental performance of products and processes and voluntary compliance with stringent international standards. A Long-Term Commitment Valeo sees sustainable development as environmental experts and local executives meshing long-term and short-term in order to implement green policies. priorities. For over 15 years the Group has A key reason for the success of Valeo’s been striving to protect the environment eco-friendly initiatives over such a wide through an ecologically aware corporate range of cultures and countries is the culture and green operating. Every site Group’s in-depth efforts to promote and must comply with local regulations, maintain a strong corporate culture that recognized industrial standards and puts a priority on protecting the Valeo’s own internal norms, which environment. Employees in all capacities are the most stringent of all. receive awareness training that allows them to find solutions and make decisions Constant Vigilance that save resources and keep operations The Group’s environmental management as clean as possible. system covers the entirety of its manufacturing sites around the world Eco-Design: Limiting Environmental Impact and all Valeo plants are or will soon Starting with the design and development be certified ISO 14001. Certification is phase, Valeo engineers and experts take reviewed every three years, so the Group into account the environmental 10 is constantly “growing greener” with, consequences of manufacturing each for example, increasing rates of waste product, the impact of the product itself recycling and re-use as well as reduced and its end-of-life impact. To add to this energy usage. One of the Group’s notable challenge, products must become greener accomplishments has been a 40% decrease without sacrificing quality and while in overall water consumption over the continuing to meet customer requirements. Auburn Hills technical center (Michigan, USA) past three years. Valeo constantly monitors Teams of engineers and experts stay Valeo Thermal Systems activity. environmental practices and publishes abreast of the latest findings and progress reports every year concerning regulations to edit and update roadmaps areas such as energy consumption, heavy and steer product development at all sites metals use, packing materials, emissions, with the Valeo Eco-Design Guidebook. industrial waste and waste generation & recycling/re-use.

A Corporate Environmental Culture That Leads to Effective Action Ensuring that all sites comply with regulations and that all new factories are built according to Valeo’s “generic factory” plan entails both global vision and local awareness (see adjacent article). Different topography, different climates and different resource availability requires close Worldwide Best cooperation between headquarter’s Practices: Valeo’s Generic Factory

“Generic Factory” is the name for Valeo’s mental protection, employee safety, international standards for the design energy savings, water and resource use, and operation of its manufacturing sites. and recycling. For Valeo, globalization This high-level internal compliance solution means applying the principles of good, ensures that Valeo factories around the green corporate citizenship in every corner 38 world meet rigorous criteria for environ- of the globe. 39 Future A Greener +50% of environmental training: Tot al numberofhours 24,915 hours 2001 37,386 hours 2006 - 19.7% CO2 atmosphericemissions: - 33.5% Use ofrecycled plastic: upgr de file spe V aleo auditsen 154,401 2001 tons signed t s de ak f ade itsec 9,249 2001 tons 123,971 2006 tons or themselv tailed r 6,150 2006 tons o decr o - friend vir eports onawiderange o e onmen ase theGr e s : V ly policie aleo isGr tal perf (m Wat + 11percentage points Was Dis V Pho Pr (English, F Journalis Chie Tr b Gr 3 aleo/cons y theGr ansla oduc een b thousands) er consumption:-36.5% oup tribution: te re-use rate: t s andpr f E o cr dit ed andde tion: y Na edits t: oup V een ByNa ormanc or r ’ ench andGerman). s impactonna truct Alfr : tur Tr Clair 10 : anslan aleo C ed Gannon. Jaime OcampoRangel,Ge or pho e, f ,000 c e VidalPilo signed b actual maga actic ommunica tic C t opie o libr e ommunications. 5,455 s in3language y: 2001 arie 2001 61% e . tur s. Thenumbers tion Departmen zine published s. v ery y f oper 3,463 e! 2006 2006 72%

picotto t ty Image s tur e t. ar and a e and s, tions 11 40 at a glance

Valeo strives to be a benchmark in the automotive industry in terms of operational excellence, total quality, global presence and technology.

More than ever before, Valeo is committed to enabling a better automotive world.

Thierry Morin, Chairman and CEO

41 Fully focused on the design, production, and sale of components, systems, and modules for automobiles and trucks, both on the original equipment market and the aftermarket, Valeo is an independent and international industrial group. It is one of the world’s leading automotive suppliers.

Valeo applies its profitable growth strategy in line with a policy of sustainable development.

42 KEY FIGURES

10 billion euros sales in 2006

* In accordance with IFRS norms, all 2004 and 2005 figures are restated, mainly to account for non-strategic activities.

43 44 Operational excellence The 5 Axes methodology is deployed in all the Group’s sites worldwide.

The 5 Axes methodology is the Group’s standard for obtaining operational excellence and total quality at the best possible cost. Methods, manufacturing, projects and purchasing are systematically optimized.

The 5 Axes - Involvement of Personnel, Production System, Constant Innovation, Supplier Integration, and Total Quality - have formed the cornerstone of Valeo’s culture for the last 15 years, with the ultimate objective of achieving customer satisfaction. Valeo uses a full range of tools to enhance operational excellence, such as “pull-flow” or Kosu, which assesses the resources required to manufacture a particular part. Valeo’s purchasing department is permanently optimizing its costs through a strategy of selecting and integrating suppliers, and putting all its tools at their disposal.

45 TOTAL QUALITY Quality is a founding principle. It relies on method but first and foremost on a state of mind.

Total Quality is an obsession for Valeo’s 70,000 employees. It requires the involvement of everyone at all times and in all circumstances.

San Gen Shugi is a common-sense, logical approach to problem solving based on a concrete analysis of what really happens on the production line: Gen-ba (where and when a problem arises), Gen butsu (analyzing actual parts), Gen-jitsu (using measurable facts).

QRQC (Quick Response Quality Control) is used to detect and analyze any problem and deploy immediate corrective actions.This approach applies to all domains: production, quality, purchasing, logistics, safety and projects.

* In the automotive industry, non- quality of products is expressed in ppm (the number of defective parts per million produced).

46 Global presence Valeo works with automakers in all countries where they wish to operate.

47 Technology Innovation is at the heart of Valeo’s strategy for safer, more comfortable and greener vehicles.

Valeo’s objective is to offer global solutions which enhance comfort, safety and driving pleasure, and reduce fuel consumption and emissions. Its approach is based on three Domains.

Driving Assistance: solutions for monitoring the vehicle perimeter, providing the driver and other road users with information about the vehicle’s immediate environment and initiating the appropriate corrective actions.

Powertrain Efficiency: solutions to make vehicles more efficient, more economical, by reducing fuel consumption, and cleaner, by minimizing pollutant emissions.

Comfort Enhancement: solutions to make vehicles more comfortable. This Domain’s purpose is to make vehicles more userfriendly and improve the comfort and well being of their occupants in all stages of use: approaching, accessing, starting, driving and getting out of the vehicle.

The Park4U™ system takes control of the steering wheel during

parking maneuvers and allows the driver to park the car in less

than 15 seconds thanks to ultrasonic sensors on the front and

rear of the vehicle. Valeo equips the VW Touran with this system.

48 Media Contact: Michele Cox Marketing and Communications Manager (248) 619-8340 [email protected]

49 150 Stephenson Hwy, Troy, MI 48083 (248) 619-8340 www.valeo.com