INNOVATIONS FOR ECO-FRIENDLY NON-ROAD APPLICATIONS

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1 exhaust technology NON-ROAD INNOVATIONS FOR ECO-FRIENDLY NON-ROAD APPLICATIONS DRIVING THE MOBILITY OF TOMORROW

2 2 exhaust technology Non-ROAD Data on Eberspächer exhaust technology*: Turnover in EUR 1.93 billion Number of sites 35 Number of countries 22 Number of plants 22 Employees 4,284 Core customers of non-road exhaust technology: John Deere, Deutz, Agco, Kion, Same Deutz-Fahr, Daimler, Bosch *As of 2008

3 exhaust technology Non-ROAD 3 For demanding requirements on low emissions Environmentally friendly technologies are increasingly becoming a key criterion in the non-road vehicle market. Manufacturers who already comply with the statutory limits of the future will guarantee themselves an important lead over their competitors. And the fact that requirements for emission restrictions will rapidly continue to become more and more rigorous is beyond doubt especially in view of the growing level of mobility in the emerging areas of Asia and South America. Eberspächer has been aware of this challenge for a long time. As one of the world's leading specialists for exhaust systems, we help vehicle manufacturers throughout the world to achieve their ambitious aims. Leading-edge technology is a tradition at Eberspächer. As early as 1932, we won a muffler competition in Paris and since then we have constantly focused on innovation. However, requirements have increased enormously since then. Where back then a simple muffler would have sufficed, sound design is expected today and the once simple exhaust pipe has become a complex "exhaust treatment system". With our exhaust systems, we make an active contribution to more eco-friendly mobility throughout the whole world. We are involved in all the key markets in Europe, America and Asia in order to work closely with our customers to meet the challenges presented by increasingly stringent environmental standards. That is why we invest an average of 7% of our net turnover in global development activities and through continual product and process optimization ensure attractive unit costs which our customers appreciate as much as the quality of our products and the strong partnership philosophy which characterizes our company more than virtually any other. Focused on the future: Perfect mechanical, thermal and chemical coordination of the various components in the exhaust system and the engine that is the secret of the success of the Eberspächer exhaust specialists. Currently, considerably more than 90% of pollutants can be eliminated using modern system technology. Noise emissions are also reduced dramatically. However, rapid progress still has to be made.

4 4 exhaust technology Non-ROAD Innovation is our driving force Our customers want to achieve a great deal and, as a high-performance partner, we would like to play a major part in constantly giving new impetus to technological advances. We have developed around 20,000 exhaust systems in all vehicle areas and stationary systems and have around 1,200 valid patents: these figures alone are testament to our on-going success in the field of exhaust technology. And in the future we will continue to be spurred on by one thing above all the driving force of innovative ideas. Dynamic approach to the future: There is no doubt that what we have achieved so far with respect to reducing pollutants and noise is something to be proud of. But we will not stop there there are already new challenges to be met. The exhaust emission standards for fuel-powered combustion engine vehicles in the non-road market have been significantly tightened and with TIER 4 (final) the average CO 2, NO X and HC emissions will be drastically reduced. We have risen to the challenge and come up with a solution which satisfies on every level. We have developed a highly efficient exhaust treatment system for heavy duty vehicles, which fulfills the EPA 10 exhaust emission standards and is already in series production. Innovative methods for developing new concepts: Innovation is the core corporate value at Eberspächer. More than 360 highly-qualified engineers and technicians work in our own ideas factories or often on-site with the customer on solutions for the future. When we design new technologies, we use the same modern CAD systems as our customers supplemented by simulation and computing programs. The precision of these programs enables us to optimally design our solutions in line with the application requirement. The extreme requirements in the non-road vehicle market are especially taken into account in this regard: Dirt, wet, mud Thermal shock conditions Extremely low surface temperatures, e.g. combine harvesters Mechanical strain caused by extreme vibrations, e.g. construction, agricultural or mining machinery We also rely on state-of-the-art manufacturing methods at our production facilities. The establishment of "Centers of Competence" has generated a new dynamic with respect to process innovations in order to continue to make our mark as the technological leader in a mobile world. No compromises on quality: All the work carried out by Eberspächer departments is based on a quality management system which corresponds to the TS global standard and which is steadfastly committed to the zero failure strategy. Furthermore, all Eberspächer plants are certified according to ISO 9001, QS 9000, VDA 6.1 and ISO Numerous quality awards from the vehicle manufacturers themselves also provide further proof that we are on the right track with our performance philosophy. Advantages of leading-edge Eberspächer exhaust technology: Functions achieved reliably Innovative solutions for required space, weight, back pressure and acoustics Proven durability Very cost effective

5 exhaust technology Non-ROAD 5

6 6 exhaust technology Non-ROAD India USA Eberspächer close to our customers in numerous countries Fashioning the future. On a global level. Protecting the environment is a challenge that knows no boundaries. Therefore vehicle manufacturers all over the world rely on close, on-going cooperation with the exhaust specialist Eberspächer. In numerous countries, Eberspächer provides support directly at its customers production facilities. And around half of the total Eberspächer turnover is generated with exports or production abroad. Tailor-made customer orientation for technology: Every Eberspächer exhaust system is custom-made. Close cooperation with the customer is therefore very important at international level too. Approximately 2,130 Eberspächer employees work abroad. Global just-in-sequence supply to the final assembly line has already been implemented in many countries. In addition to the main plant in Neunkirchen with more than 1,900 employees, the global Eberspächer production network includes sites in Europe, Asia and North and South America. These sites are supplemented by our development centers in Esslingen, Unna and Detroit, plus various engineering offices with Resident Engineers. In this way we ensure that even in the very early product development phases, every aspect meets the customer requirements. Our commitment goes further: The automotive industry is meeting global challenges with regional production and development facilities and Eberspächer is determined to support this development on a worldwide basis. Our international presence is being continually and systematically extended. We are implementing on-going, global activities in development and in production e.g. in Korea and Japan and in the emerging markets of Brazil, Russia and China. On a 5,000 m² site near Pune in India, 120 employees have been producing exhaust systems, mufflers and catalytic converters since April 2009 a total of 750,000 parts per year. In the affiliated development center, the engineers have access to state-of-the-art work stations. These cross-border cooperations and joint ventures provide important impetus for the future and bring Eberspächer's expert knowledge even closer to the customer.

7 exhaust technology Non-ROAD 7 South Africa Headquarters Germany America Europe Africa Asia Brazil São Paulo Canada Toronto USA Novi Brighton Tuscaloosa Spartanburg Germany Esslingen Stuttgart Neunkirchen Emden Munich Unna France Paris St. Michel Maubeuge Austria Graz Russia Moscow Sweden Trollhättan Czech Republic Rakovnik South Africa Port Elizabeth East London Pretoria China Dalian Changchun India Pune Japan Tokyo Korea Seoul Great Britain Coventry Italy Turin Exhaust technology

8 8 exhaust technology Non-ROAD Optimum infrastructure for development Without an ideal development infrastructure, it would be impossible to meet our standards concerning the quality of our products. Therefore we pay extremely close attention to creating optimum conditions and utilizing state-of-the-art technology and systems in all areas. Thermodynamics: In order to optimize the flow and reduce thermal loss or the surface temperature, modern computer technology is used once again. Engine and emission test benches are available for testing finished parts under actual operating conditions. Durability: The service life of an exhaust system is a considerable challenge for our specialists in the durability departments and material labs. Using modern computing methods and test facilities, we arm our products against thermal, mechanical and chemical attack. Design: Each new exhaust system that is developed is tailor-made to the installation space available in the relevant vehicle/engine. Stateof-the-art CAD systems are used for this purpose, which also form the basis of simulations. Acoustics: The acoustic set-up firstly ensures that statutory requirements are complied with. Secondly, it is a key factor for the subjective sound characteristics (DNA) of the vehicle. The sound design is primarily achieved by means of simulation programs and verification in appropriate sound studios. Finally, validation is performed on modern engine and vehicle roller test benches. Global development network: Eberspächer has a global development network comprising an R&D center at the headquarters in Esslingen, a D&D center with prototyping facilities in Unna, a D&D center in Detroit, MI, USA and several engineering offices (Brazil, France, Italy, Great Britain, India, Korea, Japan). All the tools and methods needed to develop exhaust systems according to the Eberspächer Design & Development handbook are available at every site.

9 exhaust technology Non-ROAD 9 Constant progress in process technology In addition to ideal conditions for development activities, we also ensure constant progress and the implementation of the most up-todate innovations in the area of process technology. Extremely flexible plant engineering and state-of-the-art simulation options therefore facilitate an exceptionally high degree of process reliability and optimum use of materials. Centers of Competence: In order to meet the technological demands of the future, Eberspächer has reorganized its technology sector. The following issues are our focal points: Developing new technologies for all high-tech plants within the group. Developing suitable technologies for all emerging markets and low cost countries modified, requirementsoriented technology for these particular locations. Development of globally-applicable technology standards Global consultation and support for the developments with respect to the most up-to-date processes, in cooperation with the OEMs. Leadership in exhaust technology. In order to achieve these ambitious aims, the technology segment has been divided into four different areas. 1. "Canning" technology area: This area deals with all the production processes involved in canning as well as the integrated assembly sequences. In addition to the various canning processes, we have recently developed and implemented a high-quality, unique procedure for our customers the "mono drill process". The advantage of this process is the absolute precision fit of the parts to be drilled (jacket housing, mounting mat and honeycomb) and the measuring options within the honeycomb, without any more space being taken up by the additional gap between two honeycomb elements. 2. "Automation" technology area: Smaller and smaller lot sizes and the increasing variety of versions demand new technologies and the highest possible degree of efficiency. At Eberspächer, automated measurement methods with networked processes ensure a constant exchange of information between the individual machines and production lines. Deviations from the target status are detected and corrected while the process is still running. This facilitates a considerable reduction in start-up wastage at the beginning of production and of the set-up costs on the machine. The throughput time of an order is also shortened. 3. "Forming" technology area: "Weight reduction" is currently one of the most important demands that the OEMs are placing on the supply industry. In order to respond to this issue, various concepts are currently being developed e.g. the various different tailored processes (tailored tubes, tailored strips) as well as the use of new materials (e.g. titanium) with ever more complex geometries. This development process is supported by stateof-the-art simulation technology. 4. "Joining" technology area: Smaller and smaller material wall thicknesses in conjunction with new materials and material combinations, coupled with ever increasing component stresses all this without effects on quality. In the joining technology area, Eberspächer is currently working on the "laser hybrid process", a combination of laser and MIG welding processes. Less energy input, faster welding speed and a higher degree of process reliability are the obvious advantages of this new technology.

10 10 exhaust technology Non-ROAD Top-class quality assurance AND PRODUCTION It is our objective that the same quality standards are experienced by our customers at all Eberspächer sites resulting in top quality products. We have organized our quality systems based on this objective. Central quality management: The Eberspächer quality standards are developed in the central quality management department. This includes globally consistent problem-solving methods such as "Drill Deep" and "Fast Response", standardized testing concepts and design and process-fmeas to ensure successful new product launches. Adherence to the standards is monitored globally via a central auditing program. Customer quality officer: We have appointed quality officers for each customer who ensure that all quality-specific customer expectations are met during the project and during series production. Warranty lessons learned: In order to obtain systematic information about our products in the field throughout the world and to use this for new projects, a central warranty office has been set up in Neunkirchen. Cross-location processes have also been introduced for this purpose. Our global standards are developed on an on-going basis at our annual quality conferences. Supplier management for developing a qualified, sustainable supplier base: Optimum supplier management is achieved at Eberspächer by involving the supplier in our program management system at an early stage. Working in partnership, innovative and cost-optimized products are developed for the customer and the best possible supply chains for JIT deliveries are worked out. New suppliers are assessed by a team of experts and they undergo systematic qualification with respect to customer requirements and Eberspächer specifications. The ability to be innovative, globality, process capability and reliability are the key selection criteria. A comprehensive risk analysis provides evidence of the capability of the new supplier. Targeted further development of series production suppliers, based on supplier assessments and global "benchmarking", ensures that the supplier portfolio is continually improved in terms of quality, delivery performance and costs. "Best in Quality" in exhaust technology: The factors which contribute to our success are: Eberspächer process management: Integrated quality processes at all sites. Program mangement: Standardized forward planning for quality and "gate" approvals in all customer projects. Quality control: Stringent monitoring of the quality data (delivery performance, rejects etc.) to improve the process performance as well as to facilitate competition between the sites. Quality offensive at all production facilities: The Eberspächer philosophy includes an effective defect avoidance strategy through targeted defect recognition, stringent defect analysis and continual defect correction. This raises every employee's awareness: "We must produce quality."

11 exhaust technology Non-ROAD 11 FLEXIBILITY IN PRODUCTION FOR A HIGH DEGREE OF RELIABILITY We at Eberspächer can only meet our customers high quality expectations and the challenges of a highly competitive market with our state-of-the-art technologies and machines. Flexible production of catalytic converters: Canning is the art of careful packaging. Brute force cannot be used as the porous ceramic honeycombs for catalytic converters and diesel particulate filters are extremely easy to damage due to their fragile structure. As opposed to the traditional canning process, Eberspächer uses high-tech processes to meet the stringent quality and cost requirements of our customers. For this purpose, the Eberspächer group uses fully-automatic procedures within the canning process. For the production of underhood catalytic converters, Eberspächer uses highly-flexible, modern production lines. and quantity. Within the system, the ceramic honeycombs are "paired up" with the mounting mat and they are pre-positioned via a shuttle. The subsequent canning process assembles the ceramic, the mounting mat and the can together. Integrated labeling is then performed to meet the traceability requirements of our customers. If substrate or mat properties have to be changed when the project is up and running, our flexible system technology enables the necessary process modifications to be made. A high degree of canning and operational reliability is still ensured. The process sequence begins with supplying the plate and ends with the finished catalytic converter shell. After the plate has been separated off, it is bent. Then it is welded and calibration and pressing work is carried out at the same time. The subsequent canning process is decoupled by means of an intermediate buffer for the cans. The newly defined tandem canning process features a high level of performance with respect to quality

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13 exhaust technology Non-ROAD 13 Solutions and innovations for today and tomorrow Due to the more stringent exhaust emissions standards, which will come into force in 2011 in Europe and the USA with Stage III B and interim Tier 4, much more will be required of future exhaust systems. Up until now, diesel particle filters (DPF) or SCR systems (selective catalytic reduction) could usually be avoided using engine modifications only. This situation will change again significantly, depending on engine power, when the tighter final Tier 4 comes into force in A onebox or twobox design combination system will then be required. Performance that sets the standard: Eberspächer is an expert in the technology and application of combination systems like virtually no other exhaust system manufacturer. We clearly proved this with the EPA 2010 in series production in the utility vehicle market. These combination systems do not just fulfill the strict exhaust emission standards for particles, nitrogen oxides and hydrocarbons, but also have a high durability performance that sets the standard. What is unique about combination systems? Conbination systems consist of two main components a diesel particle filter and an SCR catalytic converter system. The diesel particle filter removes soot particles from the exhaust emissions according to statutory levels. The particles are collected in alternately closed ducts in the DPF honeycomb until a pressure sensor notifies the control electronics of the necessity of regeneration. The regeneration of the DPF can be activated by mechanical means such as post-injection (enriching of the exhaust) or the HC-Doser until the presure sensor in coordination with the thermal sensors signals the end of the regeneration. In order to convert the unburned fuel into heat, a catalytic converter (diesel oxidation catalyst DOC) is connected ahead of the DPF so that the required temperature of approx. 650 C can be reached. We have anticipated the rare but sometimes necessary service work on the DPF by making it serviceable. In this way the whole system can maintain all its functions as well as completely fulfill all the statutory regulations throughout its entire defined service life. Highly effective SCR catalytic converter systems for the tightest exhaust emissions standards: After the removal of soot particles the exhaust is mixed with an injected aqueous urea solution also known as "AdBlue". It is important that in this process the aqueous urea solution is completely mixed with the exhaust without creating any droplets or urea deposits within the exhaust system. The "AdBlue" is converted to ammonia, which in turn reacts with the nitrogen oxides in the SCR catalysts to nitrogen and water. SCR catalytic converter systems mixing elements improve efficiency: When the aqueous urea solution is injected upstream of the catalytic converter, the mixing element, positioned behind the injection point, takes on two important roles. It ensures that the aqueous urea solution is distributed homogeneously in the exhaust stream and it encourages vaporization of the urea/water droplets due to the additional surfaces in the exhaust stream. Both of these effects combine to increase the efficiency of the SCR catalytic converter. A clearly visible benefit: The advantages of the combination system are obvious. Pollutant regulations are met and engine manufacturers can concentrate fully on the performance optimization and dynamic of the engine.

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15 exhaust technology Non-ROAD 15 Active Silence system from Eberspächer The principle of cancelling unwanted sound waves by using intentionally generated "antiphase" sound waves has been patented since However, the effect only began to be used for technical purposes in the 1980s e.g. for sound cancellation headphones for pilots. Anti-sound and sound design not a contradiction in terms: In principle, anti-sound is also suitable for use in mufflers. However two factors have prevented it from being used effectively up until now the ambient conditions inside the exhaust systems and the quickly changing engine speeds and loads on the engine. The high-performance, cost-effective sound transducers (Active Silence system) developed by Eberspächer have made significant advances in this area. Another problem has been solved by means of innovations in the field of electronic computing technology the required controller hardware has now become so small and powerful that it can, for example, be integrated into conventional engine control units. adapted to the vehicle or the driving situation by means of software settings alone. In the pre-development phase, the Active Silence system has already been successfully tested on 4, 6 and 8-cylinder engines. Benefits about the Active Silence Technology: Reduction of the muffler volume Back pressure reduction (fuel consumption) Reduction/elimination of frequencies/engine orders Enhancement of frequencies/engine orders Weight reduction (fuel consumption) In addition to eliminating sound waves i.e. pure sound insulation the Active Silence system is also capable of enhancing certain frequencies (engine orders) in order to achieve the required sound quality (sound design). As opposed to conventional exhaust systems with passive mufflers, this means that exhaust noises can be Active Silence system Engine Catalytic converter Engine Control signal Amplifier Engine control unit Active Silence controller Error microphone signal Amplifier Sound Anti-sound Eliminated sound

16 Headquarters J. Eberspächer GmbH & Co. KG Eberspächerstrasse Esslingen Phone: Fax: Version 04/2010 FACT factnet.de Printed in Germany. Subject to change without notice.

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