Research and Development

In a continuously and rapidly changing competitive environment, the Group’s research activities are a vital component in its strategic development. Research and development times are reduced, where possible, to accelerate time-to- market, while taking advantage of specialization and experience in different markets. Technical and operational synergies and rapid technical communication form the basis of the Group’s research and development process.

The Group’s research activities are also strongly focused on environmental, social and economic sustainability. For each business, that translates into developing production processes and products that are both eco-compatible and socially responsible – and  always a step ahead of continuously evolving regulatory standards. For products, in particular, the main areas of focus are reducing polluting emissions, assessing the potential of alternative propulsion systems and fuels, and improving ergonomics and safety.

CNH Industrial considers participation in external working groups and research projects strategically important in developing know-how and promoting the active exchange of ideas. In addition to long-standing collaborations with the University of Turin, Turin Polytechnic and Milan Polytechnic in Italy, the CNH Industrial brands also work with around 30 other universities in North America (USA and Canada), Europe (Italy, Spain, Germany and Belgium), Latin America (Brazil) and Asia (China) to further enhance their activities in innovation. For many years, CNH Industrial has actively participated in national and international working groups and collaborative research projects. Those activities are primarily focused in the areas of: precision agriculture, fuel efficiency, alternative fuels and the efficient use of alternative propulsion systems.

CNH Industrial is involved in two projects forming part of the European Commission’s Seventh Framework Program that are focused on using precision agriculture to achieve more sustainable crop management and production. The first is Robot Fleets for Highly Effective Agriculture and Forestry Management (RHEA) developed by a consortium of 19 partners whose target is to diminish the use of agricultural chemical inputs by 75%, improving crop quality, as well as health and safety for humans and at the same time reducing production costs. Clever Robots for Crops (CROPS), the second of the two projects, involves 14 partners who are developing a highly configurable, modular platform that will be capable of site-specific spraying of foliage and selective harvesting of fruit. Another objective of the CROPS project is to develop techniques for reliable detection and classification of obstacles and other objects to enable successful autonomous navigation and operation in plantations and forests.

In the area of long-distance road transport, the Group is also involved in the COmplete Vehicle Energy-saving Technologies for Heavy-Trucks (CONVENIENT) project with 21 European partners. The project targets a 30% reduction of fuel consumption in vehicles for long-distance freight transport, using innovative architectures and technologies that improve onboard energy efficiency through enhanced integration of the individual components.

In 2013, Group expenditure on research and development (including capitalized development costs and costs charged directly to operations during the year) totaled €934 million, or 3.8% of net revenues from Industrial Activities. Research and development activities  involved approximately 6,300 employees at 48 sites around the world. In 2013, the expansion of the Harbin China site progressed with the official inauguration of CNH Industrial’s Product Development Center, which will focus on development of advanced agricultural machinery products tailored to the needs of the local market. The Harbin facility is the largest of its kind operated by a global agricultural machinery manufacturer in Northeast China. In 2013, the site began development of a corn harvester for the local market.

The following table shows the Group’s total research and development expenditures, including capitalized development costs and costs charged directly to operations during the year, by Segment for the years ended December 31, 2013 and 2012:

(€ million)20132012
Agricultural and Construction Equipment538520
Trucks and Commercial Vehicles298289
Powertrain9886
Total934895

The Group owns a significant number of patents, trade secrets, licenses and trademarks related to its products and services, and that number is expected to grow as the Group’s technological innovation continues. At year end, the Group had 7,710 active patents, including 1,036 new patents registered during the year (in addition to 2,242 applications pending). The Group files patent applications in Europe, the United States and around the world to protect technology and improvements considered important to the business. Certain trademarks contribute to the Group’s identity and the recognition of its products and services and are an integral part of the Group’s business, and their loss could have a material adverse effect on the Group.