Research and Development

In a continuously and rapidly changing competitive environment, CNH Industrial’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. CNH Industrial’s innovation process consists of a series of clear-cut steps, from the evaluation of innovative concepts up to the final step before product development. The Group believes that innovation is essential to offering products that are consistently high-tech, ecofriendly, ergonomic, safe and cost-effective. In particular, the main areas of focus are reducing polluting emissions, assessing the potential of alternative propulsion systems and fuels, reducing the cost of operations, and improving ergonomics and safety.

The following table shows the number of collaborative research projects in which CNH Industrial was involved during 2014:

Reduction of polluting emissions 6
Optimization of consumption and energy efficiency 30
Alternative  fuels 3
Alternative propulsion systems 2
Others 40
Total 81

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 approximately 40 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.

The following table shows the number of research and development scientific collaborations in which CNH Industrial was involved during 2014:

Universities 41
Research Centers 9
Total 50

In 2014, Group expenditure on research and development (including capitalized development costs and costs charged directly to operations during the year) totaled $1,122 million, or 3.6% of net revenues from Industrial Activities. Research and development activities involved approximately 6,100 employees at 49 sites around the world.

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, 2014 and 2013:

($ million)20142013
Agricultural  Equipment 519 564
Construction  Equipment 130 151
Commercial Vehicles 350 395
Powertrain 123 130
Eliminations and Other - -
Total of Industrial Activities 1,122 1,240
Financial Services - -
Eliminations - -
Total for the Group 1,122 1,240

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 7,518 active patents, including 761 new patents registered during the year (in addition to 2,846 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 its business, and their loss could have a material adverse effect on the Group.