Fiat Auto and Microsoft Team Up For a Long-Term Strategic Automotive Partnership

REDMOND, Wash., July 15, 2004 — Fiat Auto and Microsoft Corp.’s Automotive Business Unit today announced a long-term strategic automotive partnership to develop innovative telematics solutions for motorists. The two companies’ novel approach of designing in-vehicle telematics systems combines Fiat Auto’s experience and research in telematics services with Microsoft’s expertise in providing standard platforms, services and applications.

The goal of the partnership is to design telematics systems that will enable drivers to communicate effectively with the outside world. The telematics systems will be flexible, easy to access and easy to use. They will allow users’ own devices such as cellular phones, Pocket PCs or Windows Mobile (TM) -based devices to integrate with the vehicle. Motorists will be able to use standard information services, including Web services, and a hands-free phone, while Bluetooth®
connectivity ensures that drivers’ personal address books and contacts will be easily accessible in the car. In addition, digital music stored in personal electronic devices will be available through a USB connection in the dash. All systems will feature high-quality voice activation. Drivers will have access to a wealth of services, including off-board navigation and real-time traffic information, such as those offered by Fiat’s bCONNECT.

The joint Fiat Auto and Microsoft system will be based on standard hardware and will operate with Microsoft® Windows®
Automotive software, which will enable Fiat Auto to implement a software design that can be customized and upgraded according to customers’ preferences. Both companies plan to develop a system that interoperates with the vehicles’ Controller Area Network (CAN) for diagnostic data.

Magneti Marelli, Fiat Group’s automotive components arm, will contribute to the venture by building the hardware on which the systems are integrated. The device from Magneti Marelli will be based on a reference design developed by Microsoft and Fiat Auto.

“Fiat Auto is at the forefront of telematics, having been among the first carmakers to feature a wide range of devices in all its vehicles, such as the bCONNECT infomobility services. We are very pleased to have Microsoft, a great innovator in the software industry and a leading expert in designing flexible platforms, as a partner in a unique business model based on re-creating, on board, the computer’s world and structure,” said Walter Mortara, senior vice president of product and process engineering at Fiat Auto.

“Fiat Auto has consistently developed cars that have been affordable and practical and have greatly contributed to the motorization of entire countries. We are very excited in teaming up with Fiat Auto, as we can bring industry-leading yet practical telematics solutions to motorists purchasing Fiats,” said Pieter Knook, senior vice president of the Mobile and Embedded Devices Division and Communications Sector Business at Microsoft. “By combining Fiat’s knowledge of the auto industry with our knowledge of software, together we will be able to meet the needs of drivers and passengers for a safer and more enjoyable in-car experience.”

About Fiat Auto

One of the pioneer companies in the automobile industry, Fiat has produced more than 85 million passenger cars and light commercial vehicles, including no less than 400 models, since 1899, when the company was founded in Turin, Italy. Some of them have represented milestones in the automotive industry. Fiat Auto operates world-wide with the following brands: Fiat, celebrated for value, economy, and innovation and whose mass produced cars are distributed over almost the entire price class spectrum; Lancia (acquired in 1969) means prestige cars noted for their elegant styling, and comfort; Alfa Romeo (acquired in 1986) is famous as a maker of sport and luxury vehicles of style and distinction.

About bCONNECT, a division of Fiat Auto

bCONNECT is the leading provider of infomobility, location based and vehicle behavior tracking services Europe-wide. Thanks to its unique database of contents, including high quality traffic information, bCONNECT offers a wide range of services through different channels like in-car telematic units, mobile and smart phones, internet and PDAs. Partners using bCONNECT services include: Fiat, Lancia, Alfa Romeo, Maserati, Peugeot, Vodafone, Tim, Wind, Sony Ericsson, Motorola and Bosch. For more information about the company see http://www.bconnect.biz/ .

About Magneti Marelli

Magneti Marelli, a Fiat Auto Group company, is an international leader in the design and production of high-tech components and systems for the automotive industry based in Italy. Founded in 1919, the company has industrial and R & D facilities in Argentina, Brazil, the Czech Republic, China, France, Germany, Great Britain, Italy, Malaysia, Mexico, Russia, South Africa, Spain, Turkey, and the US. Magneti Marelli supplies the world’s major car manufacturers such as Renault, Citron, Peugeot, Fiat Group, Ford, Volkswagen, Audi, Seat, BMW, Rover, DaimlerChrysler, GM-Opel, Volvo, Saab, Nissan, Toyota, and Daewoo.

About Windows Automotive

Microsoft has been working with the automotive industry since 1995 to provide great software that delivers information, entertainment, communication and services in vehicles. The company works closely with automakers, suppliers, aftermarket manufacturers, service providers and consumers to provide the embedded automotive industry with the systems and tools for building the next generation of intelligent, Windows Powered devices that demand rich applications and access to Internet services for a wide range of flexible solutions. Windows Automotive is an open platform that allows developers to quickly create powerful in-car computing solutions. It offers flexibility, with a choice of computing platforms, hardware peripherals and software components, as well as a large community of experienced developers for Windows CE.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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