GKN China
GKN China
Adam Walker, Andrew Moss, John McLuskie.
January 2016
GKN China
中国
Zhong Guo.
The Middle
Country.
The Centre
of the
World.
GKN China
A long time keeping people out!
Top 10 themes for China 2020.
GKN China
Opportunities:
Mixed Blessings:
1. URBAN CHINA.
4. AGING CHINA.
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Growing City Clusters.
Challenges:
7. FRAGILE CHINA.
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Evolving
demographics.
2. CONSUMING CHINA.
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Huge spending potential.
8. EXPENSIVE CHINA.
3. GLOBAL CHINA.
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Further market
liberalisation.
Globalisation mandated by
the government.
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5. INNOVATION CHINA.
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Financial restructuring.
Indigenous
innovation.
9. COMPETITIVE CHINA.
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6. GREEN CHINA.
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Investment in clean
energy.
1990
2010
2030E
Youth
population
40%
26%
22%
Workforce
52%
62%
54%
Intensified local
competition.
10. STRINGENT CHINA.
•
% of total
population
Rising business costs.
Heavy government
scrutiny.
Elderly
population
8%
12%
24%
The 1 – 2 - 4 Problem:
1 Child.
2 Parents.
4 Grand parents.
Source: Frontier Strategy Group.
Made in China 2025.
GKN China
China's State Council has unveiled a ten-year national plan, Made in
China 2025, designed to transform China from a manufacturing giant
into a world manufacturing power.
The plan, endorsed by Premier Li Keqiang, is the country's first action
plan focusing on promoting manufacturing, a notice said on Tuesday.
The plan will be followed by another two plans in order to transform
China into a leading manufacturing power by the year 2049, which
marks the 100th anniversary of the founding of the People's Republic
of China.
Nine tasks have been identified as priorities: improving manufacturing
innovation, integrating technology and industry, strengthening the
industrial base, fostering Chinese brands, enforcing green
manufacturing, promoting breakthroughs in 10 key sectors, advancing
restructuring of the manufacturing sector, promoting service-oriented
manufacturing and manufacturing-related service industries, and
internationalizing manufacturing.
The 10 key sectors are new information technology, numerical
control tools and robotics, aerospace equipment, ocean
engineering equipment and high-tech ships, railway equipment,
energy saving and new energy vehicles, power equipment, new
materials, medicine and medical devices, and agricultural
machinery.
To fulfil the tasks, "Made in China 2025" will focus on five major
projects, including establishing a manufacturing innovation centre and
boosting intelligent manufacturing, said the notice.
Manufacturing 4.0. (From Workshop of the World to Manufacturing Giant). GKN China
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The 4th Industrial Revolution.
Machines talk to machines and machines
talk to product.
• Self regulating manufacturing.
• Automated quality.
• Total flexibility.
• Real predictive maintenance.
• Minimised human intervention so
minimised variability.
Concept is core to German manufacturing
strategy and adopted by China as part of
MIC 2025.
Germany partnering with China to develop.
M4.0 will make the strong stronger and
accelerate the removal of the weak – will be
significant in Chinese industrial
restructuring.
The New Silk Road – One Road and One Belt Strategy (ORAOB).
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GKN China
Opening up the Chinese interior for
development.
China will invest further in high speed rail
and nuclear power.
Will connect up to 64 countries.
Regional axis of China, India, Russia, Iran
with connectivity into Middle East, Africa
and Europe.
Both land (road & rail) and sea.
Auto Industry will follow route of silk road
– opportunity for China domestic brands.
Opportunity for India to forge a new axis
with China.
Chongqing will become a ‘super city’ as
part of this development. GDP already
12.3%.
Asia Infrastructure Investment bank.
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GKN China
Chinese President Xi and Premier Li announced the initiative in October 2013.
Bilateral and multilateral discussions and consultations commenced on core
principles and key elements for establishing the AIIB.
The bank was launched at a ceremony in Beijing in October 2014, when 22
Asian countries signed an MOU to establish the bank.
As of 29th June 2015, 50 of its 57 Prospective Founding Members have signed
the Articles of Agreement.
The AOA are expected to enter into force and AIIB to be fully established by the
end of 2015.
Doing business in China - Guanxi
Guanxi describes the basic dynamic in personalized
networks of influence, and is a central idea in Chinese
society. In Western media, the pinyin romanization of this
Chinese word is becoming more widely used instead of the
two common translations—"connections" and
"relationships"—as neither of those terms sufficiently
reflects the wide cultural implications that guanxi
describes.[1]
Closely related concepts include that of ganqing, a measure
which reflects the depth of feeling within an interpersonal
relationship, renqing (人情 rénqíng), the moral obligation to
maintain the relationship, and the idea of "face" (面子,
miànzi), meaning social status, propriety, prestige, or more
realistically a combination of all three.
Guanxi has a major influence on the management of
businesses based in China, and also those owned by
overseas Chinese in Southeast Asia, known as the bamboo
network.[2
GKN China
Quality
Not Quantity.
It’s all about relationships.
JV or WOFE – The GKN View
GKN China
GKN’s view might be biased by the success of its JV’s
Learned a lesson from the failure of our JV in the North – Jilin.
One Flag Strategy in Driveline.
2013 Expanded the business scope of our JV with HASCO (SAIC).
Invested in new JV for Land Systems Wheels to improve footprint
and customer base – Huading Wheels
Currently exploring market entry strategy for our Aerospace
business.
GKN JV’s in China – Creating a Win-Win
GKN China
The majority of GKN’s revenues in China originate from JV’s
Strong partners and excellent relationships
Chinese partners manage labour issues and relationship with local
authorities
GKN brings credibility with global customers and leading technology
JV’s are managed by Chinese management team, GKN supporting with
best practice processes and knowhow transfer
GKN in China - Summary
GKN China
The first Western automotive supplier to invest in China in 1988
More than 25 years experience in China with wholly owned businesses,
acquisitions and JV’s with various Chinese partners
Leading market positions in automotive, powder metallurgy, and land
systems
Committed to growth with localized product range and development
capabilities, fully integrated in GKN’s global network
Investment plans in place to significantly increase in size in the next 5
years
Exploring new partnership opportunities.
GKN China
GKN: leadership in four specialist, global sectors
Automotive
Powder Metallurgy
Land Systems
Aerospace
GKN in China.
Division
Location
Group
Shanghai Holdings Office.
Aerospace
Shanghai Office.
GKN China
Russia
Fokker Elmo Langfang
Driveline
Shanghai Office.
Changchun
Shanghai x 3.
TQ Shanghai.
Langfang
Beijing
Shanghai Technical Centre.
Wuhan x 2.
Changchun.
Chongqing.
GKNZ
Mengzhou.
Powder
Metallurgy
Danyang (SM&HC).
China
Huading
Mengzhou
Chongqing
Wuhan
Yizheng.
Land Systems
Shanghai Office.
Liuzhou.
Huading.
Taicang.
Liuzhou
Danyang &
Yizheng
Taicang Shanghai
Chinese Auto Industry
GKN China
Mix of Domestic producers and Foreign implants.
Foreign implants all JV’s and restricted to maximum
50% ownership.
Chinese government trying to encourage growth of
domestic manufacturers but difficult:
• Perceived quality and kudos of implants.
• Technology advantage.
• Regulation, particularly emissions, makes it more difficult
for domestics.
Chinese government encouraging Chinese OEM’s to
think more internationally.
Shanghai Driveline Systems - SDS
GKN China
公司简介Profile
成立于1988年9月
Established in September 1988
中国最早成立的汽车零部件合资企业之一
One of the earliest auto component JVs
in China
占据汽车零部件行业领导地位
Leading role in China’s auto component
industry
股东Shareholders
BOCOM
5%
HASCO
45%
GKN
35.42%
GKN China
14.58%
交通银行股份有限公司上海市分行 BOCOM-Bank of
Communications Co. Ltd (Shanghai Branch)
GKN传动系统国际有限责任公司
GKN Driveline International GmbH
吉凯恩(中国) 投资有限公司
GKN China Holding Co.Ltd.
华域汽车系统股份有限公司
HUAYU Automotive Systems Co., Ltd
GKN China
传动系统产品Driveline System
电磁控制扭矩管理器
开放式差速器
电子扭矩管理器
前半轴
锁止差速器
取力器
防滑差速器
高速固定式万向节
球笼式固定万向节 SX
端面花键式 UF 万向节
高速移动万向节
后传动轴
电机驱动桥
二段式驱动轴
电子矢量扭
矩管理器
GKN China
发展历程 Milestones
1993
1600T锻造生产流水线投产
1600T Forging line started
production
合资开业
Formation of JV
1988
1990
1989
第一根桑塔纳CKD传动轴
总成下线
Output of 1st Santana
CKD Driveshaft
1995
2001
工程中心落成
Formation of
Eng. Center
2000
1996
康桥分公司落成
Formation of Kangqiao Plant
1998
自主开发第一根等速
万向节传动轴1st
constant –velocity
shaft developed
independently
2005
2006
GDC成立
Formation of
GDC(JV)
2011
长春分公司建成
Formation of
Changchun Plant
2010
2008
申江分公司建成
Formation of
Shenjiang Plant
2009
技术中心建立
Formation of Tech
Center
武汉分公司建成
Formation of Wuhan
Plant
26 Years’ Joint Venture 1988-2014
2013
2013
武汉二分公司建成
Formation of
Wuhan Plant II
吉凯恩扭矩技术系
统（上海）有限公
司正式并入
Integration of
TSH (now TQ)
GKN China
上海
企业布局Footprint
武汉 WUHAN
武汉工厂
Wuhan Plant
重庆
长春 CHANGCHUN
武汉二厂
Wuhan Plant II
长春工厂
Changchun Plant
SHANGHAI
总部 Headquarter
周浦工厂Zhoupu
Plant
康桥工厂Kangqiao
plant
技术中心 Tech
Center
CHONGQING
CHANGCHU
N
申江工厂Shenjiang
Plant
GDC（合资JV)
扭矩科技公司 TQ
YIZHENG
WUHAN
SHANGHA
I
仪征 YIZHENG
CHONGQING
仪征基地
Yizheng Base
GKN China
客户Customers
市场占有率超过45%
Over 45% market share
20
SDS Shanghai Technical Centre Expansion.
Current facility
GKN China
Ground Breaking 25 October 2013
Localizing latest technology, full Driveline Systems capability.
300 engineers. Open for business Q4 2016.
GKN Aerospace in China
GKN China
The Market
GKN China
China is one of the fastest growing aviation markets in the
world.
China Aviation Market in the next 20 years.
6,020 new A/C.
$870 billion.
17% of the world market value.
By 2033 China and North America will be the two largest
aviation markets.
Is it happening?
GKN China
C919 Roll Out (02-11-2015)
Aircraft orders:
The fastest growing aviation market.
880 aircraft orders placed during 2015.
ARJ First Delivery to Chengdu Airlines
(29-11-2015)
COMAC progress:
517 orders for C919 and 315 orders for ARJ.
ARJ delivered to its launch customer in Nov 2015.
C919 rolled out in Nov 2015 with the plan for first
flight in Q4 2016.
The development of Wide Body Long Range aircraft
is underway between COMAC and UAC (United
Aircraft Corporation) of Russian .
Airbus/Boeing in China:
A330 cabin completion centre.
B737 completion and delivery centre.
COMAC/UAC WBLR Aircraft
Chinese Aerospace: The View from the Cockpit.
GKN China
AVIC
COMAC
ARJ21
AC313
MA60
President Xi Jinping – President of China
Chairman Jin Zhuanglong – Chairman of COMAC
MA700
C919
President Xi :
•China must achieve the goal of creating its own
"jumbo jet" at all costs.
•"The ability to develop and make a large airplane
represents the strength of a country's aviation
industry“
CJ1000
•“It is a symbol of a country's overall strength and
power. A large airplane is the dream of several
generations of Chinese.“
China: top mandate to grow indigenous industry
GKN China
GKN Aerospace China Strategy
Grow a substantial business in
China/Asia.
Low cost source.
Balanced global footprint.
Create a link to national airline
champions.
Work with a Chinese partner.
GKN Aerospace Fokker Elmo China
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Established in 1997.
Located in Langfang, Hebei Province.
Initially started as Joint Venture.
Wholly owned since 2005.
> 900 employees & growing.
> 8000 wiring systems / month.
Langfang
China
Beijing
International Airport
45 Miles
Tianjin
Seaport
75 Miles
GKN China
Powder Metallurgy
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Currently two plants in China Jiangsu Province
plus powder mixing facility:
• Danyang – Plant Powder Facility.
• Yizheng Plant.
Powder JV near Beijing nearing completion –
target 50m GBP sales by 2019.
GKN China
Powder Metallurgy
Product, Customer & Plant focus
GKN China
Carrier
Press
Tonnage 500T
Synchro Hubs
Conrods
VVT parts
DAN
Press
Tonnage 150T
Steering
Braking parts
YIZ
Hydraulic appl
Engine and B/S
Press
Tonnage 50T
Land Systems
GKN China
Three plants in Liuhzou, Huading, and Taicang.
Currently supporting domestic markets but will
increasingly also support global OEM’s.
Growth strategy to take advantage of both current and
future market growth.
GKN China
GKN Power Solutions Liuzhou
Established
2006
Location
Liuzhou, Guangxi
Shareholders
GKN 100%
Products
产品
Wheels for Construction, Agricultural,
Mining Machinery, Harbour Cranes,
Fork Lift Trucks, Other Special
Machinery; double universal joint for
the off highway machinery
Main Customers
主要客户
LiuGong, Rimtec, Linde, Komatsu,
John Deere, SANY, Cargotec
Rimtec、
GKN China
Lianyungang GKN Huading Wheels
Established
2013
Location
Lianyungang, Jiangsu
Shareholders
GKN 80%
Huading Wheels 20%
Products
Wheels for Agricultural Machinery, other
Special Machinery
Main Customers
Shandong Changlin Deutz-Fahr, Guanzhou
Tairong, Qingtuo, Dongfeng, Xuzhou KAT
Changlin、Guanzhou Tairong, John Deere.
GKN China
GKN Stromag Taicang
Established
2010, acquired by GKN in 2011.
Location
Taicang, Jiangsu.
Shareholders
股东
GKN 100%
Products
Disc Brakes for Wind Turbines and
boat lifts.
Main Customers
Goldwind.
GKN China
GKN Zhongyuan Cylinder-Liner (GKNZ)
Established
2005
Location
Mengzhou, Henan
Shareholders
GKN 59%,
ZYNP 41%
Products
产品
Heavy Duty Diesel Engine
Cylinder Liners
Main Customers
主要客户
Cummins, Deutz, DAF, Scania, MTU,
Caterpillar, Wuxi Diesel Engine
MTU
GKN China
CSR – towards a sustainable future.
• 2012 GKN won the award for the British
Company of the Year in China.
• 2014 nominated as in the top 5 British
Companies for CSR in China.
Conclusions
GKN China
GKN has a very strong heritage in China based upon
strong partnerships and market leading positions in
Automotive.
This learning and success is being translated into
growing positions in GKN’s other divisions.
China forms an important part of GKN global growth
strategy.
We are confident of continuing success in this very
important market.
GKN China
谢谢
Thank You