GKN China
GKN China
Andrew Moss
John McLuskie
January 2015
GKN China
中国
Zhong Guo.
The Middle
Country.
The Centre
of the
World.
GKN China
A long time keeping people out!
GKN China
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
Quality
Not Quantity.
It’s all about relationships.
GKN China
JV or WOFE – Questions to Ask.
Are we resourced to succeed on our own?
How strong is our local network?
Do we need access to existing marketing and distribution channels?
Is a suitable partner available?
Will the WOFE have the same access to government support?
Is control or risk sharing a priority?
GKN China
JV or WOFE – The GKN View
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.
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 China
GKN JV’s in China – Creating a Win-Win
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 China
GKN in China - Summary
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 partnerships in Aerospace and Land Systems
GKN China
GKN: leadership in four specialist, global sectors
Automotive
Powder Metallurgy
Land Systems
Aerospace
GKN China
GKN in China - 2013
Wheels
15 plants, 6000 employees
Lianyungang
2013 Sales £730million
SDS
Changchun
Hoeganaes
Danyang
Sinter Metals
Changchun
Danyang
Sinter Metals
Beijing
Yizheng
Aerospace
Shanghai Office
GKN Z
Mengzhou
Wuhan
Shanghai
GKN China
Holding
Shanghai
Chongqing
GDC
Chongqing
LandSystems
Shanghai Office
Aerospace
Automotive
PM
Land Systems
SDS (2 Plants)
Wuhan
SDS (3 Plants)
Guangzhou
Shanghai
Wheels
TS
Liuzhou
Stromag
Taicang
Shanghai
GKN China
Chinese Auto Industry
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.
GKN China
UBS China Auto Industry Report July 2014.
The Chinese government has allowed foreign automakers to set up JVs in China
and to own up to a 50% stake in the hope of gaining access to technology, or
what is known as the "exchanging market for technology" policy. However, after
30 years the SOEs have not accumulated much technological knowhow due to a
lack of bargaining power and incentives, while the global auto brands have taken
70% market share and are earning more profits than their Chinese counterparts
through component sales and royalty fees.
This is a lesson that will no doubt be learned in
other markets such as aerospace.
Profile
Established in September 1988
One of the earliest auto component
JVs in China
Leading role in China’s Auto
component industry
Business scope expanded in 2013 to
cover full GKN Driveline product range
- Torque Shanghai business merged
into SDS
Shareholders
BOCOM
5%
HASCO
45%
BOCOM-Bank of Communications Co. Ltd (Shanghai Branch)
GKN
35.42%
GKN China
14.58%
GKN Driveline International GmbH
GKN China Holding Co.,Ltd.
HUAYU Automotive Systems Co., Ltd
13
SHANGHAI
Footprint
WUHAN
Wuhan Plant
CHANGCHUN
Wuhan Plant II
Changchun Plant
Headquarter
Kangqiao plant
Zhoupu Plant
Tech Center
CHONGQING
CHANGCHUN
Shenjiang Plant
GDC（合资JV)
TQ
YIZHENG
SHANGHAI
WUHAN
YIZHENG
CHONGQING
Yizheng Assembly
Plant
14
SDS Org structure
Management Office (MO)
董事总经理
Managing Director
副总经理 –John McLuskie
Deputy GM
薛锦达
Xue Jinda
副总经理 叶连祥
Deputy GM Ye Lianxiang
副总经理 顾啸峰
Deputy GM Gu Xiaofeng
审计法务室
Legal & Audit
部门 Functions
管理部
Management
赵英南 Zhao Yingnan
财务
Finance
顾正启 Gu Zhengqi
人力资源
Human Resources
张蕙 Zhang Hui
市场营销
Marketing & Sales
徐俭 Xu Jian
质量管理
Quality Management
陈安 Chen An
部门 Functions
规划
Planning
陈慈平 Chen Ciping
物流 / ISIT
Logistics / ISIT
陈祖荣 Chen Zurong
采购
Purchasing
霍云龙 Huo Yunlong
技术中心
Technical Centre
张正华 Zhang Zhenghua
工厂 Plants
康桥工厂
Kangqiao Plant
金红心 Jin Hongxin
周浦工厂 (申江厂)
Zhoupu (Shenjiang Plant)
陆有根 Lu Yougen
扭矩业务
Torque Business
王一峰 Wang Yifeng
武汉工厂&二厂
Wuhan Plant &Plant II
王亚哲 Wang Yazhe
长春工厂
Changchun Plant
倪永刚 Ni Yonggang
重庆纳铁福
GDC
章磊 Zhang Lei
15
Business extension
Driveline Systems
From Driveshafts to
Driveline Systems
16
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
Complete Range of Driveline Products
CVJ Systems
Constant velocity shafts (7.5m carsets in 2013)
Precision forgings (18m pieces in 2013)
AWD Systems
Propshafts ( 800k pcs/yr)
Trans Axle Solutions
Power Transfer Unit ( 20k sets/yr)
Final Drive Unit ( 20k sets/yr)
Differential Assemblies (1.2m pcs/yr)
18
AWD Production in SDS
Launch of Mitsubishi
ASX PTU
Launch of GAC PTU
AWD PTU, RDM and Propshaft
localisation for European customer
SOP 2015
2010
2012
2014
2015
2016
Launch of PTU and RDM for
additional European and US
customers
Launch of Ssang Yong
C200 PTU
Engineer and supply
the full AWD system
for Chinese customer
SOP Jan, 2015
19
Customers
20
SDS Growth
1000
100
Premium propshaft output高端虎克轴产出
900
800
Sideshaft output 等速轴产出
700
Propshaft output 虎克产出
90
2013 sales
6.3 bil yuan
YOY 18%
Sales revenue 销售额
80
70
600
60
500
50
400
40
300
30
200
20
100
10
0
0
1989
1994
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013 2014F
 Sales grew from 30mil yuan in 1989 to 6.3bil yuan in 2013
 Sideshaft production increased from 2,900 c/s in1989 to over 7.5mil c/s in 2013
 Propshaft production increased from 78.5k units in1989 to 721k units in 2013
21
Technical Center
Headcount: 300 (8 expats) 2018 plan
With all around functions incl. R&D, testing and
validation
To be developed with initial R&D capability and
be industry leading
荣获国家高新技术企业认可
National Hi-tech Enterprise certification
获得GKN等速传动轴试验室体系认证
GKN Driveline’s Certification for Testing System
22
Engineering & Test Capability
Design & Analysis
Testing
CAD&CAE:
Pro-E、 Catia、 UG、Autocad 、Nastran、
Adams
NVH
23
Lean Enterprise Deployment
24
Recent Awards
No
Awards
1
2012 World
Excellence Award
FORD
2
2013 Service
Golden Award
SVW
3
2013 Best
Supplier Award
SGM
4
2013 Excellent
Supplier
GZ FIAT
5
2013 Excellent
Supplier
CMA
6
2013 Excellent
Supplier
Geely
7
2013 Excellent
Development
Award
SAIC
China Customer
Satisfaction
Company
China Quality Association
8
From Who
1
2
3
4
5
6
7
8
25
秉承精益，追求卓越，
成为国际一流的传动系统供应商
We aim to be an international best-in-class driveline
company, continually improving to Excellence
26
GKN China
客户Customers
市场占有率超过45%
Over 45% market share
27
GKN China
GKN Aerospace in China
GKN China
Is it happening?
Aircraft orders
403 Aircraft orders placed from May to Sep 2014.
COMAC progress
ARJ plan for CAAC certification by the end of 2014.
C919 Forward and Mid Fuselage delivered to
Pudong FAL.
C919 Nose section assembly arrived at Pudong
FAL.
C919 Centre Wing Box was completed.
C919 HTP assembly started.
COMAC and Russian UAC (United Aircraft
Corporation) signed a MoU to develop a Wide-Body,
Long Range aircraft.
Airbus latest
Cabin completion centre for the A330 jets.
GKN China
The Market
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.
The view from the cockpit.
GKN China
Xi told COMAC officials last month that the country 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," he said during a visit to the company.
"More importantly, it is a symbol of a country's overall strength and power. A large
airplane is the dream of several generations of Chinese.“
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 China
Powder Metallurgy
•
Two plants in China Jiangsu Province plus
powder mixing facility:
• Danyang – Plant Powder Facility.
• Yizheng Plant.
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.
GKN China
GKN in China – Lessons Learned
Do not underestimate cultural differences.
Differences in speed of decision making can create conflicts – both
ways!
Do not expect global standards in financial reporting/control
immediately.
Development and retention of local key talent must be a top priority.
Properly resource the growth plan.
GKN China
But … there will be surprises!
GKN China
谢谢
Thank You