GKN China
GKN China
Andrew Moss
November 2014
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.
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
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
1995
1990
1989
第一根桑塔纳CKD传动轴
总成下线
Output of 1st Santana
CKD Driveshaft
2001
工程中心落成
Formation of
Eng. Center
2000
1996
康桥工厂落成
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
长春工厂建成
Formation of
Changchun Plant
2010
2008
申江工厂建成
Formation of
Shenjiang Plant
2009
技术中心建立
Formation of Tech
Center
武汉工厂建成
Formation of Wuhan
Plant
25 Years’ Joint Venture 1988-2013
2013
2013
武汉二厂建成
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
企业布局Footprint
总人数：4400
上海
Headcount: 4400
SHANGHAI
总产能：500万车套等速传动轴; 80万套虎克传动轴
Total capacity: 5m c/s Sideshaft & 800K units Propshaft
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
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
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
客户Customers
市场占有率超过45%
Over 45% market share
17
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