GKN China GKN in China Investor Visit SDS, 30th June, 2010 GKN China GKN: leadership in four specialist, global sectors Automotive Driveline Powder Metallurgy Land Systems Aerospace GKN China GKN in China Today SDS ChangChun from 2011 Emitec Beijing Office VW FAW ChangChun BMW Huyndai Brilliance Toyota Mazda Hoeganaes Danyang Danyang BJ Auto Beijing GKN Z Hoeganaes Chrysler Mengzhou Sinter Mercedes Nissan GDC ChangAn Ford/Suzuki ChongQing DongFeng WuHan Honda WOFE JV 10 plants, 3800 employees 2009 Sales RMB3bil / $450mil Kia Shanghai Office LZGM SVW Chery Shanghai SAIC GKN CHINA HOLDING Shanghai Geely Citroen/Peugeot SDS SGM Shanghai 3 Plants SDS Wuhan Toyota GZ Auto GuangZhou Wheels Liuzhou Honda TSH Shanghai Off Highway Shanghai Office GKN China GKN China Automotive GKN China China Passenger Vehicle Sales 2010 China PVlargest 2009/2010automotive Monthly Sales market Comparative China now the in Table the world! Vehicle (10K) 140 120 100 80 60 40 20 0 Jan Feb Mar Sedan Apr May Mini Bus June July SUV Aug MPV Sep Oct Nov Dec 2009 Total Market expected to slow down in H2, 10-15% annual growth forecasted in 2010 Data Source: National Passenger Vehicle Information Exchange Association Association GKN China Top 10 Best-Selling Models - May 2010 China Top 10 Best Seller PV Brand May 2010 Vehicle 100000 Sales Production 86,42786,427 80000 60000 40000 34,491 34,491 27,172 23,995 20000 19,870 19,807 19,83920,512 18,158 19,676 17,236 17,389 15,54415,827 14,524 15,402 13,409 14,023 0 SGMW CHANGAN Wuling Sunshine Star BYD F3 SVW Lavida B-HYUNDAI Yuedong SGM Excelle FAW VW Jetta FAW VW Bora SGM Cruze Small cars and domestic brands gaining market share! Data Source: National Passenger Vehicle Information Exchange Association Association FAW Xiali GKN China Shanghai GKN Drive Shaft (SDS) Established 1988 Location Shanghai Zhou Pu plant, Kang Qiao plant, Shen Jiang plant Shareholders GKN 50% SAIC 35%, BOCOM 5%, SDIC 10% Products Constant Velocity Joints, IC Shafts, Propshafts, Forgings Main Customers SVW, FAW, SGM, Citroen, Honda, Nissan, Ford, Fiat, Toyota, Kia, BMW, MB, Chinese OEM’s GKN China GKN Chongqing Driveshaft (GDC) Established 2006 Location Chong Qing Shareholders SDS 51%, CSG 40%, GKN 9% Products Constant Velocity Joints Main Customers Chang An, CA Ford Mazda, CA Suzuki, BYD, JMC, Wuling, FAW-Hongta, GKN China SDS Wuhan Plant Established 2009 Location Wuhan Shareholders SDS 100% Products Constant Velocity Joints Main Customers Dongfeng, Nissan, PSA, Honda GKN China SDS Changchun Plant Established SOP May 2011 Location Changchun Shareholders SDS 100% Products Constant Velocity Joints Main Customers FAW, Toyota, Brilliance Ground-breaking May 28, 2010 10 GKN China GKN Driveline Torque Shanghai (TSH) Established 2006 Location Shanghai Kang Qiao Shareholders GKN 100% Products Differentials, PTU’s, FDU’s, Torque management devices, eDrive products Main Customers GM, SGM, Nissan, JAC, Chery, SsangYong Differentials for Transmissions and Axles Limited Slip and Locking Differentials AWD/4WD Couplings Power Transfer Units Final Drive Units GKN China GKN Driveline China Growth Plan SDS Changchun Plant (2011) Market expected to grow at 8-10% per annum Doubling CV shaft capacity to 6mio car-sets Hafei Expanding differential capacity to 1.3mio units FAW Mazda Expanding PTU capacity to 50k units Hyundai BJ Auto Chrysler SDS Wuhan Plant Ford Suzuki ChangChun Toyota BMW Brilliance Beijing Nissan Mercedes LZ-GM JAC DF Honda SDS Shanghai Technical Centre SVW Shanghai SAIC Wuhan Chery ChangAn Citroen/ Peugeot Chongqing GDC Chongqing Plant FAW GZ Toyota Guangzhou Renault Nissan BYD GZ Honda SGM Geely SDS Shanghai Plants TSH Shanghai Plant GKN China SDS Shanghai Technical Centre GKN Driveline’s Technical Centre in Shanghai possesses best-in-class design and testing capabilities enabling the performance of full Driveline Systems to be validated under the most demanding inservice conditions. •State of the art design and test capabilities •Application centre for driveline products •Development centre for domestic products •Expanding to full driveline system capability 13 GKN China New Technology Plan for China CVJ ; Full range of products, introducing latest technology Propshafts; Localizing high speed CVJ technology, tube and welding Geared products; Launching first PTU in July 2010 IC shafts; Localizing MTS and laser welding processes eDrive; Establishing local competence for HEV and EV 14 GKN China GKN Driveline China Growth - Summary Manufacture full CVJ product portfolio, expand footprint Develop low cost shaft range for domestic customers Grow in premium propshaft segment with rapidly growing AWD market and localization of imported products Establish leading position with Power Take off Units and Torque Management products in rapidly growing AWD segment Establish leading position in eAWD units for hybrid vehicles and EV transmissions GKN China GKN Zhongyuan Cylinder-liner (GKNZ) Established 2005 Location Mengzhou City, Henan Province Shareholders GKN 59%, ZYNP 41% Products Heavy Duty Diesel Engine Cylinder Liners Main Customers Cummins, Volvo, Scania, CAT, Wuxi GKN China GKN China - Powder Metallurgy GKN China China Powder Metallurgy Market Growth China - PM Market Growth Forecast Tons, thousands 250 Non-premium quality market Premium quality market 200 131 128 120 150 111 98 83 100 50 74 83 2010 2011 93 104 113 2013 2014 124 0 2012 2015 18 GKN China GKN Sinter Metals China - Danyang Established 1995 Location Danyang, Jiangsu Shareholders GKN 100 % Products PM parts for automotive engines and transmissions Main Customers INA, GFT, SGM, Chery, Jatco VVT components Synchronizer hubs Carriers GKN China GKN Sinter Metals China Targeting premium automotive power-train applications Engine: Transmission: GKN China GKN PM China Growth - Summary Sinter Metals China focusing on power-train applications Danyang capacity filling up with additional volume and new programs Investing in plant expansion and additional equipment for further growth Hoeganaes setting up service centre and powder mixing facility in Danyang to capture China PM growth Focus on premium powder market, expected to start commercial shipments from DY facility by Q3 2010 GKN China GKN China - Land Systems GKN China China Construction Equipment Industry China: Development of Sales, 2000-2014* (Units ) 320,000 270,000 Annual Average 2010-2014 : 283,409 Annual Average 2005-2009 : 208,908 220,000 170,000 120,000 70,000 20,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011* 2012* 2013* 2014* *Forecast Source: OffHighway Research GKN China GKN Wheels Liuzhou Co.,Ltd Established: 2006 Acquisition from Liugong Group Location: Liuzhou, Guangxi Shareholders: GKN 100% Products: Wheels for construction machinery, agricultural machinery, harbour machinery, fork lift trucks, trucks, cars, other special machinery Main Customers Liugong, Liuqi, Liute, SGMW, Noell, Zhenhua GKN China Wheels Liuzhou – A Successful Transformation 25 GKN China Land Systems China - Wheels Good position established to further exploit Construction and Large Mining Wheels from Liuzhou Opportunity to enter and grow share of Agriculture and specialised wheel market ( e.g Harbour Crane) Ag market located predominantly in the North, Northern facility required to exploit successfully 26 GKN China Land Systems in China – New Markets Early days, just started Initial focus on High Speed Rail and Wind Turbines Now investigating supply chain and potential partners GKN China China High-speed Railway Market Definition: any commercial train service in China with an average speed of 200km per hour or higher Routes in service: 6,552km – No.1 in the world (including 3,676km of rail lines with top speeds of 350km/h and 2,876km with speeds up to 250km/h) New constructed routes: 18,000km by 2020 Upgrades on existing routes: 25,000km by 2020 Planed total network: 50,000km by 2020 Total investment: RMB2 trillion ($300 billion) Source: Wikipedia website & online news GKN China China Wind Power Market China aims to boost total wind-generated power to 100 GW by 2020 with investments possibly worth more than $150 billion GKN China GKN China - Aerospace GKN China China Civil Aircraft Fleet Increase 6000 5,055 5,029 5000 4,531 4000 3000 1,134 1,259 1,411 2000 1000 443 485 998 863 754 523 510 527 566 602 664 0 F*: Forecast Source: AVIC website and AvBuyer website GKN China COMAC C919 Aircraft Program Milestones: First flight in 2014, enter service in 2016 COMAC aims to sell over 2,000 C919 jetliners within the next 20 years and expects 100 C919 jetliners would be ordered in 2010. GKN China GKN Aerospace in China Subcontracting of engine nacelle components for Honeywell 7500 to Hafei Aviation Several visits of COMAC execs to GKN’s Filton facility confirming interest in GKN’s composite aero-structure technology for C919 GKN Aerospace now investigating market entry strategies GKN China GKN in China - Summary The first Western automotive supplier to invest in China in 1988 More than 20 years experience in China with wholly owned businesses and JV’s with various Chinese partners Leading market positions in automotive and off-highway Committed to growth with localized product range and development capabilities, fully integrated in GKN’s global network Investment plans in place to double in size through organic growth in the next 5 years Exploring opportunities for new partnerships in Land Systems and possibly Aerospace GKN China GKN Sponsorship of UK Pavilion at Shanghai World Expo 2010 吉凯恩为2010世博 会英国馆赞助商 Thank you! 谢谢! 35 Shanghai GKN Drive Shaft June 2010 上海纳铁福 SDS Shareholders Chinese Shareholders: • SAIC HASCO- HUAYU Automotive Systems Co., Ltd. • SDIC HTIC- SDIC High Tech Investment Co., Ltd • BOCOM- Bank of Communications Co. Ltd Shanghai Branch 35% HASCO 50% GKN Foreign Shareholders: • GKN- GKN Driveline International GmbH 10% SDIC 上海纳铁福 5% BOCOM Operations GKN Driveline Chongqing - GDC (JV with China South Group) Wu Han Plant Chang Chun Plant (under construction) 上海纳铁福 Total headcount: 2700 Land Area : 319,503 sqm KQ plant: 83,986 sqm ZP plant: 49,540 sqm SJ plant: 53,966 sqm WH plant: 44,035 sqm CC plant: 52,146 sqm (under construction) GDC plant: 35,830 sqm Shanghai Shen Jiang Plant Shanghai Kang Qiao Plant Shanghai Zhou Pu Plant SDS Organization Chart Management Office (MO) Managing Director Xue Jin Da Deputy GM Technical Director Deputy GM Commercial Director Deputy GM Operation Director Uwe Paksa Gu Xiao Feng Ye Lian Xiang Technical Centre LGS / ISIT CVO Quality Assurance Purchasing Wu Han Plant Planning Finance Personnel Administration Management 上海纳铁福 Marketing & Sales GDC PSO Shen Jiang Plant Company Culture Vision We aim to be an international best-in-class driveline company, continually improving to achieve excellence. We will create value for our customers, partners and shareholders. Mission We will play our part in building a harmonious society. We will build a platform for employee development and value realization. Value Spirit 上海纳铁福 Integrity Cooperation Perfection Innovation Lean Pragmatic Precise Capable 2.00_31 Driveline System Transfer Case Propshaft Rear Axle Sideshaft TMD TMD Front Axle CVJ - Sideshafts 上海纳铁福 Sideshaft CVJ - Propshafts Shanghai GKN – Customers 上海纳铁福 Engineering & Test Capability SDS Technical Centre has state of the art design and test capabilities meeting GKN’s global standards - Functional test Torsional fatigue test Four Square Life test Static Torsion test Quasi-static Torsion test NVH 上海纳铁福 - Boot High Temp. test Boot Low Temp. test Muddy Bath test Sealing test Critical Speed test Boot deformation Lean Enterprise Overview Our vision for Lean is to create a culture of continuous improvement in all we do, by having a common approach to improving our Business & Production processes Business Process Excellence is an approach to seeing waste, removing waste and sustaining improvement throughout the entire value chain Production Excellence is an approach to seeing waste, removing waste and sustaining improvements in the production processes and associated activities. People Excellence is a commitment to unlock the talents of people to create a culture where continuous improvement is inherent in “the way that we do things” Business Excellence prioritises & aligns the activities and assesses the overall “health” of the business 上海纳铁福 Lean Enterprise The SSC (site steering committee) is a team led by top management driving all LE activities in the company Lean Enterprise Business Excellence Production Excellence Business Process Excellence People Excellence Lean Management Lean Production 5S Localization Pilot cells 上海纳铁福 Careful planning Lean Investment Fine Cost Earnest Marketing Lean Enterprise Deployment Shop floor Overview 5S- simplify FIFO inventory Plant manager audit Assy. Cell Cell info corner 上海纳铁福 Shift start-up meeting Visual display Training corner Cell scoring VSM workshop Kaizen Quality System ISO9001 ISO/TS16949 (2009) ISO14001 Ford Q1 上海纳铁福 2009 Customer Awards 上海大众年度最佳综合表现金奖 Gold Medal of Annual Best Supplier of Shanghai VW 上海大众25周年特别贡献奖 25th-Anniversary Special Contribution Awards of Shanghai VW 上海通用产品和服务质量攻关奖 Quality Product and Service Award of Shanghai GM 上海汽车优秀供应商 Excellent Supplier of SAIC 一汽集团优秀供应商 Excellent Supplier of FAW Group 一汽轿车优秀供应商 Excellent Supplier of FAW Car 一汽-大众备件供应商评比最佳合作奖 Best Collaborated Spare Parts Supplier of FAW-VW 东风本田优秀供应商 Excellent Supplier of DongFeng Honda 神龙汽车优秀供应商 Excellent Supplier of Dongfeng Peugeot Citroen Auto (DPCA) 江铃汽车优秀供应商 Excellent Supplier of Jiangling Motors (JMC) 华晨汽车年度质量管理奖 Annual Quality Management Award of Brilliance Auto 四川一汽丰田品质达成奖 Quality Achievement Award of Sichuan FAW Toyota Motor 上海纳铁福 Summary Shanghai GKN is • the first auto component JV in China • strong technology support from GKN • market development support from SAIC • balanced management team • one of the most successful JVs in China • sustainable growth • good payback to shareholders • sound partnership between shareholders 上海纳铁福 Summary Shanghai GKN is • the driveline market leader in China • strong customer relationships • excellent reputation for quality products • strong local engineering support • the largest GKN driveshaft manufacturer in Asia Pacific • • • • 上海纳铁福 CV shaft output: 6.22m pcs propshaft output: 526k pcs forgings: 10.93m pcs (The above figures reflect 2009 results)