Visteon: the way forward in
China
Cliff Dawson, Director Asia Operations
Copyright 2004, Visteon Corporation
Agenda
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Visteon Overview
Key relationships in China
The joint venture success model
The China slowdown – impacts and
responses from suppliers
• Questions
Copyright 2004, Visteon Corporation
Visteon Corporation
• $18.7 billion diversified
manufacturer of
automotive components
and systems
• Capable of supplying
approx 40% of a vehicle’s
material value
• Approximately 72,000
employees, on 6
continents, in 25 countries
• Business with nearly every
global automaker
Copyright 2004, Visteon Corporation
Product Lines
Copyright 2004, Visteon Corporation
Visteon Asia Pacific Facts
• Been in the region for
more than a decade
• 12,000 employees
• 34 facilities
– Includes technical,
manufacturing, sales
and service centers
• 7 key partners
• Well positioned with key
customers
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Visteon AP Operations
Yanfeng
Visteon Beijing
Interior Systems
Interiors
Compressor
HCC Dalian
HVAC
Visteon Climate
Control Beijing
Al.. Radiators
Visteon JV
Visteon 100%
Products
A/C Systems, Compressors,
Radiators, Condensors,
Heater Cores, Evaporators,
Air Handling Assy. Fan &
Shroud Assembly
UARCO
Changchun
HCC Korea
Pyongtaek,
Taejon, Ulsan
Duck Yang Group
IP, Cockpit Module
Ulsan, Yesan, Asan
JCS
Hiroshima
Interiors
Yanfeng Visteon
Automotive Trim System Co., Ltd
Chongqing
Powertrain Cooling,
HVAC, Heat Exch.
Visteon
Electronics
Hiroshima
Visteon Engine Control
Systems Chongqing
Yanfeng Visteon
Shanghai
CSIL
Bhiwadi
Radiator
Exterior/
Interiors Plastics
IP, Cluster,
Trim Parts
ABS, Airbag
RKE, GEM
IP, Seat, Door
Panel Trim,
Bumpers
Visteon Electronic
Shanghai
VASI
Pune
A/C Systems, A/C Hoses,
Plastics (IP, Clusters,
Bumpers)
Starter, Alternator
A/C Systems, Condensers,
Evaporators, Heater Cores,
Controls, HVAC Assy.
GEM, Clock,
Amplifiers, SWAM,
Cluster
VASI
Chennai
VPCSI
Chennai
VTL Thailand
Rayong
Yanfeng Key
Safety Systems
HCC Thailand
Rayong
A/C Systems
Condensers
Al. Radiators, Controls,
Evaporators, Heater
Cores, HVAC Assy.
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Dongfeng Visteon
Wuhan, Guangzhou,
Shiyan
Jiangxi Fuchang
Nanchang
Al. A/C Hoses
A/C Systems
Interior, Exterior Trim
Visteon Philippines
Santa Rosa
Fuel Rail, FDM,
Throttle Body
S/W, Airbag, Side
Airbag, Seatbelt
Visteon in China
Changchun
1 UARCO (FAW-VW; FAW)
Aluminum Radiators/Heater Cores
Beijing
Climate Control
Interior/Exterior
2 Visteon Climate Control Beijing (Hyundai)
Electronics
3 Yanfeng Visteon Beijing (Beijing Hyundai, Beijing Jeep,
HVAC, Engine Cooling, Heat Exch.Components
Beijing Futian)
Interior systems and components
Powertrain
Chongqing
4 Yanfeng Visteon Chongqing. (Changan Ford)
IP, Cockpit Assy, Bumper, Door Panel
Changchun
Beijing
7 Shenyang
13 Dalian
2 3
7
Shiyan
6
Chongqing
45 8
8
Yantai
Xuzhou
Wuhan
7
6
12
8
1 8
5 Visteon Powertrain Chongqing (Changan, Changan Ford)
Air Intake Systems, Powertrain Controls
Wuhan/Shiyan/Guangzhou
6 Dongfeng Visteon (PSA, Nissan, Honda)
Interior systems and components, Exterior Trim
Shanghai
7 Yanfeng Visteon (SVW, SGM, SAIC, Chery, Other OEMs)
Shanghai
7 8 9 10 11
8 Shaoxing
Nanchang
Shenzhen
Note: Does not include operations of Yanfeng Visteon JVs with
JCI (Seat Systems) and Key (Safety Systems)
IP, Seats, Door Panels, Consoles, Bumpers, Int/Ext Trim
8 Yanfeng Visteon Electronics
(Ford, Mazda, SGM, SVW, Fiat, Other OEMs)
GEM, Clock, Cluster, Radios, Amplifiers, KES
9 Visteon Asia Pacific Corporate Office
10 China Technical Center
11 China Commodity Sourcing Office
Nanchang
12 Jiangxi Fuchang Climate System (Jiangling Motors)
A/C Hoses & A/C Systems Assy
Dalian
13 Visteon Climate China (Hyundai, Ford)
Compressors
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Key Relationships in China
• Halla Climate Control
• Beijing Automotive Industry Corporation
(BAIC)
• Shanghai Automotive Industry Corporation
(SAIC)
Copyright 2004, Visteon Corporation
Formula for JV Success:
Two strong partners with an equal stake in the
success of the business
Visteon
Advantages
SAIC
Advantages
Technology and advanced
management processes
Market and local
knowledge/capabilities
One YFV Team
“One Platform” Cooperation Strategy
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“One Platform” Advantages
SAIC:
• Support SAIC’s systems-oriented business consolidation strategy
• Accelerate development of Yanfeng Visteon Technical Center
capabilities to support SAIC’s future development
Visteon:
• Leverage the resources and capabilities of Yanfeng Visteon in
Shanghai to support growth of business with Visteon’s global OEM
customers throughout China
– Human Resources
– Manufacturing / Technical Capabilities
– Financial Resources
• Integrate the majority of Visteon’s China business under a single
management structure with a coordinated strategy
Copyright 2004, Visteon Corporation
China Technical Center
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Will serve as regional engineering
hub for electronics and interiors
Scheduled for completion last quarter
2005
Will include Visteon and Yanfeng
Visteon engineering staff
Will house prototyping and lab
facilities to support interiors and
electronics
Development of products for global
and regional consumption
China Technical Center
Copyright 2004, Visteon Corporation
China’s Auto Market Slowdown
Golden period 2001 – 2004
- substantial year on year growth
- opportunities for OEMs and Suppliers
- hungry market
• Companies setting up in this period had growth plans based on
recent history
•Overcapacity begins to impact the market
• Controls on the economy applied in 2004 compound the
situation
Copyright 2004, Visteon Corporation
China’s Auto Market Slowdown
• Result has been market “normalization”
• China begins to “feel like” the more established automotive
markets of the world
• China will continue to be a positive market in which to operate
• Normalization of the China market will require more
sophisticated responses from suppliers
Copyright 2004, Visteon Corporation
China’s Auto Market Slowdown
• What are the appropriate responses to “normalization”
• Strengthen partnerships developed in China
• Broaden scope of established partnerships
• Begin to rapidly apply established techniques
– Supply chain management
– Lean manufacturing
– Local and regional sourcing
• Look to build local capability
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Design capability
Engineering and Development
Sourcing and supplier management
Program management
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China’s Auto Market Slowdown
• Essential but difficult
• Greater autonomy and flexibility is needed
• Quality and cost are the most dominant factors for successful
suppliers
Copyright 2004, Visteon Corporation
Summary: the way forward for suppliers
• China remains the most exciting market to be in despite is
slowdown and rapid change
• Partnerships are the key to long term success
• The “normalizing of the market” requires suppliers to provide
appropriate responses to maintaining a strong position in the
automotive supply base
Copyright 2004, Visteon Corporation
Questions?
Copyright 2004, Visteon Corporation