An IMAP INDUSTRIALS Report

Automotive and Components Global Report — 2010

From Detroit to Beijin
and all points in betw een

g

IMAP M&A advisors co

nnect the automotive

industry around the w orld

Automotive parts remanufacturer

Remaco Group, LLC
United States
Acquired the shares of

Roll former of metal parts

Modineer

United States
Acquired the assets of

MD Rebuilt Parts Detzen GmbH
Automotive parts remanufacturer

Automotive roll former

Wagon Wixom

Germany

United States

You put the vehicles on the road. That’s your business. And it’s our business to ensure that when your company needs to expand,invest, divest or restructure, the way is paved for you.
IMAP KNOWS HOW TO GET THE DEAL DONE.

ADVISED THE SELLER

ADVISED THE SELLER

These recent closings demonstrate our reach and expertise in the automotive industry.

Antolin Group Automotive
Automotive Tier 1 supplier

Wild Manufacturing Group, Ltd.
High-precision automotive engineering company

Automotive metal fabrication and supplier

Revstone

Spain
Acquired shares in

United States
Acquired the shares of

United Kingdom
Acquired the shares of Press parts manufacturer for the automotive industry

Automotive interior trimming components manufacturer

Gong Zhu Lin Automotive Components Co., Ltd.

Undisclosed Seller

China

Hungary

Automotive tool supplier

Talhin/T Plastics Corp

Canada

ADVISED THE BUYER

ADVISED THE SELLER

ADVISED THE SELLER

.............................................. Left: Peugeot is working with Mitsubishi to develop its own version of the i-MiEV electric car...........................2010: Page 3 ............................. is a Delaware corporation.................. C-i H O T Topic: Lithium Ion Batteries .............. 9 Overall Outlook ..............Contents (Click to Navigate) Automotive Global Overview ....................................................html IMAP’s Automotive and Components Global Report ....... locations and other similar associations should not imply any form of IMAP ownership or agency over the local firms or cause any liability between the local firms and IMAP whatsoever................... 4 M&A Activities in the Automotive Sector ..................................indiaautomotive................. 8 An IMAP INDUSTRIALS Report IMAP................ and total power output of 47kW (64bhp) and 180Nm of torque. 9 Statistical Reference (Appendices) Leading Global Players ....... 7 Remanufactured Products ...........1 1 Source: http://www... 5 Trends and Expected Growth Areas ................................................ The four-seater iOn will launch in Europe by the end of 2010................net/2009/09/ peugeot-ion-electric-car-to-be-launched......... Its regional firms are independently operating in various jurisdictions under a variety of legal forms of organization............................................................... A-i M&A Metrics ................................................................................................................................ the iOn will have a range of 130km...................... References to IMAP transactions..................... Inc.. offices...... Fitted with lithium-ion batteries.......... 7 Governments’ Role ..... 6 Low Cost Cars ......................................... B-i Growth Fundamentals ......... 6 Hybrid Vehicles .....................................................................................................

3 percent globally in 2007.0 markets. In addition to Asia.0 which has always been a forerun597.100 900 700 500 In Asia. China doubled its automobile production. East European 3 Global Auto Report – Scotiabank Group dated July 31. below Source: Datamonitor.4 110. there has been a shift in dominance to Asia-Pacific.7 560. As a result.0 577. Shift in dominance With the US reeling under the economic slowdown.907. please refer to Statistimotors intends to reduce investcal Reference. The auto manufacturing industry. whereas the US saw its production decline by 50 percent.784. 2008 30.3 billion USD).3 95.70% 6. The industry shrunk as demand declined and contracted by almost 18 percent during the first half of 2009.3 million in 2008) compared Global Automotive Industry to Japan’s 4. and-market/ China has been the front runner in the auto market’s recovery. recording a year-over-year growth of 48 percent in June 2009 with 7 million units. ments by 200 billion yen (2. value (USD mn) Auto components prodn. China surpassed Japan with a vehicle production of 7. Similarly.0 ner in expansion in international 75. Honda 1 For detailed sub-segment breakup. electrical parts. and others1) has contracted significantly. Toyota Motors. including auto manufacturing and auto component manufacturing (comprising engine parts.9 85.7 percent by the US.info/2009/08/18/china-socialismUSD) and Mazda Motors plans to keep consumer-behavior-the-worlds-biggest-automobile-makerit at 30 billion yen (337 million USD). This leadership shift has been mainly attributed to increased government emphasis on developing infrastructure and providing subsidies to Chinese automobile manufacturers.1 90. IMAP 1 trillion yen for the first time in six years.5 mil2.1 million (11. were punished under the pressure of the slowdown — GM and Chrysler collapsed. with a market share of 35.500 1.. sharply above the 5. Global Market Share By Region.845. equipment. automobile components saw a CAGR of a mere 1.2 1.900 1.2 616.9 million vehicles against GM’s 8.9 625.839.80% 26.2010: Page 4 .1 automakers have restricted 1.1 105.Economic deceleration slowed the auto industry Exacerbated by the economic slowdown.0 lowing earnings deterioration on 85. Similarly.203. IMAP 2.0 98.70% 35.100 1. (mn) (RHS) lion yen (9.52 percent during the same period. filed for Chapter 11 bankruptcy. drive transmission and steering parts. has decided to reduce 2004 2005 2006 2007 2008 Auto prodn.300 1.9 million unit peak reached during March 2008 prior to the global economic slowdown. and are now in the process of restructuring. 80. which represented 51.8 percent of the US market and 18. Japanese 100.5 80. A cut in retail taxes and increased vehicle subsidies in rural areas in China led to a 38 percent year-over-year rise in vehicle assemblies in June 2009. Toyota and Nissan are fast gaining market share. Toyota surpassed GM as the largest manufacturer of cars in 2008.0 lion in 2008) for the year ended 1. 2009 IMAP’s Automotive and Components Global Report . manufacturing 8.0 July 2009. As a result. the global automotive sector. which has always been a major driver of economic growth with 30 percent growth and creating nearly 60 million jobs worldwide between 1995 and 2005.0 a global scale. value (USD mn) capital investments to 830 bilAuto Prodn. Vol.80% Asia -Pacific Americas Europe Rest of the World Source: Datamonitor.2 billion 2 Source: http://designative.2 The three big players in the US (GM.700 1. which is fast emerging as the next automobile production hub.0 capital investment for 2009 fol92.8 percent in value in 2008 compared to 30. and Chrysler). Ford. witnessed a severe fall in total revenues with a compound annual growth (CAGR) of –0.8 104.3 From 2003 to 2008.75 percent between 2004 and 2008.3 million. suspension and braking parts.5 1.9 million (9.

9% 12. 1 Only M&A deals have been considered. 30. are shifting their manufacturing base to Eastern Europe rather than importing them to avoid tariffs.5 183.1 Value (USD mn) 1. a majority of automobile component production activities are concentrated in Japan.0 236. Similarly. 2 YTD  As of Sept. companies like Johnson Controls are increasing their focus on emerging markets such as India and China. 2008 62. This was mainly due to the better position of Asian countries than Western ones amid the current economic slowdown.. year-to-date transaction value in the automotive sector was only USD 2.8 Source: Capital IQ.6 283.9 percent in terms of value while the US and Europe held only 9.0 Value (USD mn 2.1 6. M&A declines. India and Thailand due to the availability of cheap raw materials and increasing demand for automotive products from the domestic market.0 200. IMAP IMAP’s Automotive and Components Global Report .2010: Page 5 .1% 8.890. valued at USD 1.7 184. which sell their automobiles in Western European countries. China.166. Through the end of September 2009. whereas 2009’s largest deal. Private placements. Czech Republic and Hungary are becoming favored manufacturing destinations.8 billion with 195 deals during all of 2008.8% Toyota Motor Corporation Daimler AG Others General Motors Corporation Ford Motor Company Source: Datamonitor.8% 8.7 percent. These countries have attracted huge foreign direct investment (FDI) in the recent past due to their close proximity to Western Europe.6% Value (USD million) 1. respectively.5 82. public offerings.6 78. IMAP countries such as Poland. 2009 M&A Activities at a Glance 2008 Transaction Value (USD millions) Top 5 deals Segment Auto components Automobile manufacturing Top 5 regions Asia Europe Latin America US/Canada Others Top 5 countries South Korea United States Russia Brazil China 44. and share buybacks have been excluded.581.8 billion took place in the German automobile space between Schaeffler KG and Continental.9 billion.6 123. the largest deal worth USD 31. was in Asia between Hyundai Motors and Hyundai Mobis in South Korea. compared to USD 44.1 Asia accounted for the highest M&A activities with 74. including Korean car makers such as Hyundai. comprising 44 deals.2 250.8 percent and 8. In 2008.6 1.07 billion. As a result. shifts to Asia The global slowdown also led to a decrease in M&A activities in 2009 with the focus shifting to Asia.4% 7.309.806.799.Global Market Share By Company. Some Asian companies.7% # of deals 34 10 # of deals 15 11 3 14 1 # of deals 3 12 2 2 5 2009 YTD2 2. low labor costs and skilled workforce.

0 85. Demand from India and China is expected to go up.0 135.700 1.0 95.219. The German Association of the Automotive Industry (VDA) predicts that vehicle sales will drop to 2. improving infrastructure. engine capacity.2 The European Union should be the main demand generator for these vehicles with other developed and emerging economies following suit.6 145.0 75.6 million units in 2010 from 3.9 102. which is around 23 times the market size in 2008.500 1. The global market for hybrid vehicles is predicted to increase to more than 11 million a year by 2020. demand from developed economies such as the US and Germany is expected to remain stagnant as this market is already saturated in terms of high penetration and increasing unemploy– ment.html 2 http://www.1 The number of models is expected to increase from the current base of 19 models in 2009 to 150 by 2014 and 200 by 2019.azom.5 117. Additionally.3 2. IMAP Hybrid vehicles are next growth area Hybrid vehicles are expected to witness strong growth supported by environmental legislations by various governments on the use of cleaner and fuel efficient cars.6 108. (mn) (RHS) 1. the UK. and Luxembourg use CO2 emissions as the only factor for car taxation.0 105.049. and CO2 emissions. driven by rising population.com/Articles/2009/07/13/ 9231220/lithium-producers-set-to-benefitfrom-growth-in-hybrid-autos..2010: Page 6 .002.29 percent between 2008 and 2013. the global auto industry in terms of value is expected to pick up driven by renewed demand — automobile production is expected to expand globally at a CAGR of 2.0 115. and the Middle East.Automotive sector expected to grow in 2010 With the economy showing signs of revival. Vol.9 135.7 2. and lower impact of the global slowdown. whereas other countries apply a combination of factors. increasing per capita income.982.300 1.icis.9 617. Future Outlook of Global Automotive Industry 2.2 631.0 611.5 million estimated for 2009. France.0 Auto components value (USD mn) Source: Datamonitor estimates.100 1. auto-ownership penetration in these countries is much lower than in developed countries. value (USD mn) Auto prodn.2 641. manufacturing is likely to be concentrated in Eastern Europe due to its close proximity to Western European nations. Due to environmental concerns.100 900 700 500 2009e 2010e 2011e 2012e 2013e Auto prodn. While demand is expected to be led by China.5 125.5 percent and auto components at 0. 1 http://www.8 2.000 in China and 8/1.000 people compared to just 40/1. all Western European countries levy some form of CO2 tax on passenger cars. indicating a huge potential (the US has a large penetration of 765 vehicles per 1.900 1.000 in India). The majority of growth in the global automobile industry is expected to come from Asia Pacific (mainly China and India) and the Middle East with demand remaining flat in the mature US and European markets.4 2.135.com/news. On the negative side. India.asp?newsID=19069 IMAP’s Automotive and Components Global Report .0 127. including car price.4 623.

outsourcing of motor components is expected to see an upsurge due to the increase in demand for hybrid vehicles and continuous decrease in prices of these automobiles. due to the limited volume of hybrid vehicles and absence of standardized technology across various companies. Moreover. remanufacturing regulations are expected to be tightened in the future to promote sustainable manufacturing.asp Similarly. In the US itself.. With the emphasis on higher economic contribution per unit of product manufactured. 2 Economic and Environmental Assessment of Remanufacturing in the Automotive Industry . with the aunch of Nano. Semih Severengiz. a green tax was imposed from August 2009 onwards. this segment has its share of concerns: very low margins.1 Automotive product remanufacturing accounts for two-thirds of all remanufacturing and is a USD 53 billion industry in the US and more than USD 100 billion worldwide. German supplier Robert Bosch had to re-engineer some motorcycle parts into Nano parts. Semih Severengiz. Rebuilt engines require only 50 percent of the energy and 67 percent of the labor that goes into manufacturing new ones. this can lead to yearly savings of 8. As a result. with the help of Indian engineers rather than their European counterparts. the chances of complete erosion of margins are high in the event the marketing strategy is not effective enough. operational and technical needs of the hybrid automotive industry. Nissan. Skerlos. In the auto component sector. the need for an alternate distribution channel compared to conventional ones. 51. On the other hand.Hyung-Ju Kim. Bajaj.com/ar/ultra_cars_study_080828/ IMAP’s Automotive and Components Global Report . and Japan. Günther Seliger 3 http://apra.000 have a very high volume potential in emerging markets such as India. 3 http://wardsauto. established auto component manufacturers will have to redesign their existing product portfolio to avoid falling in the low cost trap. Similarly. Europe and Japan.000 tons of copper and other metals. Currently. among various remanufacturing methods. viz.org/About/Reman. Skerlos. This growth has been largely driven by Asia.500 tons of iron ore.e. starter engine. and development of tailormade marketing strategies according to country as well as for exporting to other potential regions such as the Middle East. companies such as GM.000 or less) to a larger section of the population.2 million gallons of crude oil from steel manufacturing. Independent remanufacturing is better than independent OEM (these firms produce their remanufactured product by a limited cooperation with automotive producers or original product suppliers) and integrated remanufacturing (these work with a closed cooperation with original product suppliers) based on economic comparison.3 1 As per a study done by Hyung-Ju Kim.. Steven J. which would make cars that pollute more expensive. manufacturing of motors and other hybrid components is done in-house. raising productivity with lower resource and energy consumption. i. with the exception of China. motor component manufacturers must have a deep understanding of the specific automotive requirements and be responsive to the supply-chain. For example. the hybrid segment is conducive for the entry of new firms with lean manufacturing techniques that can give them an advantage over established component players. volume potential is huge. and Günther Seliger.More remanufactured products With flat growth in the US. automakers are targeting emerging markets by offering nofrill cars (LCCs priced at USD 6..5 million units globally by 2020. However. which experienced a 5 percent decrease in this segment over the past five years due to increasing disposable income.2010: Page 7 . Hence. According to a study by AT Kearney in 2008. This sector has seen incredible growth historically and is expected to reach 17. Africa and various countries in emerging markets. in Israel.3 cars priced lower than USD 5.2 Around 50 percent of original starter mechanisms are recovered via remanufacturing methods. especially India. automakers are targeting emerging markets by offering no-frill cars to a larger section of the population Remanufactured products are likely to increase in popularity over the next five to seven years due to their lower price points and competitive warranties (in addition to environmental benefits). and 6. and Renault are making substantial investments in this segment. Low cost car (LCC) segment to receive a boost in future With flat growth in the US. Even though margins are razor thin (2–3 percent in the case of the Tata Nano). To optimize this opportunity. Europe. independent remanufacturing (these firms work without cooperation with automotive producers or original product suppliers) is expected to be the most cost effective and have more potential in the future. This entails the designing of components from scratch. Steven J.

Governments in Japan. The US Department of Energy has set a target price of USD 1. GS Yuasa (world’s third largest Li-ion battery manufacturer).. Clayton Christensen of Harvard University in 1995 for an innovation that fulfils the requirements of some but not most consumers better than the incumbent does.html 4 Source: http://www.3 Companies such as A123.worldcarfans. NiMH batteries are much cheaper than Li-ion ones and are being used by many manufacturers to produce cheaper EVs. 2009 T O Topic H linking of vehicle and sales taxes to carbon emissions. the Chinese government has imposed certain restrictions on the usage of Li-ion battery vehicles.2 Durability of Li-ion batteries is still untested as it is a new technology: The ability to attain a 15-year life (or 300. The high cost of Liion batteries acts as a deterrent to its easy adaptability.1 billion by 2020 from USD 31. Altair Nanotechnologies. Competition from nickel-metal hydrid (NiMH) batteries in the near term will also act as a hurdle. However.azom. and South Korea have been providing subsidies to support their domestic Li-ion battery manufacturers. The two most likely places are the prop shaft tunnel and the area normally reserved for a petrol/ diesel tank.Lithium ion-battery business expected to grow Lithium ion (Li-ion) batteries are expected to be the next disruptive1 technology in the automotive industry.8 billion by 2015 and USD 74.400 for an all-electric car battery that will go 40 miles on a full charge.700 to 3. Furthermore. According to a report released by the Department of Energy in January 2009. China Sun Group (CSCG). the European Union is coming out with legislation whereby new vehicles must limit emissions to an average of 120 g/km by 2012 compared with the current average of approximately 160 g/km for diesel. The National Alliance for Advanced Transportation Battery Cell Manufacture.com/auto-news/1011097/ China-to-restrict-lithium-battery-vehicles-to-certain-cityroads.4 2 Source: http://www.com/109091721845/ volvo-c30-electric-vehicle-project-announced IMAP’s Automotive and Components Global Report .000 EV cycles) is still not proved and could be difficult to achieve. Source: “The electric-fueltrade acid test” – Economist dated Sep 03. That gives it a toehold. China. high energy density Li-ion batteries that can enable a car to travel up to 300 miles on a single charge can cost as much as USD 35.000 HEV cycles or 5. and stricter environmental legislations to curb CO2 emissions in the future should spur demand in the hybrid segment. Engineers are still deciding where to put the 24 kWh lithium-ion battery. which is the replacement cost of a Tesla Motors Roadster. The base for this is the compact C30. shown. Advanced Battery Technologies (ABAT).gasgoo.000. Additionally. Joseph Bower and Dr. On similar lines. The global Li-ion battery market for automotive application in electric vehicles (EVs) and hybrid electric vehicles (HEVs) is expected to grow to USD 21. to protect NiMH and lead acid battery manufacturers. 1 This term was coined by Dr. Li-ion batteries have a long driving range (at least 125 miles on a single charge) and increased lifetime (minimum of 10 years). but has begun work on a full electric solution known as the BEV (Battery Electric Vehicle). Left: Volvo is preparing a plug-in hybrid for release in 2012. the introduction of high fuel taxes in European countries. Similarly.2010: Page 8 . Ener1 (HEV). Li-ion technology still has many challenges. Lightweight.9 million in 2009. and Valence Technologies (VLNC) that are currently focusing in the Li-ion sector in addition to NiMH and lead acid batteries are expected to reap the benefits of the exponential growth in this sector.com/news.asp?newsID=19069 3 Source: http://autonews. leadacid batteries account for majority of the market. which allows room for improvement and. which has been left virtually unchanged from its petrol and diesel siblings.and gasoline-powered cars. Currently. The expected rapid decline in current cheaper technologies such as nickelcadmium and lead-acid batteries by 2013 due to stricter environmental controls over the use of cadmium and lead is also a positive factor for growth in Li-ion technology. Hong Kong High Power Technology (HPJ). comprising 14 US battery manufacturers. The main reason behind this growth is the government emphasis on hybrid vehicles to tackle environmental concerns. dominance. The main difference is under the hood an electric motor replaces the fossil-fuel engine. eventually. was formed in December 2008. the current cost of Li-ion based batteries is approximately three to five times higher when compared to currently used technology of lead acid batteries and NiMH. the US government announced a USD 2 billion stimulus package in 2009 to promote the manufacture of advanced batteries in the US as an indirect response to the growing dominance of Asian countries in this segment.

this scenario is expected to improve from 2010 onwards albeit at a sluggish rate. However. government support has not been entirely effective in all countries. growth in the automotive sector is expected to improve from 2010 onwards with emerging markets fuelling the growth story..4 percent in 2009 and expand by 3.00. which had set aside USD 1 billion for the Cash for Clunkers Program (USD 4. the government reduced the tax on the purchase of new vehicles that met pre-defined fuel efficiency and emissions criteria. the US government has also announced a stimulus package of USD 2. which translates into subsidies on interest payments.000 rubles (USD 20. with all economies taking a major hit and demand contracting at alarming levels. government support will remain crucial. Rising demand for small and fuel efficient cars coupled with government support in the form of tax incentives and subsidies at various levels should also give an impetus to the auto segment. 2009. For example.0 percent in 2010.Overall outlook The years 2008 and 2009 were tumultuous.293) instead of 350. the German government provided a USD 7. which is in line with the government’s goal of putting 1 million plug-in hybrid vehicles on the road by 2015.free-press-release. These measures will need to be continued in the future so that companies can sustain their business activities even amidst declining demand. For example.3 Similarly. including tax incentives. Governments have been providing support through various ways to rejuvenate the sector. the Japanese government introduced tax incentives and announced a stimulus package.837) and lowered the minimum down payment on a car to 15 percent from 30 percent. but there is sure to be substantial and active governmental involvement.de/international/business/0. According to IMF estimates in July and September 2009.13 1 http://www.6 billion) to promote old vehicle replacement and subsidies for new vehicle purchases.000 yen (USD 1.4 billion for electric vehicles.jama-english. The government also announced a stimulus package of 56. The role that governments are likely to continue to play in shaping this industry into the future is hard to assess. The government’s role should not only be limited to reviving automobile demand but also making sure that demand is sustained. Government support to play important role Even though the automobile sector is expected to see an upswing from 2009 and 2010 onwards.4 These kinds of stimulus packages were more of a temporary upsurge in demand. EVs and HEVs are exempt from taxes.685). sales are expected to take a hit in 2010 with the number of cars sold falling to 1 million. As a result.jp/europe/news/2009/no_2/art3.000 rubles (USD 11. In response to the economic downturn. However.html 4 http://seekingalpha.com/ news/200907/1248950228.8 trillion yen (USD 626. which has now dried up. in the US.html billion stimulus package in January 2009 where customers received USD 3. economic growth was expected to contract by 1. 3 http://www. subsidies. car makers such as Toyota have cut their production by 10 percent and have even shut down some plants. On April 1. the automotive sector bore the brunt of this collapse in the global economy. and initiatives aimed at local revitalization.spiegel. With the funds for discounts dried up and fan fare diminished. html 2 http://www. Similarly.646716. which currently is 11 percent on car loans. The government has also decided earlier to subsidize interest payments on cars worth up to 600. low carbon measures.2 Similarly. This amounts to two-thirds of the Central Bank of Russia (CBR)’s refinancing rate. In addition.500 discount for a new car) and then had to forcibly add another USD 2 billion to the discount kitty.1 The Russian government is offering subsidized auto loans.1518. 2009 sales picked up in a big way and are estimated to be 3. providing a tax reduction of 150.5 million cars for the year.2010: Page 9 .com/article/159347-why-americancar-manufacturers-fail IMAP’s Automotive and Components Global Report . With the stimulus fund drying up in September 2009. Some countries have seen an artificial demand for cars. As a result.250 for scrapping their old cars and purchasing new ones. governments of most nations have been implementing a wide range of emergency economic measures.

IMAP’s Automotive and Components Global Report .2010: Page 10 ..

pressure die castings.8% market share. dashboard instruments. (Market shares of the top four companies are available in the excel file). electric horns. China beat Japan (largest in 2008) in 2009 (till July 09) as the largest automobile manufacturer in Asia Pacific with auto production totaling 9. filed for Chapter 11 bankruptcy. other panel instruments Sheet metal parts. and coaches. plastic moulded components. with the US economy crumbling under the recession and auto companies facing the pressure of the slowdown. halogen bulbs.5 million to 4.Global Automobile Report . Toyota surpassed GM as the largest manufacturer of cars in 2008. electric ignition systems (EIS). China’s growth in automobile production has been driven by the increased government emphasis on developing infrastructure and providing subsidies to Chinese automobile manufacturers. wheels. Auto component manufacturing includes the production of all components required for the manufacturing of automobiles. Auto components can be sub-divided into the following categories: Sub-division Engine Parts Electrical Parts Drive Transmission and Steering Parts Suspension and Braking Parts Equipment Others Components Pistons. voltage regulators. manufacturing 8.8% of the US market and 18. ignition coils. buses. clutches Leaf springs. generators. gears.Appendix A: Global overview of automotive industry Business value chain The global automotive industry can be classified into • • Auto manufacturing Auto component manufacturing Auto manufacturing includes the production of passenger cars. fuel delivery systems. brake assemblies.2 The top four automobile manufacturers constitute 37.3 million in 2008 and 7.75% between 2004 and 2008.info/2009/08/18/china-socialism-consumer-behavior-the-worlds-biggest-automobile-maker-and-market/ 2 Source: Data Monitor .3 The auto manufacturing industry was earlier dominated by the three big players in the US (General Motors. axles.9 million in 2009 (till July 09) while auto production in Japan decreased from 11. Germany is the only developed country which saw an increase in sales (20. the industry has been facing a severe downturn. heavy trucks. fan belts. brakes.9 million vehicles against GM’s 8. which represented 51. representing a CAGR of –0. and are now in the process of restructuring. two of the biggest players (GM and Chrysler) collapsed.9% on a YOY basis) driven by the German government’s subsidy policy.html Snapshot of auto manufacturing sector • The global auto industry was battered by the economic slowdown as worldwide demand shrunk by almost 18% during the first half of 20091. spark plugs. With regard to automobile production by geography.6% of the global market with Toyota as the leader with 12. distributors. shock absorbers. engine valves.3 million vehicles. headlights. Toyota and Nissan are fast gaining market share. light commercial vehicles.3% globally in 2007.784 trillion in 2008. As a result. carburetors (largest component) Starter motors. brake lining Switches. However.info/2009/08/18/china-socialism-consumer-behavior-the-worlds-biggest-automobile-maker-and-market/ IMAP’s Automotive Industry Global Report -.automotive-online.7% by the US. flywheel magnetos Steering systems. hydraulic pneumatic equipment Source: http://www.1 million over the same period. The global auto industry generated total revenues of USD 1. Among western countries. Even though the auto manufacturing industry has been a major driver of economic growth (30% growth rate between 1995 and 2005 globally and generating 60 million jobs). piston rings. Ford and Chrysler). wiper motors. Asia Pacific commanded 35. • • • • 1 Source: http://designative.com/auto-industry.2010: Appendix A-i .8% in value in 2008 compared to 30.March 2009 3 http://designative.

emerging economies such as India and China are expected to be the new hub of automotive manufacturing. Moreover. most companies are now shifting their automobile manufacturing from the West to the East. However. 4 Source: Factiva. Goodyear and Continental. representing a CAGR of 2. Indonesia in utility vehicles. Majority of the demand for automobile is expected to be driven from the Asia Pacific (mainly China and India) and Middle East regions with demand stagnating in the mature US and European markets. Toyota presentation 5 Source: Factiva. India: 8 vehicles/1000 people).8%. China has already overtaken the US as the largest consumer of automobiles. Some Asian companies (including Korean car makers such as Hyundai).2010: Appendix A-ii . Datamonitor IMAP’s Automotive Industry Global Report -. improving infrastructure. Additionally. This sector is expected to fall in terms of value by 2.Future outlook of auto manufacturing sector • With developing countries in the East gaining expertise in automobile and component manufacturing and demand for automobiles increasing in these countries. which are emerging as the new leading players. namely. India and Thailand due to the availability of cheap raw materials and increasing demand for automotive products from the domestic market. Valeo. the recession-hit Big Three are now being overtaken by Japanese car makers such as Toyota and Nissan.5% between 2008 and 2013. which sell their automobiles in Western European countries. Delphi and Federal Morgul) accounting for less than 2% of aggregate global revenues. The global auto component sector increased from USD 560 billion in 2004 to USD 625. Consequently. China. hold more than 64% of global revenues5. India in two wheelers and small cars. China now specializes in components. Michelin. Worldwide demand for light hybrid electric vehicles (HEVs) is estimated to reach 4 million units by 20154. The market for auto parts and equipment is highly fragmented with the top four players (Affinia. indicating huge potential (US: 765 vehicles/1000 people. the global auto industry is expected to pick up due to renewed demand and expand globally at a CAGR of 2.3% between 2008 and 2013 with Asia being a major contributor to the growth story on account of increased manufacturing activity in India. most big automobile companies are setting up operations in these countries to leverage on the growing demand and low cost production capabilities. are shifting their manufacturing base to Eastern Europe rather than importing them to avoid tariffs. the auto components segment has also seen declining growth rates between 2006 (3. As automotive markets in developed countries have matured. demand for hybrid cars is expected to increase going forward. With the economy reviving from the global economic slowdown. Driven by burgeoning energy costs and rising emission restrictions. The contribution of hybrid cars in auto manufacturing is expected to increase in the future. Hybrid cars currently form only 2. On the other hand. and lower impact of the global slowdown. Manufacturing is also shifting towards East European countries due to their lowers costs and better transport facilities.2 billion in 2008. Bridgestone.5% YOY). • Future outlook of auto component manufacturing • The auto component sector is expected to increase at a CAGR of 0. Majority of automobile production activities are concentrated in Japan. • • • • • Snapshot of auto component manufacturing • • • Like the automobile manufacturing sector. auto penetration rates in these countries are much lower than those of developed countries. Demand from India and China is expected to increase driven by rising population.4% YOY) and 2008 (1. and Thailand. China. and Thailand in pickup trucks and passenger cars. auto component manufacturers in emerging economies are likely to flourish. China: 40 vehicles/1000 people. the top four players in the tire and rubber market.5% of total car sales with 15 models being sold in late 2008.1% YOY in 2009 on account of the decline in automobile demand particularly from the US and Europe caused by the global economic slowdown. driven by demand for fuel efficient cars. increasing per capita income.

Asia (14. medium. including a plug-in version.5 million (-15. Scania. the Canadian and Ontario governments will have a 12. Mercedes-Benz vans. The company opened a plant in Pune in March 2009 to build the Skoda Fabia compact car later in 2009.0% YOY). Others (1%) 8.2%).2010: Appendix A-iii .9 billion (3.8% YOY).1 million (-12.7%). an upgraded Mercury Milan and new Milan Hybrid. Daimler (Germany) Product Portfolio Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) Additional points IMAP’s Automotive Industry Global Report -.99 billion (–25.1% YOY) Revenue: USD166. 8. Europe (21.3%). alternative propulsion systems such as hybrid drive and fuel cells.3 million cars produced in 2008 (2. SEAT and Skoda.2% YOY). other regions (12.8% YOY) Revenue: USD 140.77 billion (2. Rest of Europe (47%) The company has no eco-friendly car in its portfolio and plans to introduce E-UPp in 2013. Net Income: USD 1.3%). Japan (36. trucks.96 billion (23. This car is planned to be an electric small car for the masses.29 billion (3. The company also plans to launch lithium-ion battery equipped plug-in hybrid vehicles for fleet customers in the US and elsewhere by 2010. The company has also developed eco-friendly electric cars in which the electric motor of the purely battery-powered BlueZERO E-CELL is combined with an additional three-cylinder. The company received USD 20 billion from the US government before the filing and will get another USD 30 billion post filing to see it through its restructuring and exit from bankruptcy protection. Net Income: –USD 30. The car can function for 63 miles between five hour charges.4%). Operating Profit: USD 19. Bugatti. Asia (12%). Emphasis on hybrid sales as the company plans to sell 1 million cars a year from 2010 onwards.1 million (-0.8% YOY) Pioneer in luxury cars. trucks. Net Income: USD 6. and vehicles for the medium and heavy segments North America (48.98 billion (–17. buses/vans. 2.5%). Launched an iQ ultra-efficient package vehicle in Japan and Europe in 2008. South America (8.7% YOY).4%). Latin America (9. Audi.1%) Moving towards hybrid vehicles. The iQ was specifically designed to reduce CO2 emissions and realize higher fuel efficiency.5% stake in the company Cars in small. Other American Countries (8%). Asia Pacific (8. Operating Profit: USD 9. full size pick ups. US (18. Africa.8%).4% YOY) Cars. and its Prius model is the world’s best selling hybrid car.3% YOY) Revenue: USD 148.7%) In 2009. North America (29. Asia/Oceania (7. Toyota (Japan) Product portfolio Passenger cars.97 billion (–63. Africa (1.2% YOY). 6. and premium segments. In June 2008. cars.28 million (4.1%). and utility vehicles America (59.Thumbnail summaries of top 10 vehicle manufacturers 1. minivans. In 2012. Europe (14%). Germany (24. After providing aid. Toyota sells 13 hybrid vehicle models in 50 countries. and heavy trucks. and Other Countries (11. Western Europe (25.7% YOY). Ford intends to deliver its third generation of hybrid vehicles. Leading brands include Volkswagen. The company has 50 manufacturing facilities in 27 countries and is the leader in hybrid cars.8%).9% YOY). and an all-new Lincoln MKT premium crossover with EcoBoost. turbocharged petrol engine.4%). a Ford Flex and Lincoln MKS with a fuel-efficient EcoBoost engine. Lamborghini.28 billion (-15.09 million (-4. Net Income: –USD 14. Ford plans to introduce upgraded gas and new hybrid versions of the Ford Fusion midsize sedan.6%). The car will have a 500-lb lithium-ion battery pack stored in the floor. vans. Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) 2.6%). a diesel HEV.67 billion (–USD 2.72 billion in 2007) Premium passenger cars (Mercedes Benz is the largest contributor to revenue with 48. Europe (38. To reduce CO2 emissions. Oceania. Daimler trucks. Volkswagen (Germany) Product Portfolio Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) 3. Ford Motor Company (US) Product Portfolio Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) 5. General Motors (US) Product portfolio Geographic coverage (2008) Cars manufactured (2008) Financials (2008) Additional points 4.73 billion in 2007) Company filed for Chapter 11 bankruptcy in June 2009.5% in 20082). Target market is 150 countries.01 million (cumulative total from 1999). recreational and sports utility vehicles (SUVs).86 billion (–38.3%). Operating Profit: –USD 21. North America (11. These cars use fuel cell technology. large. Supplementing that is a 15-foot roof mounted solar array as well as another 3 sq ft of solar cells mounted on the back of the vehicle’s sun visors. SUVs. and the Middle East (8%). The hatchback version of Volkswagen Polo specially developed for the Indian market will be added from 2010 onwards. the company launched a new-generation van. Operating Profit: –USD 11. an upgraded Lincoln MKZ. a high-performance Taurus SHO with an EcoBoost engine.1 5.87 billion (–USD 644 million in 2007 ). The company also makes hybrid buses.6% YOY) Revenue: USD 146. Operating Profit: USD 7. Total sales of hybrid cars till August 2009 were 2. the company makes pickups.7%).5 billion (11.9% YOY) Low consumption small cars to luxury class vehicles.39 million in 2007). buses.8%). Sprinter Plug-In-Hybrid. the company is working on lightweight components. and Central and South America.5%). In 2010. Company has nine brands from seven European countries.9 billion (12.0% YOY) Revenue: USD 229. and electronic systems.3% YOY). and Daimler buses Germany (22. and trucks. Toyota is the market leader in hybrid cars. In the commercial vehicles sector. Ford plans to deliver a commercial battery powered vehicle for fleet customers and a battery-powered passenger vehicle in 2011. Bentley. Net Income: USD 15 billion (6.

25 billion (–11.1%) Europe excluding Italy (40. commercial vehicles. India. The company owns three brands: BMW. in 2008 3.1%). and Rest of the World (16. Net Income: USD 1. Company is in a partnership with Renault for automobile manufacturing.89 billion (8. Operating Profit: USD 6. recreational vehicles.5%). Argentina.8%).1% YOY).5%).6 million (-1.71 billion (–18. and commercial vehicles South Korea (54.3% stake in Nissan. and Rolls Royce. SUVs. Launched Civic Hybrid. wheel loaders. Asia (10. trucks.5%). Alabama). Net Income: USD 4. Europe (12.9%). Datamonitor. Japan (17. trucks. first hybrid car in India. and Brazil. UK (9.16 billion (–78. Operating Profit: USD 1.93 billion (4.1%) Alliance with Indian auto manufacturer Bajaj to introduce ultra low cost cars from 2011 3.25 billion (3. Germany (20.6% YOY) Passenger cars. Japan (23.36 billion (–11.9% YOY) Passenger vehicles. and motorcycles.7%) The company is moving towards developing hybrid cars.5% YOY) Revenue: USD 104. Net Income: USD 5. utility vehicles. North America (50. The company has 10 plants. Operating Profit: USD 4.37 billion (14. The company has two plants in Japan and other plants at the US (Ohio.22 billion (7. a small car which has already been launched in India.2010: Appendix A-iv .32 billion (–27. The company also plans to introduce a hybrid version that runs on LPG and lithium ion polymer batteries for Elantra. North America (9.8%) Electric version of i10. Africa/Asia/Oceania (15.0% YOY) Automobiles.7% YOY).8%). special need vehicles.97 billion (10. MINI. North America (40.2%).84 billion (1.3%).7%).9% YOY) Revenue: USD 29. Europe (19. Canada (Alliston).6.1%).9%). Fiat (Italy) Product Portfolio Geographic coverage (2007) Future plans Cars manufactured (2008) Financials (2008) 9.6% YOY) Revenue: USD 77.92 billion (–11. tractors.6%) NA 2. Rest of America (3.2%). Mercosur (16.5 million Nissan (2. 1.7% YOY) Automobiles and motorcycles. SUVs. of which 6 are in Italy and 1 each in Poland.5% YOY). Hyundai (South Korea) Product portfolio Geographic coverage (2007) Future plans Cars manufactured (2007) Financials (2008) IMAP’s Automotive Industry Global Report -.9 million (1.2% YOY). while Nissan owns 15% of Renault shares. Nissan Motors (Japan) Product portfolio Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) 8.2% YOY). excavators.7%) 1.7%).3% YOY) Revenue: USD 94.1 million (-3. Capital IQ.4 million (-6. and Rest of the World (8. Honda (Japan) Product portfolio Passenger cars. Europe (15%).2%).8% YOY).67 billion (5. Operating Profit: USD 8. Net Income: USD 474 million (–88. UK (Swindon) and Thailand (Ayutthaya).9%). Renault holds a 44. and Asia (8. Others (9.3% YOY) Source: Factiva.4% YOY). Italy (24. tele-handlers.6%) Operating Profit: USD 1. BMW (Germany) Product portfolio Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) 10. Net Income: USD 2.5%). North America (21.8%). US (21. light utility vehicles and mini vans. Rest of Europe (29.6% YOY) Revenue: USD 86.9% YOY­ ). Bloomberg Geographic coverage (2008) Future plans Cars manufactured (2008) Financials (2008) 7.

Chassis. Net Income: USD 801. Germany (10. Net Income: USD 979 million (-21. and components Aston Martin.7 billion (-9.5%). Daimler. Maserati.4%) NA Revenue: USD 23.7% YOY) Japanese company manufacturing auto components and housing related equipment Drivetrain components.3% YOY) Brief description Parts manufactured Customers Geographic coverage (2007) Future plans Financials (2008) 4. Operating Profit: USD 1. It is the fourth largest player in the tire market and market leader in Europe in passenger and light truck tires. Operating Profit: USD 1. Other Foreign Countries (25.1% YOY). Toyota. Net Income: USD -1.47 billion (56. Fiat. Johnson Controls (US) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 3.1%). Rest of the World (2. Chery Automobile. car navigation systems.6 million (-91% YOY) Germany based automotive industry supplier.9%).2010: Appendix A-v .9%YOY). AB Volvo. BMW. Other European Countries (28. Mercedes Benz North America (49. Cayman. Toyota.5 million (40.1% YOY) Diversified global automotive supplier Automotive systems. and automobile body related products Toyota Japan (69%) NA Revenue: USD 23.3%YOY). Fiat. Other (13%) NA Revenue: USD 31. Operating Profit: USD 530 million (-53. brake and chassis-related products. Operating Profit: USD -36. Asia and Oceania (12.9% YOY). Japan (27.96 billion ( 9.2 billion (14.7%).8 YOY) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 2. Nissan US (35. Audi AG. Americas (17. Porsche.8% YOY) Manufacturer of automotive interior systems and power solutions that optimize energy usage in batteries for automobiles and hybrid cars Automotive interiors. Denso Corp (Japan) Japanese company engaged in the manufacture and sale of automobile parts Thermal systems. Continental AG (Germany) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 5. and industrial tires. Net Income: USD 100.06 billion (9. Net Income: USD 71 million (-89. American Tire Distributors Holdings.0% YOY). modules. BMW.58 billion (40. Aisin Seiki Co (Japan) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 6. telematics GM. Europe (13%).62 billion (16. Europe (47.9%). Europe (12. Bridgestone Corp (Japan) Japan based manufacturing company in the tire segment Tires Acushnet Company. sensor systems.14 billion (21. DaimlerChrysler.5 YOY). Kia. products that optimize energy usage in batteries for automobiles and HEVs Ford. Chrysler. Toyota Americas (44.Thumbnail summaries of top 20 auto component manufacturers6 1. Ford.65 billion (-217.2 YOY). hydraulic and electronic brake systems.4%). GM. assemblies. Operating Profit: USD 3. Volkswagen. Ferrari. electric systems Toyota accounted for 30% of sales Japan (56.28 billion (8. and Suzuki NA NA Revenue: USD 35.7% YOY).1% YOY).8%). Mercedes-Benz. manual transmissions.1% YOY). IMAP’s Automotive Industry Global Report -. Operating Profit: USD 1. automatic transmissions. powertrain control systems. winter tires.7% YOY). Magna International Inc (Canada) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 6 Includes only listed companies and hence Robert Bosch (private company) which is one of the major players in this sector has been excluded.1% YOY). Honda.8%).5 million (-101.2%).05 billion (17.6%) Increasing focus on emerging markets such as India and China Revenue: USD 38. Paccar.8%) Focus on parts for hybrid vehicles Revenue: USD 35.9%).27 billion (-40. Net Income: USD 2. Hyundai.

31 billion Largest automotive seat maker in Europe Seats PSA Peugeot Citroen S. Delphi Corp (US) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 11.74 billion (12. Toyota Auto Body Co (Japan) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 9. and Africa (40%). Operating Profit: USD 195 million (17.4% YOY). South America (6.5% YOY). trucks.7%). Hyundai.2%). and Volkswagen North America (42.6% YOY). modules.1% YOY). owns the two strongest brands in the tire industry: Goodyear and Dunlop Tires NA US (37. Net Income: USD -77 million (-12.1% YOY) Germany based automotive supplier Driveline and chassis products Audi.3%) NA Revenue: USD 19. Faurecia (France) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) IMAP’s Automotive Industry Global Report -. Hyundai (3%).36 billion (-25. BMW (8%). Daimler (6%).04 billion (-199. GM (6%).575 billion (1.5% YOY).9%) NA Revenue: USD 24.295 billion (0. integrated systems.2% YOY). Net Income: USD 527 million (-50. Ford (11%). the Middle East. components.0% YOY).8% YOY).5%). Chrysler.2010: Appendix A-vi .A (24% of sales). agricultural equipment. Europe. automobile bodies.9% YOY) Leading tire maker in North America and Latin America and second largest tire maker in Europe. BMW.06 billion (-19% YOY). transportation components. Others (18. and accessories Automobile parts NA NA NA Revenue: USD 13. Chrysler (4%).3%) NA Revenue: USD 18.8% YOY) Leading supplier of auto components Vehicle electronics. Goodyear Tire and Rubber Co (US) Brief description Parts manufactured Customers Geographic coverage (2007) Future plans Financials (2008) 10. Operating Profit: USD -1. North America (31.3% YOY) Japanese based company engaged in the manufacture and sale of automobiles. and Other Countries (50.1% market share in 2008 Tires NA Europe (49. Nissan NA NA Revenue: USD 17. Net Income: USD -841 million (USD-324 million 2007) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 8.4%). Daimler Trucks. ZF Friedrichshafen AG (Germany) Brief Description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2007) 12. Net Income: USD 3. Michelin (France) French based company which manufactures tires for passenger cars. other electronic equipment Ford. Toyota (2%) and Other Vehicle Manufacturers (3%) NA NA Revenue: USD 17. Operating Profit: USD 133 million (-19.49 billion (-0. Largest tire manufacturer in the world with a 17.01 billion (4. Volkswagen (21%). Operating Profit: USD 749 million (-22. Renault-Nissan (12%).7%). Net Income: USD 114 million (0. and aircraft. Asia Pacific (11. Renault Nissan. Operating Profit: USD 1. two-wheelers.7. Germany (12%).2% YOY).

and transmission Ford. engine management systems. BMW (19.3% YOY) Korea based auto component manufacturer.5%).3% YOY). Net Income: USD 356 million (38. Mercedes Benz. GM.8% YOY).9%) NA Revenue: USD 14.1%).8% of sales).8% of sales). and power train components Aisin Seiki. interior controls. Chrysler (9.3% YOY) French industrial company focusing on auto components and modules for cars and trucks Lighting systems. South America (0. PSA Peugeot Citroen. door trims. Operating Profit: USD -76 million (-117. modules. climate control. Renault Nissan.2%) NA Manufacturer of seating systems Seat systems GM (28. Net Income: USD -779 million (-965. and components Chassis systems. North America (13. Ford (12. Ford (20. Chassis. Operating Profit: USD 1. TRW Automotive (US) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) Diversified supplier of automotive systems. combination parts.52 billion (-6. automotive filters.54 billion (-15. Net Income: USD 990 million (19. Net Income: USD -302 million (-373. Lear Corporation (US) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) Additional points Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 16. Old Carco. Valeo SA (France) Brief description Parts manufactured Customers Geographic coverage (2007) Future plans Financials (2008) 17. security systems. body controls. safety parts.6%) US (24%). Operating Profit: USD 464 million (-31. compressors.2010: Appendix A-vii .13. braking components. GM (13. Asia (13%). Mazda.2%). and drive train products NA North America (35.5% YOY). Hyundai. electrical systems.6% YOY) 14. Net Income: USD -681 million (USD -372 million) IMAP’s Automotive Industry Global Report -.5% of revenues in 2007) Europe (67.3%). powertrain. Japanese manufacturer of automobile parts and textile products Automobile interior components such as floor carpets and seats. Volkswagen. Fiat.995 billion (2. bumpers. Operating Profit: USD -94 million (USD -63 million 2007). It has merged with Hyundai Autonet Co.9% YOY).79 billion (16.08 billion (22.3%YOY).2%). engine undercovers. fender lines. and Toyota NA NA NA The company has filed for Chapter 11 bankruptcy in 2009. Other customers: Daimler Chrysler. front-ends.1%).68 billion (-3. injection parts.0% YOY). Toyota Boshoku Corporation (Japan) Revenue: USD 10.6%). Europe (25.4% YOY) Revenue: USD 9. Volkswagen (61. and wheel and deck modules Daimler. PSA. Germany (19.5%). Operating Profit: USD 574 million (38. Subaru. Rest of the World (52. Visteon Corporation (US) Brief Description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) Diversified company manufacturing electronic products Chassis.6%). UK (4%). Honda.4%YOY). engine valves.9%) NA Revenue: USD 12. Toyota NA NA 15. cockpit. South America (5. Renault-Nissan. floor silencers. wiper systems.4%YOY). Hyundai Mobis (Korea) Brief Description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) 18.7 YOY). and engineered fasteners and components Volkswagen (17. Volkswagen NA NA Revenue: USD 8. engine cooling.

Dongfeng and BYD. Company websites. Tata. 6. Calsonic Kansei Corporation (Japan) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) Japan-based comprehensive automotive parts manufacturer Module parts. 0.7%).68 million (2008). increase in per capita income 1. However.8% 550/1000 people Volkswagen. Nissan. 2. lower manufacturing costs due to cheap raw material and labour costs. Daimler. IMAP’s Automotive Industry Global Report -.7% YOY). rubber cushions.22 billion (108. India Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 4.9 million (118. 0. Mahindra High population. Toyota NA NA Revenue: USD 7.5% YOY). Datamonitor. Hyundai motors. GM. 8.02 million (2008) Automobile production Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 2. Ferrari. 1.2 million (till Aug 09) 8.4%) NA Revenue: USD 22. Bajaj. FAW Car Co. Italy like most other European countries enjoys a relatively high car penetration rate of 598 cars/ 1000 people. Germany Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 3. Lamborghini and Maserati Dominant luxury car maker in Europe.2 million (2007).3 million (2008). Capital IQ. lower manufacturing costs due to cheap raw material and labour costs. lower vehicle penetration rates.9% 40/1000 people SAIC. most consumers are unable to get the desired financing for purchasing new automobiles and this is impacting the industry. Sumitomo Electric Industries Ltd (Japan) Brief description Parts manufactured Customers Geographic coverage (2008) Future plans Financials (2008) Country Profiles 1.1% YOY) Source: Factiva. Net Income: USD 767. Ford. Americas (13%). system products BMW.2 million (till Aug 09) 0.23 million (2007). High population.2010: Appendix A-viii .6 million (2007). 6. automobile electrical parts.19. Net Income: USD 24 million (1741. Audi.2% 7/1000 people Maruti. Beiqi Foton Mortors. hoses for automobiles. Europe (10. Bloomberg 20.3 billion (118. Porsche and Opel Leader in European auto industry and state of the art technology but the negative factor is the already higher penetration rate which has made the market a bit saturated.9% YOY). Operating Profit: USD 124 million (18. Operating Profit: USD 1.4% YOY).3 million (2007). lower vehicle penetration rates. Jaguar. emphasis on infrastructure by Government. 9.9%).7% YOY) Japanese manufacturing company Wire harnesses.0% 598/1000 people Fiat (70% domestic market share). Italy Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) NA 1. Land Rover. Honda. and others Toyota Japan (61.3 million (2008) NA 2. China 8.8 million (2007). 2.23 billion (21. BMW.04 million (2008) NA 5. Asia (14.

07 million(2008) NA 2% NA General Motors. 1.5. 2.3% 750/1000 people GM. 2. Ford. Two of the three major companies GM and Chrysler (who were global leaders in the past years) have filed for bankruptcy. 2. 2.5% 188/1000 people AvtoVAZ. recession has hit the industry which has resulted in drastic reduction in exports (-29.3 million (2007). Japan 11. Also exports have seen a drastic decline in 2009.8 million (2008). Honda. No future growth expected. 1. Korea Toyota. Russia Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 9. 7. However. proximity to USA IMAP’s Automotive Industry Global Report -.1% NA General Motors. support by Brazilian Government. Mitsubishi and Kawakasi. Volkswagen .3% in 2009 year to date). Nissan.2010: Appendix A-ix . GAZ Auto Plant Low penetration rate of 188 cars per 1000 people.7 million (Till July 2009) 10. 11. Canada Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 10.6 million (2007).2 million (2008) NA 3.1 million (till Jul 09) 6.08 million (2007). 6. Zenn Motor Company Hit by recession due to which there has been slowdown in production. Sollers.6 million (2008) 1. Recession has led to a huge decline in production in Japan and auto production has fallen.7 million (2008) NA 7. Fiat. 8. 2. Chrysler Market is saturated.2 million (Till August 2009) 3.9 million (2007). Financial aid has been given by the Government to help restructure these companies.8 million (2007). 4.6 million (2007).5 million (2008).6 million (2007).6% NA Automobile production Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 6. 4. 1. Renault and Troller Cheap availability of raw material and labour .5 million (2007). Chrysler.07 (till Aug 09) 2. Suzuki.7 million (2008) NA 8.6% NA Automobile production Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) Hyundai Motors (25% market share) and Kia Motors Low cost of production. USA Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 8. Brazil Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 7. 3. 3. expertise in auto component manufacturing.7 million (2008).

proximity to Western Europe makes it a good destination for manufacturing due to low cost of inputs.Toyota. Opel and Suzuki Hungarian automotive industry is expected to become a major automotive hub in Europe due to its central position in EU. Poland Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 0. Isuzu.3% 300/1000 people Audi.9% 383/1000 people Honda. Major auto companies such as Daimler. Source: OICA. Skoda Auto. Nissan. has attracted a lot of FDI. Rolls-Royce. Volvo. Bloomberg. BMW Peugeot. Czech Republic Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 13. Fiat. Datamonitor.Mercedes.33 million (2007). Export oriented automotive component industry 12. and TPCA( JV between Toyota and PSA Peugeot Citroen) Very strong auto component sector. Volkswagen.8% 615/1000 people Renault through an agreement with local manufacturer Revoz Highly technologically developed auto industry.9% NA Hyundai Motors. Citroen.11. Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 0. This has resulted in high FDI investments.95 million (2008) NA 0. ACEA. 0.9 million (2007). Slovenia Automobile production 2008 Automobile exports Share in global auto manufacturing in 2008 (in volume) Vehicle penetration rate Major automobile companies Major factors driving auto industry (Positive/negative) 1.2010: Appendix A-x . skilled workforce and close proximity to the western European market.35 million (2008) NA 0. Renault and others are investing in Hungary. 0. 0. 0. SIAM IMAP’s Automotive Industry Global Report -.Porsche. and Ferrari Low labour costs. Lamborghini. Hungary Automobile production 2008 0. Opel.79 million (2007).9 million (2008) NA 1.95 million (2008) NA 14.94 million (2007). 1.

7 million Hyundai Mobis acquired additional 5.7 1. Private placements.309. UK 4 Includes Australia IMAP’s Automotive Industry Global Report -. Poland.166. Top 5 Countries South Korea United States Russia Brazil China Region Asia 2 # of deals 3 12 2 2 5 # of deals 15 11 3 14 1 Value (USD million) 1.7 184.6 283. Romania. Asia was the leader among the regions with USD 2.6% Source: Capital IQ In terms of distribution of deals by business segments in 2009.3%) and value (59. auto components saw the majority of the deals both in terms of volume (77.5 183. Indonesia.6 Deal between Hyundai Motors and Hyundai Mobis worth USD 1. Segment Auto Parts and Equipment Automobile Manufacturers # of deals 34 10 Value (USD million) 1.0 Largest Deal in terms of Value Hyundai Mobis buying Hyundai Autonet Co Ltd for USD 700.166.5%.1 Source: Capital IQ Europe3 Latin America US/Canada Others 4 1 Only M&A deals have been considered.890. Russia 3 Includes France.84% stake in Hyundai Motor Co for USD 1. Netherlands.0 236. the largest deal of USD 31.2 million. public offerings and share buybacks have been excluded 2 Includes China.2 250. Hong Kong.07 billion 78. 82.6 123.8 million Source: Capital IQ In 2009.5 Deal between Schaeffler KG and Continental worth USD 31.8 billion. Total number of deals1 in 2009 is 149 compared to 424 during the full year of 2008.799.0 200.Appendix B: Automotive Sector M&A Deals Summary Automobile sector saw a total transaction value of USD 2.075.806.07 billion. There has also been a major decline in the largest deal and shift from Europe to Asia (effect of global economic slowdown).581.2010: Appendix B-i . witnessing a decline of 93. Slovakia. but transaction details are not available for all the deals.799 million with a total of 3 deals while US with 12 deals (maximum in volume) was at second position with USD 236 million in transaction value. Particulars Total Number of deals (includes only M&A) Deals with available transaction value Total Transaction Value (USD million) Largest Deal Top 5 deals as a % of total deal value 2008 424 195 44.8 billion was in German automobile space between Schaeffler KG and Continental whereas 2009’s largest deal was in Asia between Hyundai Motors and Hyundai Mobis in South Korea valued at USD 1.1 6.89 billion comprising of 44 deals in 2009 YTD compared to USD 44. In 2008. South Korea saw the highest transaction value of USD 1. Malaysia.81 billion with 195 deals during 2008. India.8 Value (USD million) 2.7% 2009 YTD 151 44 2.0%).

4 0.0 236.2 0.5 3.7 47.5 0.6 283.4 0.4 6.Summary of Deals in the Automotive Sector in 2009 by Country Country South Korea United States Russia Brazil China Netherlands Slovakia UK Canada Thailand Vietnam France Australia Indonesia Hong Kong Poland Argentina India Malaysia Romania Total # of Transactions in 2009 3 12 2 2 5 1 1 3 2 1 1 2 1 1 1 1 1 2 1 1 44 Total Transaction Value (USD million) 1.0 - Note: Only the deals where transaction value is available have been considered.0 200.6 Average EV/ Revenue (x) 1.0 0. IMAP’s Automotive Industry Global Report -.5 0.6 123.1 Summary of Deals in the Automotive Sector in 2009 by Region Continents Asia Europe Latin America US/Canada Others Total # of Transactions in 2009 15 11 3 14 1 44 Total Transaction Value in USD million 2.6 0.0 58.3 1.8 0.2010: Appendix Bii .166.6 4.8 111.4 Average EV/ EBITDA (x) 11.1 14.1 Average EV/EBITDA (x) 11.1 6.1 4.1 0.6 0.0 - Summary of Deals in the Automotive Sector in 2009 by Business Segments Segments Automobile Manufacturers Auto Parts and Equipment Total # of Transactions in 2009 10 34 44 Total Transaction Value in USD million 1.799.310 2.6 Source: Capital I Average EV/ Revenue (x) 0.1 2.890.1 18.4 Average EV/ EBITDA (x) 6.1 1.7 10.5 183.9 0.2 0.6 Average EV/ Revenue (x) 0.6 7.8 0.890.0 0.7 184.2 250.581 1.5 2.3 0.7 4.2 67.0 3.890.3 2.4 0.4 2.

As a result. o o o • Growth in emerging market o o o • Low cost car (LCC) segment o o o o 1 http://www. motor component manufactures must have a profound understanding of the specific automotive requirements and be aware of the operational. there are also numerous hurdles. Nissan. a green tax has been imposed from August 2009 onwards which would make polluting cars expensive These environmental regulations in turn have spurred growth in hybrid vehicles. While there are immense opportunities in terms of volume considering the lower number of existing players. cars priced lower than USD 5. For example. This would entail designing of components from scratch.3 From 2003 to 2008.com/news. So any wrong calculation during the launch of the product can erase margins completely.000 have a very high volume potential in emerging markets such as India. due to the limited volume of hybrid vehicles and absence of standardized technology across various companies.2 Currently. UK.2010: Appendix C-i . While demand is expected from China and India.Appendix C: Growth Drivers Drivers for the automobile sector • Environmental legislations on the use of cleaner and fuel efficient cars o Due to environmental concerns. Similarly.asp?newsID=19069 2 http://www. and CO2 emissions.1 The global market for hybrid vehicles is predicted to increase to over 11 million vehicles a year by 2020. manufacturing of motors and other hybrid components is done in-house. According to a study by AT Kearney in 20084. Europe. Bajaj.9 million unit peak reached during March 2008 prior to the sharp global economic slowdown. and Eastern Europe. The scope for established auto component manufacturers is the redesigning of their existing product portfolio so as to avoid falling in the low cost trap. especially India. Africa.5 million units globally by 2020 largely driven by Asia.com/Articles/2009/07/13/9231220/lithium-producers-set-to-benefit-from-growth-in-hybrid-autos. whereas other countries apply a combination of factors including car price. with the exception of China.com/ar/ultra_cars_study_080828/ IMAP’s Automotive Industry Global Report -. in Israel. Similarly. and Renault are quickly venturing into this segment. and Luxembourg use CO2 emissions as the only factor for car taxation.azom. tax breaks in Brazil saw sales climb to 3. a YOY rise of 21%. The market development strategy needs to be tailored for the particular country as well as for exporting to other potential regions such as the Middle East. A cut in retail taxes and increased vehicle subsidies in rural areas in China led to a 38% YOY rise in vehicle assemblies in June 2009. which has experienced a 5% decrease in this segment over the past five years due to increasing disposable income. and technical needs of the hybrid automotive industry. supply chain.1 million units in June 09. volume potential is huge. which is around 23 times the market size in 2008. Government stimulus and tax incentives coupled with rising disposable income are major catalysts behind the revival in China and other emerging markets. engine capacity. With stagnant growth in the US. China. Even though margins are razor thin (2–3% in the case of Tata Nano). France. with the expected upsurge in demand for hybrid vehicles and continuous decrease in prices of these automobiles. Majority of growth in the global automobile industry is expected to come from India. companies like GM. To actualize this opportunity. the foremost being very low margins and development of an alternate distribution channel compared to conventional ones.000 or less) to a larger section of the population. This sector has seen incredible growth historically and is expected to reach 17. China doubled its automobile production whereas US saw its production decline by 50%.icis. China has been the front runner in the auto market’s recovery. all Western European countries levy some form of CO2 tax on passenger cars. automakers are targeting emerging markets by offering nofrill cars (LCCs priced at USD 6. outsourcing of motor requirements is round the corner. and various countries in emerging markets. Annual production of electric vehicles is expected to increase from the current base of 19 models in 2009 to 150 by 2014 and 200 by 2019. 2009 4 http://wardsauto. much above the 5.html 3 Global Auto Report – Scotiabank Group dated July 31. However. recording a YOY growth of 48% in June 2009 with 7 million units. and Japan. manufacturing is likely to be concentrated in Eastern Europe due to its close proximity to Western European nations.

These measures will have to be continued even in the future so that these companies are able to sustain their business activities amidst declining demand in sales. or about 1. This amounts to two-thirds of the Central Bank of Russia's (CBR) refinancing rate. Günther Seliger 6 As per the study done by Hyung-Ju Kim. creating more productivity with lower resource and energy consumption.250 for scraping out their old cars for purchase of new cars. Semih Severengiz.de/international/business/0. car makers like Toyota have cut their production by 10% and have closed a plant down10. government backing has not seen positive synergy effects in all the countries.2010: Appendix C-ii . Some of the countries have seen only artificial demand for cars and which have now dried up. Due to this. The government has also gone for a stimulus package of 56.13billion stimulus package in January 2009 where customers received USD 3. higher priced technologically advanced products such as electric power steering.5 million cars. Semih Severengiz. • Japanese government has gone for tax incentive measures and stimulus package. remanufacturing regulations are expected to be tightened in future to promote sustainable manufacturing. For example. the starter engine. rack and pinion steering gears.html 10 http://seekingalpha. subsidies. low carbon measures and measures aimed at local revitalization. sales for 2009 picked up big time and are estimated to be around 3. Similarly. this can lead to yearly savings of 8. • However.1518.e.500 tons of iron ore.Hyung-Ju Kim. The government’s role should not only be limited to reviving the demand for automobile. 51. Steven J.646716.jp/europe/news/2009/no_2/art3.000 yen. • Trend towards remanufactured products o With the emphasis on higher economic contribution per unit of product manufactured. Moreover. Independent remanufacturing is better than Independent OEM and Integrated remanufacturing based on economic comparison. 5 Economic and Environmental Assessment of Remanufacturing in the Automotive Industry . Skerlos and Günther Seliger.free-press-release. Automotive product remanufacturing accounts for two-thirds of all remanufacturing and is a USD 53 billion industry in the US and more than USD 100 billion worldwide. but making sure that demand is permanent. 7 http://www. i.000 rubles earlier and lowered the minimum size of the down payment on a car to 15% from 30%8. with the help of Indian engineers rather than their European counterparts. raw material. which currently is 11% on car loans. the scope for startup component suppliers to enter this segment is to learn new and lean manufacturing techniques that can give them an advantage over other established component players. sales are expected to take a hit in 2010 with number of cars falling to 1 million units9. On April 1.2 million gallons of crude oil from steel manufacturing.html http://www. and 6. Remanufactured products are likely to increase in popularity over the next 5–7 years due to their lower price points and competitive warranties in addition to environmental benefits. Moreover among various remanufacturing methods applied. US adopting the same strategy like Germany. o o o o o Government support for this sector As a response to the economic downturn. Also Electric vehicles (EVs) and Hybrid Electric vehicles (HEVs) are exempt from taxes which provide a tax reduction of 150.125 Euros. Else the after effects are more damaging than beneficial with huge job losses.spiegel..html 9 http://www.5 Around 50% of the original starter is recovered via remanufacturing methods. Remanufacturing helps in conserving energy.com/news/200907/1248950228. viz. independent remanufacturing is expected to be the most cost effective and would have more potential in the future6. Rebuilt engines require only 50% of the energy and 67% of the labor that goes into manufacturing new engines.8 trillion yen (427 billion Euros) for initiatives on old vehicle replacement and subsidies for new vehicle purchases7.jama-english. It has also decided to subsidize interest payments on cars worth up to 600.. and landfill space and reducing air pollution. and higher priced diesel engines would also drive the remanufacturing trend upward.000 rubles instead of 350. In the US itself. Steven J.000 tons of copper and other metals. Skerlos.00.for the launch of Nano. German supplier Robert Bosch had to re-engineer some of the motorcycle parts into Nano parts. But with the stimulus fund drying up by September 2009. Similarly. Russian government has provided subsidized auto loans translating into subsidies on interest payments. governments of all the nations have been implementing a wide range of emergency economic measures including tax incentives. German government provided a USD 7. the growing demand for remanufactured engine control units. Governments of each of the countries have been providing support in its own ways with the sole aim of rejuvenating the lost growth in the sector.com/article/159347-why-american-car-manufacturers-fail IMAP’s Automotive Industry Global Report -. 2009 tax reductions were provided for the purchase of new vehicles meeting defined fuel efficiency and emissions criteria.

com IMAP’s Automotive and Components Global Report .imap..somewhere in the world an IMAP Advisor is closing an M&A transaction Every business day www.2010: Page 25 .

jones@imap.ferrante@imap.com Diego Galiana diego.imap..com Peter Mueller peter. go to www.com For a comprehensive list of IMAP advisors and to discover how IMAP can help you with your M&A transaction.britton@imap.pereira@imap.com Jan Steinbaecher jan.galiana@imap.com Ted Johnston ted.com Armando Fejler armando.com Paul Jones paul.com Brazil Andre Pereira andre.com France Michel Champsaur michel.com Eduardo Rodríguez eduardo.com Toni Ferrante toni.com United States Brad Harse brad.hustler@imap.com United Kingdom Constantine Biller constantine.johnston@imap.com Italy Filippo Avidano filippo.2010: Page 26 .alanko@imap.avidano@imap.com Spain Francisco Asís Gomez Ruiz francisco.steinbaecher@imap.wagner@imap.IMAP’s Industrials Team Argentina Mario Hugo Azulay mario.com Germany Alexander Bolz alexander.com Johannes Eckhard johannes.bolz@imap.gomez@imap.com.com Christoph Kloberdanz christoph.mueller@imap.azulay@imap.com Robert Britton robert.champsaur@imap.harse@imap.rodriguez@imap.fejler@imap.com Jon Hustler jon.com Wolfgang Wagner wolfgang. IMAP’s Automotive and Components Global Report .com Scott Isherwood s.isherwood@imap.eckhard@imap.kloberdanz@imap.com Finland Terhi Alanko terhi.biller@imap.

imap. Let IMAP help you with your M&A project in 2010. 2010  Food & Beverage Industry Global Report. Other industry reports available from IMAP:  Alternative Energy Industry Global Report.2010: Page 27 . IMAP advisors located around the world have successfully completed thousands of M&A transactions. visit the “Industries” page of www.. 2010 For copies.com.Cross-border M&A requires local knowledge and experience. 2010  Computing & Internet Software Global Report. IMAP’s Automotive and Components Global Report .

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