ASIAN AUTOMOTIVE NEW SLETTER

September 201 2, ISSUE 72 A Quarterly newsletter of developments in the auto and auto components markets

Throwing modesty to the wind, the big Business Development Asia LLC (“BDA”) CONTENTSC O N T E N T S news for BDA this quarter was our is an investment banking firm which C H I N A 1 success in advising on six transactions in specializes in Asian M&A. We have I N D I A 2 the last month – one each in China, offices in all of the major Asian India, Japan, Korea, Europe and the US. automotive markets, as well as London J A P A N 4 All but one of these transactions involved and New York. If you are interested in K O R E A 4 an Asian buyer, seller or asset. This discussing any of the articles in this M A L A Y S I A 4 geographic reach demonstrates the scale newsletter, or how we can help you in of M&A activity in the middle market and this sector, please contact us. T H A I L A N D 4 BDA’s expertise in Asia and global reach. See this press release for more details: http://www.bdallc.com/bda_pdf/Grands Charles Maynard lam-press-release-6Sept12.pdf Senior Managing Director, [email protected]

China

BMW Brilliance AutoAuto, the JV between German auto manufacturer BMW and Chinese auto manufacturer Brilliance AutoAuto, plans to establish a new engine Auto Sector Stock Indices (12 mon ths ending 06Sep12 ))) facility in Liaoning province, China. The facility, with a capacity of 200,000 units, will commence operations in 2015 and will manufacture engines for domestic auto OEMs. The financial details were not disclosed. August 06, 2012

FAW MotorsMotors, the Chinese auto manufacturer, plans to invest US$687m to establish a new facility for manufacturing new energy vehicles in China. The facility, with a capacity of Source: Capital IQ, BDA 200,000 units, will commence operations by 2014 and will contain stamping, welding, painting and general assembly halls, as well as auxiliary infrastructure. August 09, 2012

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SEPTEMBER 2012, ISSUE 72 A SIAN AUTOMOTIVE NEWS LETTER

The facility, with a capacity of 50,000 units, will commence operations in 2015. July 14, 2012

Youngman AutoAuto, the Chinese bus manufacturer, has agreed to acquire 74% in Viseon BusBus, a German bus manufacturer, for US$12m. The move will enable Youngman to expand its operations in Europe. August 01, 2012

Wanxiang GGrouprouproup, the Chinese auto component manufacturer, has agreed to acquire 80% of A123 SystemsSystems, the US auto battery manufacturer, for US$450m. The funds would be used to Source: Capital IQ, BDA strengthen the financial position of the A123 Systems. August 09, 2012

Zhejiang Youngman PaPassengerssenger Car Ford Motor announced that it will agreed to acquire Bengbu HaoyeHaoye, a GroupGroup, a Chinese car manufacturer, has introduce Lincoln automobiles to the Chinese filter manufacturer for the agreed to acquire 30% of SpykerSpyker, a Chinese market by 2014. August 28, 2012 aftermarket and local OEMs. August 29, Dutch sports car maker, for US$12.5m. 2012 The companies will setup two JVs, which Ford Motor will begin making its 2.0- will be majority owned by Youngman. liter EcoBoost turbocharged engine in NavistarNavistar, the US truck manufacturer, September 03, 2012 Chongqing next year. The engine plant plans to establish a JV with Anhui AutoAuto, is currently under construction, and a Chinese auto manufacturer, for a total

Ford has earmarked US$600m to build investment of US$284m. The JV, with a capacity of 150,000 engines, will its third assembly plant in Chongqing. August 27, 2012 commence operations by 2013. The JV will promote the technical upgrade and India The Foton Daimler JV has officially enhance the quality of the JAC trucks begun business. The JV is equally and several different Navistar Atul AutoAuto, an Indian three-wheeler owned by truck manufacturer Beiqi Beiqi MaxxForce diesel motors for the manufacturer, plans to invest US$18m Foton and Daimler AG,AG and the Foton Daimler AG Chinese auto market. August 18, 2012 to establish a new facility in Sri Lanka. companies have invested a total of The facility with a capacity of 10,000 US$1bn. The JV hopes that its Auman Volkswagen plans to establish a new units will be operational by 2013 and trucks, now equipped with Mercedes- transmission facility in Tianjin, China for will primarily cater to the Sri Lankan Benz engines, will be able to come to a total investment of US$1.1bn. The market. July 17, 2012 the forefront of the Chinese truck facility will primarily manufacture market. August 30, 2012 DQ380 and DQ500 DSG transmissions Hero MotoCorpMotoCorp, an Indian two-wheeler

for the Chinese auto market. August 20, manufacturer, plans to invest US$71m MANN+HUMMEL,MANN+HUMMEL a leading global MANN+HUMMEL 2012 to establish a new R&D center in expert for filtration solutions and Rajasthan, India. The center will original equipment supplier to the Volkswagen plans to establish an Volkswagen commence operations by 2014 and will international automotive and assembly plant with FAW Group,Group the FAW Group be the largest two-wheeler R&D center mechanical engineering industries, has Chinese auto manufacturer, in Wuhan. in India. July 25, 2012

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Hero MotoCorp plans to invest US$268m to establish two new facilities in Gujarat and Rajasthan. The facilities, with a total capacity of two million units, will commence operations in 2014 and will cater to the growing demand for two wheelers in the domestic market. June 04, 2012

IsuzuIsuzu, the Japanese commercial vehicle manufacturer, plans to invest US$178m to establish a new facility in Andhra Pradesh, India. The facility, with a capacity of 120,000 units, will commence operations in 2015. Isuzu will initially assemble the DMAX trucks Source: Capital IQ and MU7 SUVs for the Indian market. July 19, 2012 established a new R&D center with an up a 50:50 JV with Eicher MotorsMotors, the Krishna GroupGroup, an Indian auto interior investment of US$18m, in Pune, India. Indian two-wheeler manufacturer. The manufacturing company, has formed a The R&D center will enable the JV with an investment of US$50m will JV project with Italy-based Landi RenzoRenzo, Company to undertake in-house design commence operations in 2015 and will a global leader in the alternative fuel and development of engine technology enable Polaris to expand its presence in vehicles sector. The US$13m JV will for its motorcycles and shorten the India. July 25, 2012 address the critical alternative fuel period for new product development. solutions relating to the development July 04, 2012 Sogefi GroupGroup, the Italian auto and creation of advanced technological component manufacturer, plans to systems in clean energy sources. MercedesMercedes----BenzBenz India inaugurated invest US$5m to establish a new facility August 02, 2012 India’s largest workshop for with an in Pune. The facility will manufacture

investment of US$9m. The hangar is stabilizer bars and torsion bars for MahMahindraindra Reva Electric VehiclesVehicles, a spread over 100,000 sq. ft. and has 54 passenger cars and utility vehicles and part of the Mahindra GroupGroup, dedicated bays. August 21, 2012 will initially only cater to Tata Motors, inaugurated its first platinum rated Mahindra & Mahindra, Fiat and Piaggio. automobile manufacturing facility in Nissan plans to acquire a significant July 04, 2012 Bangalore. The facility is the first minority stake in Hover AutomotiveAutomotive, purpose-built, ground-up electric the Indian auto distributor, for an Tata MotorsMotors, the Indian auto vehicle plant in India, the first undisclosed amount. Hover currently manufacturer, plans to set up an manufacturing plant to gain the manages the entire marketing, sales assembly facility for its Jaguar Land prestigious platinum rating from the and dealer development for Nissan Rover vehicles in Brazil, for an Indian Green Building Council and the Motors in India and the acquisition will undisclosed amount. The facility will first plant where cars are initially provide Nissan greater control over its initially assemble JLR’s Freelander powered at the manufacturing site using marketing and distribution activities in model for the Brazilian market. solar power. August 22, 2012 India. July 05, 2012 July 16, 2012

Mahindra Two WheelersWheelers, the Indian Polaris IndustriesIndustries, the US-based off Toyota plans to invest US$90m to two-wheeler manufacturer, has road vehicles manufacturer, plans to set establish a new facility in Karnataka,

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India. The facility will have a capacity of Busan, South Korea. The facility will Thailand 240,000 units of engine castings and produce 80,000 Rogues per year for the

120,000 units of machined parts. The U.S. and other export markets. July 20, move is part of the Company’s strategy 2012 Denso International AsiaAsia, the leading to increase the use of locally Japanese supplier of advanced manufactured parts for its vehicles in SK Innovation and the international automotive technology, systems and components, will invest US$102m in India. June 26, 2012 automotive supplier Continental (Germany) completed a transaction to Thailand next year to expand its auto- Usha Honda Siel Cars India and cooperate on lithium-ion battery parts plant in the Amata Industrial Zone Honda Motor CompanyCompany, after working technology for electric vehicles. The (Bang Pakong) in Chon Buri. The together for 16 years, have agreed to goal of the partnership is to mutually company will initially shift production of end their JV. Accordingly, Honda Motor develop, produce and market lithium- some products from Japan to the plant, has purchased all of the shares that ion battery systems for cars. SK which will manufacture new and USHA held in the JV. August 10, 2012 Innovation will hold a 51% stake in the existing products. new company, Continental 49%. The August 23, 2012 jointly managed company will be

managed from Berlin and R&D work will be conducted in both Germany and Japan Korea. July 23, 2012 Toyota inaugurated a US$600m plant in Sao Paulo, Brazil, its third plant in the country. Toyota’s initial target is to produce 70,000 four-door Etios models at the plant. August 09, 2012 Malaysia

Toyota has announced plans to invest Honda will begin producing hybrid US$495m to build an engine plant in Honda vehicles in Malaysia, starting with the Sorocaba, Brazil. The plant will open in Jazz Hybrid . Honda is investing 2015 and produce engines for Etios and US$113m for the expansion of its Corolla cars. August 08, 2012 facilities necessary to begin production.

The facility will begin production in the

fourth quarter of 2013 and will manufacture 100,000 vehicles annually. Korea Honda will be the first manufacturer to produce hybrid cars in Malaysia. Hyundai has announced that its JV with Currently, its hybrid vehicles are made SichSichuanuan Nanjun AutomobileAutomobile, Sichuan only in Japan and the U.S. July 19, 2012 Hyundai MotorMotor, has started construction on a truck plant in Ziyang, Mazda and Bermaz Motor have begun China. The plant will produce 150,000 talks for a JV production and sales trucks annually and begin production in company in Malaysia. The new JV will 2014. August 29, 2012 see 3,000 units of Mazda CX-5s being assembled per year in Malaysia. Nissan will invest US$160m to launch July 13, 2012 Nissan Rogue production at an under- used Renault Samsung Motors factory in

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Asian Auto Transactions with MuMultiplesltiples (12 months endingending 30Aug130Aug12)2)2)2)

Source: Capital IQ

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A SIAN AUTOMOTIVE NEWS LETTER SEPTEMBER 2012, ISSUE 72

Business Development Asia is an NEW YORK LONDON Euan Rellie, [email protected] Andrew Huntley, [email protected] investment banking firm that Business Development Asia LLC Business Development Asia Ltd advises on cross-border mergers 1270 Avenue of the Americas, Suite 2310 33 Cavendish Square and acquisitions, distressed New York, NY 10020, USA London W1G 0PW, United Kingdom situations, capital raisings and T (1) 212-265-5300 T (44) 20-7182-4518 F (1) 212-265-4300 F (44) 20-7182-4100 restructurings. Our focus is on transactions with an Asian angle or SHANGHAI HONG KONG story, with enterprise values up to Jeffrey Wang, [email protected] Paul DiGiacomo, [email protected] Business Development Asia Co Ltd Business Development Asia (HK) Ltd US$1bn. BDA has nine offices and The Center, #1602, 989 Changle Road Suite 905, ICBC Tower 70 professional staff throughout Shanghai, 200031, China 3 Garden Road, Hong Kong Asia, the U.S. and Europe. For T (86) 21-5407-5580 T (852) 2537-9565 F (852) 2537-4406 further information on BDA’s F (86) 21-5407-5680

services or on any of the articles in BEIJING this newsletter, please contact the TOKYO Charles Maynard, [email protected] Jeff Acton, [email protected] offices listed. Business Development Asia (HK) Ltd Business Development Asia K.K. th Beijing Branch Office Shiroyama Trust Tower, 27 Floor 27 th Floor, Tower C, Office Park, 4-3-1 Toranomon, Minato-ku Charles Maynard 5 Jinghua South St., Tokyo, 105-6027, Japan Senior Managing Director Chaoyang District T (81) 3-3433-5803 Beijing, 100020, China F (81) 5404-8181 [email protected] T (86) 10-8535-0856

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