ASIAN AUTOMOTIVE NEW SLETTER JUNE 2011, ISSUE 67 A Quarterly newsletter of developments in the auto and auto components markets Chinese companies are buying up assets offices in all of the major Asian across the Auto sector worldwide. Geely automotive markets, as well as London CONTENTSC O N T E N T S paid US$2.7bn for Volvo in 2010, Joyson and New York. If you are interested in agreed to buy Preh for US$721m in April, discussing any of the articles in this C H I N A 1 Beijing Auto announced plans to acquire newsletter, or how we can help you in H O N G K O N G 4 Inalfa Roof Systems for US$370m in this sector, please contact me directly. I N D I A 4 April, and Zhejiang Youngman and I N D O N E S I A 5 Pangda recently agreed to acquire Saab for US$250m. Expect China to continue J A P A N 5 hunting for foreign assets. K O R E A 5 Charles Maynard M A L A Y S I A 5 Business Development Asia LLC (“BDA”) Senior Managing Director, PHILIPPINES 5 is an investment banking firm which [email protected] specializes in Asian M&A. We have T A I W A N 5 China AutolivAutoliv, the Swedish auto component manufacturer, plans to invest US$10m in a new seat belt plant in Nanjing, China. The new plant will replace Auto Sector Stock Indices (12 months ending 27 Jun11 ))) Autoliv’s existing plant in the region and 210 will be 1.5 times larger than the existing plant. The move is part of the 190 company’s strategy to enhance capacity 170 and market presence in China. 150 April 4, 2011 130 Beijing Auto Works (BAW), the Chinese 110 auto manufacturer, plans to invest 90 US$100m to establish a JV with an 70 undisclosed local manufacturer in Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Russia's Ulyanovsk region. Initially, the JV will focus on assembly of BAW’s B40 CHINA INDIA JAPAN KOREA US Euro utility vehicles and later expand to Source: Capital IQ, BDA include other commercial vehicles. April 14, 2011 Beijing Hainachuan AutAutoooo (BHAP), a subsidiary of Chinese auto manufacturer Beijing Auto Group 2 A SIAN AUTOMOTIVE NEWS LETTER J U N E 2011, ISSUE 6 7 Auto LTM Trading Multiples ((17171717JunJunJunJun11111111)))) Dalian, China. The plant will be Subaru’s second overseas plant after the USA and it will have a capacity of 18.0x 150,000 vehicles. The JV will help Chery 16.1x to improve its brand image and will help 16.0x 14.7x Subaru to establish a presence in the 14.0x growing Chinese auto market. 12.0x 11.1x 11.5x 10.4x 10.4x March 3, 2011 10.0x 8.2x 8.0x 8.0x Dongfeng Peugeot Citroen Auto 5.7x 5.7x 6.0x 4.9x (DPCA), the JV between PSA Peugeot 3.6x Citroen and the Chinese auto 4.0x manufacturer Dongfeng MotorsMotors, has 2.0x agreed to set up its third plant in 0.0x Wuhan, China. The plant will commence China India Japan Korea US EU operations in 2013 and it will enable EV / EBITDA P/E DPCA to increase its domestic capacity Source: Capital IQ, BDA to 300,000 units and expand its product segments in the next five years. May 21, 2011 (BAIC), has agreed to acquire 100% of majority stake in Chinese motorcycle Dongfeng Yueda Kia AutoAuto, the JV the Dutch auto component manufacturer, Jinan Qingqi Motorcycle between Dongfeng Motors and Korean manufacturer Inalfa Roof SystemsSystems,,,, for CoCoCo,Co for US$46m. The acquisition is part auto manufacturer Kia MotorsMotors, plans to US$370m. The acquisition is part of of Jinan’s ongoing restructuring program set up its third plant in Nanjing's BHAP’s international strategy to expand and will provide Changan a significant Jiangning Economic Development Zone. to the global auto components market market share in the domestic The plant will commence operations in and will also help BHAP to further motorcycle market. March 17, 2011 2012 with a capacity of 300,000 diversify its product portfolio, vehicles. The expansion will help the strengthen its R&D and marketing Changan Ford Mazda AutoAuto, a JV company to ease its capacity capabilities. April 30, 2011 between FordFord, Mazda and Chinese auto constraints as domestic sales increase manufacturer Changan AutoAuto, has significantly. March 05, 2011 Beiqi Foton MotorsMotors, the Chinese signed a MoU with the Chongqing commercial vehicle manufacturer, plans government authorities to set up a FAW GroupGroup, the Chinese auto to invest US$400m to build a new plant transmission parts plant for US$350m. manufacturer, plans to invest US$1.5bn in Maharashtra, India. The plant will The plant will commence operations by to establish a R&D center for new commence operations in 2013 with a end of 2013 with a capacity of 400,000 energy vehicles in China. The R&D capacity of 100,000 units, and it will six-speed automatic gearboxes. The center will be responsible for manufacture light, medium and heavy move is part of Ford’s strategy to developing pure and hybrid electric trucks for the domestic market. leverage advanced global technologies vehicles as well as vehicles based on May 04, 2011 to build 15 new vehicles in China by hydrogen and biomass fuel technology. 2015. May 23, 2011 The R&D center will help FAW to develop Beiqi Foton Motors plans to set up a its own brand of new energy vehicles for plant in Kenya, East Africa. The plant Chery AutoAuto, the Chinese auto the domestic markets. April 25, 2011 will commence operations in May 2012 manufacturer and Subaru AutoAuto, the with over 500 employees and capacity auto manufacturing division of Fujian Daimler AutoAuto, the JV between of 10,000 vehicles. April 9, 2011 Japanese transportation conglomerate Daimler AGAG, Fujian Motors and China Fuji Heavy IndustriesIndustries, plan to jointly Motor CorpCorp, has agreed to invest Changan Auto has agreed to acquire a invest US$365m to set up a plant in US$500m to establish a new R&D center 3 A SIAN AUTOMOTIVE NEWS LETTER JUNE 2011, ISSUE 67 in Fujian's capital of Fuzhou by the end of 2011. The R&D center will help Auto LTM Price/Rev Ratios ((17171717JunJunJunJun11111111)))) Daimler increase its localization rate 1.2x and also provide certain testing 1.0x facilities for its vehicles. May 1, 2011 1.0x 1.0x Great Wall MotorsMotors, the Chinese auto 0.8x manufacturer, has signed a MoU with UK based engineering company Ricardo PlcPlcPlc to jointly develop high-end gasoline 0.6x 0.5x 0.5x and diesel engines and 6-speed double 0.4x 0.4x clutch automatic transmissions (DCT) 0.4x for Haval SUV series. The agreement will enable Great Wall Motors to bridge the 0.2x technology gap with its foreign competitors. May 25, 2011 0.0x Source: Capital IQChina India Japan Korea US EU Great Wall Motors has agreed to invest an additional US$640m for the Price / Revenue construction of the third phase of its new plant in Tianjin. It will commence burden. April 13, 2011 PREH to significantly improve its market operations in 2015 with a capacity of position in China. April 12, 2011 300,000 vehicles and will be JAC MotorsMotors, the Chinese auto responsible for manufacturing three manufacturer, plans to establish a Lifan Industrial GroupGroup, the Chinese luxury SUV and five luxury sedan second plant in Anhui province for auto manufacturer, and Effa Group the models. March 11, 2011 US$340m. The new plant will Brazilian importer of Chinese vehicles commence operations at the end of have agreed to jointly set up a R&D Haima AutoAuto, the Chinese auto 2011 with a capacity of 24,000 vehicles center in Brazil for US$70m. The R&D manufacturer, plans to invest US$462m and will be responsible for center will be completed by 2014 and to set up a plant in Zhengzhou, China. manufacturing six different models. will be responsible for developing This will be Haima’s third plant in China May 4, 2011 compact cars and alternative energy and will increase its capacity to over motors primarily for the US market. 200,000 vehicles. The new plant will JiJianghuai AutoAuto, the Chinese auto March 24, 2011 enable Haima to expand its product manufacturer, plans to raise US$426m offering and manufacture subcompacts by issuing an additional 150m shares in Michelin has agreed to set up a JV with and minivans for the domestic market. the open market. The funds would be Chinese tire manufacturer Double Coin May 17, 2011 used to expand the capacity of HoldingsHoldings, a unit of Shanghai Huayi passenger cars and high end gasoline GroupGroup, for manufacturing passenger Haima StockStock, the parent company of engines. March 22, 2011 and light truck tires in China. As per the Haima AutoAuto, has agreed to buy Haima agreement Michelin will acquire 40% Investment Group’s 38% in Haima Joyson Investment HoldingHolding, the stake in Double Coin’s plant under Auto for an undisclosed amount, Chinese auto component manufacturer, construction in Shanghai with a thereby increasing its stake to 100%. has agreed to buy 75% of German auto capacity of 15m tires. April 20, 2011 Due to the ongoing construction of component manufacturer PREH for Haima Auto’s Zhengzhou plant, the US$721m. The acquisition will provide Shanghai VolkswagenVolkswagen, the JV between company has been facing severe strain Joyson access to advance technological Volkswagen Group and Chinese auto on its finances and the funds from the capabilities for electronic controls and manufacturer Shanghai Automotive stake sale would help ease the financial multi-shot processing and will help Industry Corporation (SAIC), plans to 4 A SIAN AUTOMOTIVE NEWS LETTER JUNE 2011, ISSUE 67 set up its sixth plant in Ningbo, Mianyang Huarui Auto for US$14m.