ASIAN AUTOMOTIVE NEW SLETTER

SEPTEMBER 2011, ISSUE 68 A Quarterly newsletter of developments in the auto and auto components markets

This quarter it was the turn of CITIC automotive markets, as well as London Dicastal and Motherson Sumi to make and New York. If you are interested in CONTENTSC O N T E N T S major western acquisitions, of KSM discussing any of the articles in this Castings and Peguform respectively. newsletter, or how we can help you in C H I N A 1 Greenfield investments also continued at this sector, please contact us. H O N G K O N G 3 a rapid pace, with planned investments I N D I A 3 announced by in Argentina, Brazil I N D O N E S I A 4 and Venezuela; Changfeng in South Africa; and Bajaj in Indonesia. J A P A N 4

K O R E A 5 Business Development Asia LLC (“BDA”) Charles Maynard Charles Maynard M A L A Y S I A 5 is an investment banking firm which Senior Managing Director, Senior Managing Director, [email protected] T A I W A N 5 specializes in Asian M&A. We have [email protected] +1 212 265 5300 offices in all of the major Asian +1 212 265 5300

China

Anhui Zhongding Sealing PartsParts, a Chinese auto component manufacturer, has agreed to acquire 100% of Cooper Products Inc.Inc., a US based auto Auto Sector Stock Indices (12 months ending 29Sept 11)11)11) component manufacturer, for US$10m. The acquisition will provide Zhongding with the technology to manufacture high end auto rubber seal components in and USA. July 22, 2011

Baidu IncInc, the Chinese search engine provider, has signed an agreement with BMW to jointly develop onboard search engine systems for vehicles in China. The Baidu equipped vehicles will enable car owners to access all information regarding maps, emails, news and Source: Capital IQ, BDA music. August 10, 2011

Beijing Benz Daimler CChryslerhrysler Automotive (BBDC), the JV between Daimler AG and Beiqi AutoAuto,,,, the Chinese auto manufacturer, has signed

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A SIAN AUT OMOTIVE NEWSLETTER SEPTEMBER 2011, ISSUE 68

Auto LTM Trading Multiples ((29292929SepSepSep11111111)))) Chery’s A1 and A13 compact vehicles for the Brazilian auto markets. July 21, 2011

18x Chery AutoAuto, plans to invest US$20m to 16.1x establish a new plant in Venezuela. The 16x 14.6x plant will begin operations in 2012 with 14x a capacity of 20,000 vehicles and will 12x 11.1x enable Chery to establish its presence 10.2x 10x 9.1x in the Venezuelan auto market. 7.8x June 02, 2011 8x 7.3x 6.0x 6x 4.6x 4.1x 4.0x 4.3x Continental AGAG, the German tire 4x manufacturer, plans to invest US$262m 2x to establish a new plant in Hefei. The plant, with a capacity of 4m units, will 0x primarily cater to the high-performance China India Japan Korea US EU premium and medium passenger Source: Capital IQ, BDA EV / EBITDA P/E vehicle segments in China and Asia. May 25, 2011

Citic DicastalDicastal, a Chinese auto wheel an agreement with MercedesMercedes- ---BenzBenz Changfeng MotorMotorssss, a Chinese auto manufacturer, has agreed to acquire China to jointly manufacturer the GLK manufacturer, plans to invest US$142m 100% of KSM CastiCastingsngsngs, a German auto SUV and set up a jointly owned sales to establish a new plant in South Africa. component manufacturer, for US$420m. company in China. BBDC and The plant will begin operations in 2013 The acquisition will enable Citic to Mercedes-Benz China are Daimler AG's and will manufacture the Amandla and expand its manufacturing capabilities in two sales avenues in China and the Ses Buyile taxis for the African market. the chassis, power train and auto body agreement will help Daimler improve its June 22, 2011 parts segments. July 07, 2011 competitive position in the country. August 11, 2011 China Auto Parts & Accessories Dongfeng NissanNissan, the JV between Capital (CAPACH), a government owned Chinese auto manufacturer Dongfeng BeiqBeiqii FotonFoton, the Chinese auto Chinese holding company, agreed to Motors and Japanese auto manufacturer, plans to invest US$184m acquire 100% of Century AutoAuto, a US manufacturer MotorsMotors, plans to to establish a new plant in , based auto component manufacturer, invest US$560m to establish its second China. The plant, with a capacity of for an undisclosed amount. July 10, 2011 engine manufacturing plant in 20,000 vehicles, will primarily Zhengzhou, China. The plant with a manufacturer new energy vehicles and Chery AutoAuto, the Chinese auto capacity of 520,000 vehicles will auto components for the Chinese manufacturer, plans to invest US$170m manufacture the HR , MR and VQ series market. May 25, 2011 to establish a new plant in Argentina. of engines. The move is part of the The plant, with a capacity of 70,000 Company’s strategy to increase Changan SuzukiSuzuki, the JV between vehicles, will help Chery cater to the localized production in China. Chinese auto manufacturer Changan growing demand for vehicles in August 05, 2011 Motors and Japanese auto Argentina and Brazil. July 26, 2011 manufacturer Suzuki MotorsMotors, plans to GAC GroupGroup, a Chinese auto invest US$775m to establish a new Chery AutoAuto¸ plans to invest US$400m manufacturer, and Fiat have agreed to plant in Chongqing, China. The plant to establish a new plant in Brazil. The jointly establish a new plant for will begin operations in 2013 with a plant will begin operations in manufacturing DSG transmission capacity of 150,000 vehicles and September 2013 with a capacity of gearbox systems in China. The plant 150,000 engines. July 22, 2011 150,000 vehicles and will manufacture will begin operations in 2013 and will

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A SIAN AUTOMOTIVE NEWS LETTER SEPTEMBER 2011, ISSUE 68 supply gearbox systems primarily for Fiat vehicles in China. As per the Auto LTM Price/Rev Ratios ((29292929SepSepSep11111111)))) agreement Fiat will invest US$337m in 0.9x 0.8x the plant. June 22, 2011 0.8x 0.8x

0.7x Henan Zhongyuan Engine FittingsFittings, a Chinese auto component manufacturer, 0.6x plans to raise US$85m from a group of 0.5x 10 undisclosed investors through a 0.4x 0.4x 0.4x private placement. The funds raised will 0.4x 0.3x be used to expand Zhongyuan’s 0.3x operations in China. August 17, 2011 0.2x

JAC MotorsMotors, a Chinese auto 0.1x manufacturer, plans to invest US$4.6m 0.0x to establish a new R&D center for China India Japan Korea US EU developing DCT automatic transmission Source: Capital IQ Price / Revenue gearboxes in China. JAC had earlier agreed to jointly develop the transmission gearboxes with Navistar InternationalInternational, a US auto manufacturer, Hong Kong production capabilities in China. July 22, 2011 but has not yet obtained the technology from Navistar and decided to Adwin InvestmentsInvestments, the Hong Kong independently begin research in China. based subsidiary of Chinese auto July 22, 2011 manufacturer Brilliance AutoAuto, has

agreed to acquire 50% of Mianyang India SAIC MotorsMotors, the Chinese auto Xinchen EngineEngine, a Chinese auto engine manufacturer, plans to invest US$3.4bn manufacturer, for US$56m. July 11, 2011 Atul AutoAuto, an Indian auto manufacturer, to develop its own brand of vehicles in plans to invest US$44m to establish a China. The Company initially plans to new plant in Gujarat, India. The plant introduce plug-in electric hybrid BYD AutoAuto, the Chinese auto will begin operations in 2012 with a vehicles by December 2012 and also manufacturer, and the Hong Kong Auto capacity of 24,000 vehicles and will establish a new R&D facility to boost its Parts Industry AssociationAssociation, have primarily manufacture light commercial research capabilities in China . agreed to set up a new R&D center in vehicles for the domestic market. August 26, 2011 July 13, 2011 Hong Kong. The center will be responsible for developing electric Shanghai GMGM, the JV between GM and vehicle technology for the Asian auto Bajaj AutoAuto, an Indian two wheeler Chinese auto manufacturer Shanghai market and will also develop zero- manufacturer, plans to invest US$220m AutoAuto, plans to invest US$1bn to expand emission vehicles for Hong Kong’s to establish its fourth plant in Gujarat, capacity at its plant in Shenyang, China. India. The plant, with a capacity of public transit systems. August 18, 2011 The expansion will increase Shanghai 500,000 vehicles, will manufacture two

GM’s total capacity to 300,000 vehicles wheelers, three wheelers, and develop and 450,000 engines, and will help Morgan Stanley Private Equity Asia has agreed to invest US$100m for an a low cost passenger vehicle in ease the current capacity constraints collaboration with Nissan- Nissan -RenaultRenault. The undisclosed minority stake in China XD Nissan --Renault faced by the Company. July 07, 2011 move will help ease the current capacity PlasticsPlastics, a Chinese auto component manufacturer. China XD Plastics will use constraints faced by the Company. July 20, 2011 the funds to expand and upgrade its

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A SIAN AUTOMOTIVE NEWS LETTER SEPTEMBER 2011, ISSUE 68

BoschBosch, the German auto component manufacturer, plans to invest US$670m manufacturer, plans to invest US$550m to establish two new facilities in India. to expand its rail systems and auto The facilities will have a capacity of Indonesia components capacity across its existing 250,000 vehicles each and will focus on facilities in Coimbatore, Jaipur, manufacturing new models in the small Bajaj AutoAuto, plans to invest US$150m to Bangalore and Nashik. The Company car segment for the global auto market. establish a new assembly plant in also plans to establish two new July 27, 2011 Indonesia. The plant will begin facilities, one each in Gujarat and operations in 2013 with a capacity of Maruti Suzuki plans to invest US$1.3bn Chennai, to manufacture electrical Maruti Suzuki 100,000 vehicles. The plant will help to establish a new plant in Gujarat. The devices for the Indian auto market. increase localization of assembly June 03, 2011 plant with a capacity of 2,000,000 operations and reduce the cost of

vehicles will primarily cater to the import tariff. The plant will be Bajaj Continental AGAG, the German tire export markets. The Company currently Auto’s first major plant outside of India. manufacturer, plans to invest US$74m exports a majority of its vehicles from August 23, 2011 to establish a new unit at its Modipuram the port of Gujarat and the plant will plant in India to manufacture radial tires enable them to lower its transportation AutoAuto, the Chinese auto for passenger and commercial vehicles and logistics cost. June 01, 2011 manufacturer, plans to invest US$2bn by 2013. August 25, 2011 to establish a new plant in Indonesia. Motherson SumiSumi, an Indian auto The plant will begin operations in 2014 Eicher MotorsMotors, an Indian auto component manufacturer, has agreed to with a capacity of 30,000 vehicles and manufacturer, plans to invest US$78m acquire 80% of Peguform and 50% of will enable the Company to cater to the to establish a new plant for Die WethjeWethje, two German auto growing demand for vehicles in the manufacturing two wheelers in Chennai component manufacturers, for APAC region. August 04, 2011 India. The plant will begin operations in US$205m. The acquisitions will enable 2013 with a capacity of 150,000 vehicles Motherson Sumi to expand its General Motors plans to invest and will manufacture the Royal Enfield capabilities in the auto interiors and US$150m to revive the operations of its motorcycles for the global auto markets. exterior component segments in plant in Indonesia. The plant will begin The plant will ease the current capacity Europe. July 13, 2011 operations in 2013 with a capacity of constraints faced by the Company. 40,000 vehicles and will cater to the July 12, 2011 Peugeot CitroenCitroen, the French auto demand for vehicles in the Southeast

manufacturer, plans to invest US$900m Asian region. August 11, 2011 Ford plans to invest US$900m to to establish a new plant in Sanand, establish a new plant in Sanand, Gujarat. The plant will begin operations Gujarat. The plant will begin operations in 2014 with a capacity of 300,000 in 2014 with a capacity of 240,000 vehicles and will manufacture the 508 vehicles and 270,000 engines. Luxury Sedan and 207 Hatchback. The Japan July 29, 2011 plant will help Peugeot re-establish its

presence in the Indian auto market. JBM AutoAuto, an Indian auto component September 01, 2011 Asahi Tec CorpCorp, the Japanese auto manufacturer, plans to invest US$44m component manufacturer, has agreed to to expand its capacities at its existing Toyota MotorsMotors, plans to invest acquire an additional 19% of plants in Chennai, Pune and Sanand in US$370m in its existing plant in Guangzhou Wheelhorse Asahi India. The move is aimed to meet the Karnataka to double its capacity from AluminiumAluminium, a Chinese auto wheel growing demand for auto components the current 160,000 vehicles to 320,000 manufacturer, for US$47m. The from its key customers: Nissan MotorsMotors, vehicles by 2013. The move is aimed to acquisition is part of Guangzhou MMMahindraMahindra &&& MMMahindra Mahindra and Tata meet the growing demand for Toyota Wheelhorse’s strategy to raise funds to MotorsMotors. August 23, 2011 vehicles in the Indian auto market. expand its operations in China. Post- July 27, 2011 acquisition, Asahi will hold 49% of Maruti SuzukiSuzuki, an Indian auto Guangzhou Wheelhorse. July 15, 2011

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A SIAN AUTOMOTIVE NEWS LETTER S E P TEMBER 2011, ISSUE 68

EKK GroupGroup, a Japanese auto component plant in the Walbrzych Special manufacturer, has agreed to acquire Economic Zone in Poland. The plant will 100% of Actuator ComponentsComponents, a manufacture braking systems, steering German auto component manufacturer, columns and suspension components for an undisclosed amount. The for European auto manufacturers. acquisition will enable EKK Group to July 27, 2011 establish its presence in the European auto actuators segment. July 01, 2011 The Korean Government plans to invest US$65m in a consortium led by JVC KenwoodKenwood, a Japanese auto Hyundai MotorsMotors, to develop electric electronics manufacturer, has agreed to vehicles in Korea. The project will begin acquire 51% of Shinwa InternationalInternational, a operations in 2014 and has the goal of Hong Kong based auto electronics making Korea one of the top three manufacturer, for an undisclosed electric vehicles market globally. amount. The acquisition will enable JVC August 10, 2011 to expand its presence in the audio and video systems segment of the Chinese auto industry. June 10, 2011 Malaysia Nissan MotorsMotors, has agreed to acquire 25% of AvtoVazAvtoVaz, a Russian auto Chery AutoAuto, the Chinese auto manufacturer, for US$1bn. RenaultRenault, the manufacturer, plans to establish a new French auto manufacturer, already owns assembly plant in Malaysia with a 25% of AvtoVaz. The company has capacity of 5,000 vehicles. The plant stated that post-acquisition the will enable Chery to meet the growing Renault- Nissan-AvtoVAZ alliance will be demand for its QQ3 models in Malaysia the third largest auto group globally. and help ease the current capacity June 16, 2011 constraints. May 30, 2011

Toyota MotorsMotors, the Japanese auto manufacturer, has agreed to acquire the remaining 44% stake of Toyota Auto Taiwan Body and 49% of Kanto Auto WorksWorks, two Japanese auto component BoschBosch, the German auto component manufacturers, for a total of US$1.4bn. manufacturer, has agreed to acquire The move is part of the Company’s 100% of the equity of Unipoint ElectricElectric, strategy to revamp its manufacturing a Taiwanese auto component operation in Japan, improve efficiency manufacturer, for an undisclosed and strengthen its competitive position amount. The acquisition will strengthen in the global auto markets. July 13, 2011 Bosch’s global aftermarket presence in automotive starters, alternators and wiper blades. August 11, 2011

Korea

Mando CorporationCorporation, a Korean auto component manufacturer, plans to invest US$145m to establish a new

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A SIAN AUTOMOTIVE NEWS LETTER SEPTEMBER 2011, ISSUE 68

Asian Auto Transactions with Multiples (12 months ending 29 Sept 2011)

Announce Target Acquirer Deal Percentage EV / EV / Target Name Acquirer Name P/E Date Country Country Value Acquired EBITDA Revenue Jiangsu Songlin Automobile 16-Aug-11 China Tianrun Crankshaft China $31.3 51% - 0.8x - Parts

29-Jul-11 AutoV Corporation Bhd Malaysia Temasek Formation Sdn Bhd Malaysia $48.5 100% 11.6x 1.3x -

13-Jul-11 Kanto Auto Works Japan Toyota Motor Japan $376.0 50% 5.0x 0.2x -

7-Jul-11 KSM Castings Gmbh Germany Citic Dicastal China $420.0 100% 0.7x - -

12-Apr-11 Sammok Kang Up Korea Youngheung Iron & Steel Korea $25.0 100% - 0.6x -

16-Dec-10 Hero Honda Motors India Hero Investments India $843.0 26% 5.8x 0.9x 18.0x

19-Aug-10 Siam Pan Group PCL Thailand Investor Group Thailand $10.8 69% 0.4x 0.1x 3.9x

29-Jul-10 MITSUBA-WALBRO INC Japan TI Automotive Holdings Ltd UK $8.6 50% - 0.4x 25.0x

19-Jun-10 Hubei Axle Co China Investor Group China $7.5 28.5% - 0.4x 399.4x

6-Apr-10 Automotive Stamping Tech Korea JetTech Ltd Korea $8.0 51% - 0.7x 12.3x

1-Apr-10 Interhides PCL Thailand Ongart Thumrongsakunvong Thailand $7.1 20% 3.7x 0.9x 4.7x

8-Feb-10 Cuzco LBE Co Korea A-motion Co Korea $34.3 24% 12.4x 1.0x 20.3x

1-Feb-10 Hwa Fong Rubber(Thailand)PCL Thailand Mega Intl Coml Bank Co Taiwan $13.4 32% 4.3x 0.7x 12.1x

1-Feb-10 MAT Co Korea Sejin Electron Inc Korea $13.7 33% - 0.2x -

9-Dec-09 Suzuki Motor Corp Japan Volkswagen AG Germany $2,527.4 20% 6.2x 0.4x 39.0x

14-Oct-09 Hyundai Corp Korea Hyundai Heavy Inds Co Korea $201.9 50% 12.1x 0.2x 44.9x

12-Oct-09 Dual Industrial Co Korea IHC Co Korea $6.4 36% - 0.5x -

Median $25.0 49.6% 5.4x 0.5x 19.2x

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A SIAN AUTOMOTIVE NEWS LETTER SEPTEMBER 2011, ISSUE 68

NEW YORK LONDON Business Development Asia is an Charles Maynard, [email protected] Andrew Huntley, [email protected] investment banking firm which Euan Rellie, [email protected] Business Development Asia Ltd assists multinational companies in Business Development Asia LLC 33 Cavendish Square expanding their businesses in Asia 1270 Avenue of the Americas, Suite 2310 London W1G oPW, United Kingdom through acquisitions, divestments, New York, NY 10020, USA T (44) 20-7182-4518 T (212) 265-5300 F (44) 20-7182-4100 JVs, and capital raising. For further F (212) 265-4300 information on BDA’s services or on SHANGHAI HONG KONG any of the articles in this newsletter, Jeffrey Wang, [email protected] Paul DiGiacomo, [email protected] please contact the offices listed. Business Development Asia Co Ltd Business Development Asia (HK) The Center, #1602, 989 Changle Road Suite 905, ICBC Tower Shanghai, 200031, China 3 Garden Road, Hong Kong T (86) 21-5407-5580 T (852) 2537-9565 F (86) 21-5407-5680 F (852) 2537-4406

Charles Maynard SEOUL TOKYO Senior Managing Director Heejun Yang, [email protected] Jeff Acton, [email protected] Business Development Asia [email protected] Business Development Asia K.K. 21 Floor, S-Tower Shiroyama Trust Tower, 27 th Floor 116 Sinmunno 1-Ga, Jongno-Gu 4-3-1 Toranomon, Minato-ku Jordan Selleck, Analyst Seoul, 110-061, Korea Tokyo, 105-6027 T (82) 2767-2730 T (81) 3-3433-5803 [email protected] F (82) 2757-2702 F (81) 5404-8181

MUMBAI BAHRAIN Arun Bagchi, [email protected] Ahmed Al Balooshi, [email protected]

Business Development Asia Business Development Asia 898 Notan Plaza, Suite 4A Meral Building #2572, Road #2833 Turner Road, Bandra (West) 4th Floor, Office #42, Block #428 www.bdallc.com Mumbai, 400050, India PO Box 30295, Seef District [email protected] T (91) 22-2643-0290 Kingdom of Bahrain F (91) 22-2643-0291 T (973) 1758-1336 F (973) 1758-1483