ASIA IS A BUSINESS IMPERATIVE… NOW MORE THAN EVER ASIAN AUTOMOTIVE NEWSLETTER Issue 42, March 2005 A quarterly newsletter of developments in the auto and auto components markets CONTENTS CHINA INTRODUCTION ................................................ 1 Aisin Seiki Co. has established a JV auto body CHINA ............................................................... 1 parts company in Guangdong Province to serve the INDIA ................................................................ 5 expansion of Toyota's production in China. The INDONESIA ...................................................... 5 new company, Aisin Seiki Foshan Body Parts JAPAN .............................................................. 6 Co will start production in April 2006, serving as KOREA ............................................................. 6 Aisin's 12th production foothold in China. Aisin MALAYSIA ........................................................ 6 owns 55% of the new JV, with two Taiwanese PHILIPPINES .................................................... 6 companies holding the rest. The JV will initially TAIWAN ............................................................ 7 produce electric-powered sun roofs that can be THAILAND ......................................................... 7 provided to 170,000 cars a year. Dec.17, 2004 VIETNAM .......................................................... 8 Autoliv of Sweden, the world's leading maker of airbags and seat belts, will buy the outstanding INTRODUCTION 40% of its Chinese airbag company from partner Shanghai Shengsheng. The purchase price was We hope you find the Asian Automotive Newsletter not disclosed. The Chinese market is becoming informative. key for Autoliv, and the firm has invested in new capacity there by starting a unit to make steering BDA is a corporate finance and advisory firm, which wheels. Dec.17, 2004 assists multinational clients to identify, assess and execute cross-border transactions involving Asia, Bosch will set up its regional headquarters in including acquisitions, divestments, JVs and Shanghai and will invest Euro550m (US$740m) in restructuring. We have offices and professional China in the next three years in factory expansions. staff throughout Asia, and in the US and Europe. The investments will expand Bosch's manufacturing, in particular at two sites in Wuxi If you think that BDA’s services may be useful to and Suzhou, where it makes automotive parts, and you, please contact us at any one of our offices or will double Bosch's total investment in China. email me at [email protected]. Contact Bosch already has 26 ventures in China, with a details for our offices are at the back of this total investment approaching US$600m. Two-thirds newsletter. We look forward to speaking with you of Bosch's Euro1.4bn (US$1.9bn) revenues in China in the future. come from vehicle components, with the rest mainly from industrial automation systems, power tools and domestic appliances. Feb. 25, 2005 Charles Maynard Managing Director Asian Automotive Newsletter Issue 42, March 2005 BorgWarner is planning to set up a wholly-owned DURA Automotive Systems has entered into a manufacturing facility in Ningbo, Zhejiang Province. JV with Shanghai Ganxiang Automotive Mirror BorgWarner will invest US$90m in the new facility Group Co (GAM) to develop, manufacture and sell which will manufacture components for VW 4- automotive gear shift systems for the domestic cylinder engines. BorgWarner's clients in China Chinese market. The new JV, DURA Ganxiang include FAW, Dongfeng, Shanghai VW, FAW VW, Automotive Systems (Shanghai) Co, is majority and Shanghai GM. Jan. 7, 2005 owned and controlled by DURA. The parent companies will contribute assets, IP and technical Dana Corp and Dongfeng Motor Co announced resources. Feb. 9, 2005 that they would form a JV called Dongfeng Dana Axle Co to develop and produce commercial Hyundai MOBIS, a subsidiary of Hyundai Motor vehicle axles in China. The 50/50 JV is expected Company, is negotiating with Tiexi New District of to be completed in Q3. Dana of Toledo, Ohio, will Shenyang, capital of northeast China's Liaoning invest US$60m in an existing Dongfeng subsidiary Province, to build a Hyundai auto part logistics plant to form the JV. It expects to employ 8,000 workers in Shenyang Economic and Technology and expects 2005 sales of US$400m. Dongfeng Development Zone. Hyundai MOBIS plans to spend Motor is a JV between the state-owned Dongfeng US$30m on the project. Mar. 8, 2005 Motor Group and a Chinese subsidiary of Nissan Motor. Mar. 10, 2005 Freudenberg of Germany will increase China investment and expects to triple its sales in China Denso has established its fourth China production within five years. Freudenberg's capacity has grown unit, a wholly owned company named Denso 30% p.a. in China over the past five years. The (Tianjin) Thermal Products, to produce heat German company now has 21 factories and sales exchangers for car air conditioners and radiators in companies in China. Within this year, a new auto Tianjin, northern China. The initial capital will be parts production base built by Freudenberg in ¥6.8bn (US$65m). The factory would mainly supply Changchun, NE China, will be completed. In the HVAC products to Japanese automakers in China meantime, the capacity of its nonwovens facility in but will also try to sell to American and European Suzhou, East China, will also be expanded JVs. By fiscal 2010/11, the new unit is seeking substantially. Freudenberg and its partners' direct annual turnover of ¥13bn (US$125m). Mar. 8, 2005 investment in China has exceeded US$100m, and its sales in China hit US$225m in 2003. Nov. 16, Dongfeng Auto has received government approval 2004 to take a 51% stake in Nissan JV, Zhengzhou Nissan. Dongfeng is to pay Rmb242m (US$29m) Magna International Inc of Canada has signed for a 35% stake in the JV from CITIC Automobile an investment contract in Tianjin, in North China, along with Rmb111m (US$13m) for a 16% stake to build an auto parts factory in the Tianjin Bonded from Zhengzhou Light Vehicle Manufacture Area. Magna will invest US$20m in the new auto Plant. Dongfeng Auto is 70%-owned by Dongfeng parts project. The factory, solely funded by Magna, Motor, a 50/50 JV between Dongfeng Motor and will produce auto moulds and car body punched Nissan. Zhengzhou Nissan makes light trucks and parts, and provide auto parts to car producers in the Paladin SUV. The move signals increasing Beijing and Tianjin. Mar. 8, 2005 cooperation between Nissan and Dongfeng and the consolidation of the Chinese industry amidst Mando Corp, the Korean parts maker, said that it increasing competition, and may herald the merger has commenced construction on a foundry in China of Nissan's two JVs into one company. Jan. 18, to supply cast metal products to its other plants in 2005 the world's fastest-growing auto market. The foundry in Tianjin in Northern China will produce 33,000 tons of cast metal products every year to 2 Asian Automotive Newsletter Issue 42, March 2005 be supplied to the company's plants in other parts venture after the deal closes. Nanjing's share would of China. A total of US$50m will be spent building come out of SAIC's 70% stake. Nanjing Auto is a the foundry. Mando plans to increase its auto parts state-owned auto manufacturer that builds vans and factories in China to more than 10 by 2007. Jan. sedans in China in JVs with Fiat group commercial 12, 2005 vehicle maker Iveco and Fiat Auto. Mar. 7, 2005 Mazda has received Chinese government approval Nishikawa Rubber Co is constructing a second for a new sales and distribution JV with FAW plant in Shanghai that will begin producing rubber subsidiary, FAW Car. The new JV will be autoparts this summer. The second site, which headquartered in Changchun, NE China, and begin will cost ¥500m (US$5m), Nishikawa aims for sales operations in March 2005. FAW Mazda Motor from Chinese operations in 2007 of ¥3.3bn Sales will exclusively distribute Mazda brand (US$32m), triple the ¥1.15bn (US$11m) for 2004. vehicles. The JV will be 70% owned by FAW Car Nishikawa Rubber produces sealing parts for with Mazda taking a 25% stake and FAW 5%. The automobile bodies and window frames in China. new JV is intended to help Mazda expand its sales The existing plant began operations in January 2003 in China. Mazda is aiming to sell and produce and supplies the local operations of Honda and 300,000 vehicles in China by 2010. The Japanese Nissan. Feb. 17, 2005 automaker reported sales of almost 100,000 units in China in 2004. Jan. 17, 2005 Nissan and a local partner will spend US$360m on an engine plant in southern China to help it sidestep Mitsubishi Cable Industries (MCI)’s wholly owned hefty import tariffs on auto parts. The plant, to be subsidiary, Dalian Lingxing Auto Parts Co built in Guangzhou by Nissan and Dongfeng (Dalian Lingxing), has started production in the Automotive Investment, will start up in early 2006 Dalian Export Processing Zone in Liaoning and be run by their JV, Dongfeng Motor Co. Province. MCI, an affiliate of the Mitsubishi Group, Nissan's new factory will supply the company's will invest US$28m into the entity, which will be the plants in the southern boomtown of Guangzhou and R&D and production base of MCI in China. It will elsewhere in China. Capacity is expected to hit produce auto cables, wires, parts and other 360,000 units, with a workforce of 1,500, by 2008. elements. MCI plans to invest US$100m in Dalian Nissan plans to quadruple car sales to 300,000 by Lingxing. Jan. 25, 2005 2007. Dec. 21, 2004 Mitsuoka Motor Co plans to tie up with trading SAIC will pay £200 million (US$385m) for MG Rover. house Sojitz Corp to enter the Chinese market. The amount is far less than the £1bn (US$1.9bn) The automaker will initially market 100 4.5-liter Galue price originally discussed. MG Rover and SAIC luxury sedans a year, targeting China's growing are forming a company that will be 70% owned by wealthy class.