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 Chery 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 Anhui Zhongding with the technology to manufacture high end auto rubber seal components in China 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 2 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 Nissan MotorsMotors, plans to to establish a new plant in Guangdong, 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 3 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 gearboxes in China. JAC had earlier Price / Revenue 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 4 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.