A General Introduction To Automotive Industry In Guangzhou (Canton) Guangzhou Automobile Group Co., Ltd. November 2008

Transcription

1 A General Introduction To Automotive Industry In Guangzhou (Canton) Guangzhou Automobile Group Co., Ltd. November 28

2 1 CONTENTS 1 China Automotive Industry Development 2 Automotive Industry in Guangdong Province 3 Introduction of GAC 4 GAC s Own-brand Project

3 1 China Automotive Industry Development Major Figures Billion RMB GDP of China Added Value of Auto Industry Year Trend of domestic added value of auto industry and GDP from 1995 to 27 Billion Billion RMB Total Output Value Sales Added Value Total Profit Trend of main economic indexes of domestic auto industry from 1995 to 27 Year Rapid economic growth in China provides solid foundation for the booming and continuous development of automobile market. Main indexes of auto industry have been steadily increasing for recent years. Added value of auto industry to the GDP is steadily increasing.

4 1 China Automotive Industry Development 3 Domestic production and sales of motor vehicle in China , vehicles Output Sales Growth rate of output % Growth rate of sales Year Trend of domestic auto output and sales from 1999 to 27 From 1999 to 27, auto industry in China had shown a magnificent growth. Motor Vehicle: In 27, annual sales of motor vehicle reached 8,79, units. The growth rate of motor vehicle sales has also been annually increasing by more than 1% for nine years. * Here the term motor vehicle refers to all kinds of land vehicle as a whole, except motorcycle.

5 1 China Automotive Industry Development 4 Domestic production and sales of passenger car in China 6 1, vehicles Output of sedan Sales of sedan Ratio to automobile output Ratio to automobile sales Year Production/Sales of domestic sedan market in year Passenger car:sales in 26 and 27 were 3,87, and 4,72, respectively. Output and sales of passenger car make up more than 5% of the total auto market. The rate is increasing. Therefore, the passenger car market becomes strategically vital to China automotive industry.

6 2 Automotive Industry in Guangdong Province 5 Economic Status of Guangdong Province Billion RMB GDP of Guangdong Province Ratio to domestic GDP Year % RMB Domestic GDP per capita GDP per capita of Gauangdong province Year GDP of Guangdong province and ratio to domestic GDP from 1995 to 27 GDP per capita of Guangdong province from 1995 to 27 Among the provinces in China, Guangdong (Canton) is economically ranked the first. In 27, it had a GDP of 3,18.44 billion RMB, which made up 12.5% of the whole domestic GDP of China. GDP per capita of Guangdong province is much higher than the domestic one. In 27, GDP per capita of China was 18,934 RMB; GDP per capita of Guangdong province was 33,151 RMB.

7 2 Automotive Industry in Guangdong Province 6 Industrial Development of Guangdong Province 16 Billion RMB Total industrial output value of Guangdong province % 6 3 Billion RMB % Growth rate Ratio to GDP of Guangdong province Total output value Main business sales Added value Ratio Year Industrial GDP of Guangdong province and ratio to total GDP from 1995 to Auto industrial main economic indexes of Guangdong province from 23 to Year Guangdong is also a major industrial province. Its total industrial output value makes up 41%~5% of its GDP. Auto industry of Guangdong province has shown a sound development. Added value of auto industry has steadily increasing its contribution to the total industrial added value.

8 2 Automotive Industry in Guangdong Province 7 Output and Sales of Auto Industry in Guangdong Province , vehicles Output Sales Growth rate of output Growth rate of sales Year % , vehicles Output Sales Output ratio to automobile Sales ratio to automobile Year % Output and sales of auto industry in Guangdong province from 23 to 27 Output and Sales of Sedan in Guangdong Province from 23 to 27 Ratio of output & sales for motor vehicle and passenger car are both more than 98% in Guangdong province. Motor vehicle output of Guangdong province makes up 8.9% of the national one, which is the third in the country. Its passenger car output makes up 12.3% of the national one, which is the second in the country. The proportion of passenger car output to total motor vehicle output is more than 95%. Passenger car production has been the major propeller of Guangdong s auto industry.

9 2 Automotive Industry in Guangdong Province 8 Auto Industry Geography of Guangdong Province Main auto corporations in Guangdong province Summary for year 27 Auto manufacturers 57 where: Passenger car 4(5) Truck 4 Coach 1 Modified vehicle 39 Motorcycle manufacturers 63 Major Component manufacturers 53 Total: 65 Employment population About 2, Passenger vehicle Guangqi Honda *GAC JV Guangqi Toyota *GAC JV Honda (China) *GAC JV GAMC * newly setup 1% own-brand Dong feng-nissan *DF JV Commercial vehicle GAAC * 1% own-brand buses Guangqi Hino Motor Co., Ltd. *GAC JV Main component factory Guangqi Toyota Engine Co., Ltd. *JV Main auto corporations are all located in Guangzhou (Canton), the provincial capital city. Most of them are affiliated with GAC (i.e. Guangqi). Until the end of year 27, there are more than 58 automotive manufacturing companies in Guangdong province (5 of passenger car, 4 of truck, 4 of bus and 39 of modified car); and the auto industry has approximately 2, workers on its payroll. For the time being, JVs with Japanese car makers are dominating the local passenger car production.

10 2 Automotive Industry in Guangdong Province 9 Auto Industry Geography of Guangdong Province Guang zhou Shaoguan Huadu Conghua Development district, Huangpu, Zengcheng Nansha, Panyu Zhaoqing Huizhou Guangzhou Shenzhen Foshan Jieyang Conghua Dong feng-nissan, Guangqi Hino Motor Co., Ltd.and component corporations Fo shan Nanhai Guangqi Honda, Honda (China) and component corporations Zhao qing Auto Component Industrial Park Guangqi Toyota, Guangqi Toyota Engine Co., Ltd., Guangqi Industry Park, component corporations and the own brand GAMC. Zhong shan Auto Component Industrial Park Jiangmen Zhongshan Auto industrial areas around Pearl River Delta with Guangzhou as the center Huadu Guangzhou (Canton) Panyu Huangpu Zengcheng Development district Nansha About 1 component corporations, of which 3 are invested by Japanese capital and 15 by world Top 5 companies. Component industrial areas in Shenzhen and Huizhou Large scale data center and component R&D platform to be set up. Support facilities in Shaoguan and Jieyang 26 corporations including world Top 5 companies and Japanese component companies. Auto industrial areas around Pearl River Delta have been formed, with Guangzhou (Canton) city as the center. Auto industry and component industry are mutually reinforcing and developing there. GAC is playing an important role in Guangdong province as it is the largest manufacturer in the areas and leads the development of surrounding automobile and component industry.

11 3 Introduction of GAC 1 Profile Guangzhou Automobile Group Co., Ltd. (hereinafter "GAC") is integrally converted into a joint stock company from the former limited liability company on June 28th, 25. Shareholders GAC was initiated by Guangzhou Automobile Industry Group Co., Ltd., Wanxiang Group Corporation, China National Machinery Industry Corporation, Guangzhou Iron & Steel Enterprises Group and Guangzhou Chime-Long Hotel Co., Ltd.

12 3 Introduction of GAC 11 Leaders Mission Zhang Fangyou Chairman of the board Zeng Qinghong President To develop into a preeminent international enterprise and a trustworthy public company. Core Values Guideline Humanity, Credibility, Creativity Respect human nature, Advocate communication. Work diligently, Improve efficiency. Operate practically, Utilize resources reasonably. Cooperate with credibility, Innovate with enthusiasm.

13 3 Introduction of GAC 12 Main Business Passenger Car Technology R&D Commercial Vehicle GAC Financial Investment Components Service & Trade

14 GAC 3 Introduction of GAC 13 Technology R&D GAEI Financial Investment China Lounge Investment Ltd. TFGL Service & Trade GAIB GABC GACC Component GTEC Guangqi Hino Directly Invested Companies Commercial Vehicle Passenger Vehicle Motor Co., Ltd. GAAC Honda (China) Guangqi Toyota Guangzhou Honda GAMC

15 3 Introduction of GAC 14 Company Status 12 1 Billion Total Industrial Output Value 6 5 1, vehicles Output Sales Sales Industrial Added Value Year Year Main economic indexes of GAC from 23 to 27 Auto output and sales of GAC from 23 to 27 In 27, GAC s vehicle output and sales were both around 514, units, and its Gross Industrial Output Value and sales revenue ware 12.9 & 18.8 billion RMB (rated the 4 th in China auto industry), its total aftertax profit was 12.5 billions RMB, continuing as one of the top three in China auto industry, while profitability (i.e., the profit/sales ratio) still ranked as NO.1. In 27, Gross Industrial Output Value of GAC s component sector was 12.5 billion RMB, the related profit reached a historic height of 1.71 billion RMB.

16 3 Introduction of GAC 15 Component Sector of GAC 14 Billion RMB Guangzhou Automobile Group Component Co., Ltd (GACC) Sales Established Time:28th August, 2 6 Investors:GAC 51% 4 Jun Feng Development Co., Ltd. 49% Directly Invested Enterprises: 14 Sales of GACC in 27 achieved 12.5 billion RMB. It is forecasted to reach 13.2 billion RMB in F Sales of GACC from 2 to 28 Year Products: 1)Seats Assembly 2)Air Conditioning System 3)Automobile Lamps and Lanterns Assembly 4)Sound Insulator and Other Body Interior System Related Production 5)Tyre assembly 6)Automobile Springs 7)Molten Aluminum/Aluminum Alloy Ingot 8)Shock Absorbers, Steering Gear 9)Wiper Assembly/Motors

17 3 Introduction of GAC Diectly Invested Auto-part Enterprises by GAAC Know-how technology support, stable compatible relationship, and promising prospect NO. Corporation Established Time Product 1 Guangzhou TS Automobile Interior System Co., Ltd. Jul-1 auto seats and interior decoration parts 2 Guangzhou TSK Auto Parts CO., Ltd. Sep-99 door decoration board 3 Guangzhou Stanley Electric Co., Ltd. Sep-2 auto lights 4 Guangzhou Denso Co., Ltd. May-3 a/c systems radiators 5 Guangzhou Hua De Automobile Spring CO., Ltd. Dec-93 suspension spring and value spring 6 Guangzhou Linjun CO., Ltd. Apr-4 car carpets 7 Guangzhou Bridgestone Chemical Products CO., Ltd. Jul-4 seat cusion, headset 8 Guangzhou Aluminum Smelting Technology CO., Ltd. Aug-4 molten aluminum and ingots 9 Guangzhou Intex Automotive Interior Parts CO., Ltd. Sep-4 seat assembly,interior system 1 Central Motor Wheel of Guangzhou CO., Ltd. Feb-5 aluminum alloy wheel 11 Guangzhou Parker Auto Parts CO., Ltd. Aug-5 sounds/heat insulators 12 Guangzhou Tech Interior Trim Manufacturing CO., Ltd. Dec-5 seat covers 13 Guangzhou Showa Autoparts Co., Ltd. Nov-94 motor shock absorber, auto shock absorber and power steering 14 Guangzhou Mitsuba Electric Co., Ltd. Nov-99 windshield wiper, start motor

18 3 Introduction of GAC 17 Operating Status of GAC in Year 27 For the 11 main indexes indicating company s operating status issued by the Chinese auto guild, GAC has kept 1 of them on top 3, among the 16 major automobile corporations in China. GAC is rated the 4 th in Top 5 Companies of China. Percentage: % Profit/Cost ratio Current asset turnover ratio Contribution ratio of total asset Net asset ratio Sales revenue ratio Asset added ratio Preservation ratio of assets Rate Liability/Asset ratio 3 Unit:1, All-personnel labor productivity 1 Unit: Points GAC Industrial economic profit aggregative index 1 Average

19 3 Introduction of GAC 18 11th Five-Year Strategic Goal Top 4 of domestic auto industry Top 5 companies in China Top 2 Top 5 companies of the World GAC To become one of the top 5 companies in the world; to become one of the top 2 companies in China; to become a large-scaled, market-oriented and international corporation. Automobile output to reach more than 1,, units yearly Around 21 Sales revenue to exceed 2 billion RMB yearly Own-brand sedan to be put into the market

20 4 GAC s Own-brand Project 19 Independent R&D Missions Own-brand passenger car will be put into production before the end of 21. To build up three platforms: R&D platform: obtaining the R&D ability for complete passenger vehicle. Product platforms: establishing own-brand passenger car and powertrain platforms, and strengthening own-brand commercial vehicle platforms. Manufacturing platform: large-scale production base for own-brand passenger car. To form the capability of developing and producing series of GAC s own-brand vehicles and powertrains within next ten years, to develop the core competences for developing all kind of automotive products demanded by the domestic and international markets.

21 4 GAC s Own-brand Project 2 Own-brand Car Project Total Investment:6.8 billion RMB where:factories 3.8 billion RMB R&D base 3 billion RMB N Production Scale: Complete vehicle: first phase: 1, per year second phase: 2, per year Engines: first phase: 1, per year second phase: 25, per year Shareholders:1% held by GAC GAMC Plants GAEI new R&D base R&D:GAC Automotive Engineering Institute (GAEI) Location:Industry district in Panyu,Guangzhou Land for Plants :1,19, m 2 Land for R&D base :25, m 2 Plant completion:29 Time for SOP:2nd half 21

22 4 21 GAC s Own-brand Project Own-brand Car Project 广州 Guang zhou 澳门 香港

23 4 GAC s Own-brand Project 22 R&D Achievements

24 4 GAC s Own-brand Project 23 General Guidelines for Choosing Suppliers The fast development of GAC, in particular the development of own-brand passenger cars, has created good opportunities for auto component suppliers and engineering development companies, at home or abroad, to mutually benefit. General guidelines for choosing suppliers (GAC own-brand passenger car project): Experienced in auto component production along with advanced and appropriate technology; For components required for national compulsory certifications (or homologations), having the ability to pass such compulsory certifications; Having product development (co-design) capability for specific auto-part; Cost effective Quality assurance means, e.g. certification of ISO Quality System - ISO 9:2 Supplying ability, such as delivery radius and transport modes, etc. The modes of cooperation can be flexible, including sole proprietorship investment, joint-venture, technical cooperation or transfer and offshore purchasing, etc.

25 4 GAC s Own-brand Project 24 Flowchart for Choosing Suppliers Component procurement plan and list Preliminary list of Candidate suppliers Evaluation of candidate suppliers On-site evaluation? On-site evaluation Written evaluation Issue evaluation notice Provide technical information to candidate suppliers Report and check of bargaining result Propose the supplier to undertake No No Sign relevant contracts Manufacture preparation by supplier Manufacture Preparation finished? Mass production acknowledgement Passed? Yes Yes No Passed? Yes Submit finish report of product development Issue notice of qualified suppliers and components Sign product procurement contract Set up monthly order plan Overall evaluation of candidate suppliers No Qualified? Apply for trial assembly Organize bulk supply No Qualified? Yes Yes Issue notice to the undertaking supplier Batch trial assembly Submit trial assembly result Daily management of supplier

26 25 THANK YOU for your attention!