fakta om fordonsindustrin - china

1

THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY

CHINA

Fact Pack

Swedish Trade Council in China

2006

2

Overview Chinese Manufacturing Industry

Chinese Automotive Industry

Chinese Construction Equipment Industry

Recommendations

References

CONTENT

3

0 500 1000 1500 2000 2500

ElectricalMachinery

Chemicals

Automotive

Ferrous Metals

CommunicationEquipment

• The total turnover of the Chinese manufacturing industry is SEK 15,107 billions.

• the Swedish manufacturing industry’s turnover is SEK 1,357 billions.

• There are approximately 203 000 companies within the manufacturing industry in China-56 million employees

• The automotive industry has good growth prospects. The main reasons are low labour costs, expected quality improvements, low car ownership rates and a rapidly growing economy with increased personal incomes.

• The average wage for an industry worker in China is SEK 5.2 per hour

5 largest manufacturing industries in China

Billion SEK

The automotive industry amount to 8 % of the total manufacturing industrySource: China statistical yearbook 2005, China Machinery Industry Federation, Automobile Component Industry Trends Report

CHINESE MANUFACTURING INDUSTRY IS 11 TIMES LARGER THAN THE SWEDISH - the automotive sector has good growth prospects

4



Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

5

THE CHINESE SALES OF CARS AND COMMERCIAL VEHICLES TOTALS SEK 508 BILLION 2004- the automotive industry grew more than 12 % 2004

0

500

1000

1500

2000

2500

2000 2001 2002 2003 2004

Domestic Export

Engines SEK 31 billion

Special vehicles

SEK 62 billion

Accessories of automobiles and motorcycles SEK 182 billion

Billion SEK Sales of automotive industry products in China

Source: China Automobile Industry yearbook 2005, China Statistical Yearbook 2005

Cars and commercial vehicles SEK 508 billion

Motorcycles SEK 64 billion

The automotive industry has been growing steadily

6

5.8 MILLION VEHICLES ARE PRODUCED IN CHINA- 2.78 million passenger cars and over 3 million commercial vehicles

VEHICLE MANUFACTURERS

7 manufacturers FAW Group Jie Fang Shanghai Automotive

Industry Corp (SAIC) Chang’an Dongfeng Motor Co. (DFM) Beijing Automotive Industry

Holding (BAIC) Hafei Changhe-Suzuki

LIGHT TRUCKS(1,150,000 vehicles)

6 manufacturers FAW SAIC Chang’an DFM Xiamen King Long Changhe-Suzuki

BUSES( 1,170,000 vehicles*)

HEAVY TRUCKS(700 000 vehicles*)

7 manufacturers FAW DFM SAIC China National Heavy

Duty Truck (JV Volvo) BAIC Shaanxi Automotive Group Qing Ling Auto Group

COMMERCIAL VEHICLES (5,800,000 vehicles)

PASSENGER CARS(2,780,000 vehicles)

30 manufacturers FAW Group

(JV,Volkswagen,Toyota) SAIC (JV GM, Volkswagen) Chang’an (JV Ford) DFM (JV Nissan) BAIC (JV Honda, BMW,

Hyundai) Guangzhou Automobile

Industry Group (JV Honda& Toyota)

Brilliance (JV BMW)

, China automotive industry Yearbook 2005 www.eiu.com,, www.chinabuses.com, www.globalautoindex.com, csm worldwide

Many groups hold joint ventures with foreign players

• China’s vehicle production is projected to grow at 15% per annum to hit 8 million vehicles in 2008.

7



Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

8

THE PASSENGER CAR PRODUCTION IN CHINA IS GROWING FAST -About 4 million passenger cars were produced in 2005

Passenger car production grew up by ”million” for the last five years. More and more international automotive

manufactures march into Chinses market by set up producion JVs with the Chinese manufacturers.( Volkswagen with FAW and SAIG, Honda and Toyato with GAIG, DFM and Nissan, Ford with ChangAn, etc.)

More private or collective capitals invested into automotive industry to manufacture self-owned brand automotives, such as: Chery, Great Wall and Geely,etc.

0

1000000

2000000

3000000

4000000

5000000

6000000

2001 2002 2003 2004 2005

Passenger Car Production in China Development the last 5 years

Vehicles

Source: Report and Statistics from China Automotive Industry Association

9

Passenger cars

Passenger cars

Passenger cars

Passenger cars

Passenger cars

Passenger cars

Business

HQ, Chongqing, China28,000Chang‘an Automobile

HQ, Guangzhou, China45,000GAIG

Guangzhou Automobile Industry Group Co.,Ltd

HQ, Beijing, China50,000BAIC

Beijing Automotive Industry Holding Co., Ltd

HQ, Shanghai, China63,000SAIC

Shanghai Automotive Industry Corporation

HQ, Wuhan, Hebei Province, China

106,000DFM

Dongfeng Motor Corporation

HQ, Changchun, Jilin Province, China

132,400FAW

Purchase decisionsEmployeesManufacturer

THE LARGEST PASSENGER CAR MANUFACTURERS MAKE THEIR PURCHASE DECISIONS IN CHINA

Pass

enge

r Car

s

6 largest companies for passenger cars in China

Source: Corporate websites

10

THERE ARE AROUND 67 CAR MANUFACTURING PLANTS IN CHINA- FAW and SAIC produce the most

56,000130,00049,000

Chang’an AutoChang’an Ford (Volvo)SuzukiBuses, Light Trucks, Cars

Chongqing Jiangbei#1 Chongqing Bei Xin #2 Chongqing Yu Dong #3

Chang’an

267,000160,000387,00085,000

General MotorsVolkswagenVolkswagen/GMCheryCars, Buses, Light Trucks

Liuzhou #1,Shanghai #2Shanghai I,II,III,IV #3-6Yantai #7

SAIC

28,00016,000

185,000

Beijing JeepBeijing FutianBeijing HyundaiCars, Light Trucks, Buses

BDA #1 Beijing #2Futian #3Tianzu #4 (10 plants altogether)

BAIC

57,00015,00095,00042,000

102,000

Nissan,RenaultHondaPSANissanYudea-KiaTrucks, Buses, Cars

Huadu #1Wantong #2Wuhan #3Xiangfan #4Yancheng #5

DFM

340,00012,00062,000

8,00031,00010,00091,000

124,000

FAW car, Fengyue,Volkswagen, AudiHainan MotorFAW HuataiToyotaTianjin HualiToyotaTianjin XialiCars, Buses, Heavy & Light Trucks

Changchun #1Changchun II #2Haikou #3Rongcheng #4Tianjin Tanggu #5Tianjin Lilou #6Tianjin Mazhuang #7Tianjin Zhong bei #8etc

FAW

Models and focus Production volume

Plant

(Around 67 in total)

Manufacturer

Source: Magazine Automobil Produktion, China Daily, www.globalautoindex.com, Corporate websites

The 5 largest OEM car manufacturers in China

11Source: STC analysis

Global integration increases – more cooperation between foreign and Chinese players Local protection is decreasing, but still existing

R&D

Market and Competition

Globalization

Market is optimistic, car sales is expected to grow at 5-7% annually till 2010 Competition is tougher, with Japanese/Korean cars taking share from

European/American cars Locals are expected to grow fast, especially Chery and Geely

Most foreign R&D takes place offshore, due to the IPR issue Local companies are spending a lot of efforts on R&D

COOPERATION BETWEEN FOREIGN AND CHINESE PLAYERS IS INCREASING

Trends within the Chinese passenger car industry

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Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

13

LIGHT TRUCK PRODUCTION REACHES ALL TIME HIGH - due to need for Chinese economic development

0

500000

1000000

1500000

2000000

2500000

2001 2002 2003 2004 2005

Light Trucks Heavy Trucks Buses

Commercial Vehicle Production in China Development the last 5 years

Vehicles Light truck made up the main part of commercial vehicle production in the last 5 years.

Steady Chinese economic growth have drawn the need for commercial vehicles, leads to the prodution growth.

Heavy truck and light truck production shrinked in 2005 because of the saturation of the market.

.

Source: Report and Statistics from China Automotive Industry Association

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HQ, Chongqing, ChinaLight trucks

buses

28,000Chang’an Automobile

Heavy trucks

Light trucks.

Busses

Light trucks

Tractors

Buses

Light truck, Heavy trucks

Semi-trailer,

Buses

Heavy trucks

Light trucks

Buses

Business

HQ, Jinan, Shandong, China24,000SINOTRUK

China National Heavy Duty Truck ( JV Volvo)

HQ, Beijing, China50,000BAIC

HQ, Shanghai, China63,000SAIC

HQ, Wuhan, Hebei Province, China106,000DFM

HQ, Changchun, Jilin Province, China132,400FAW

Purchase decisionsEmployeesManufacturer

THE LARGEST MANUFACTURERS OF COMMERCIAL VEHICLES MAKE ALL PURCHASE DECISIONS IN CHINA - Sino Truk and Volvo partner in making heavy trucks

Com

mer

cial

veh

icle

s

Source: Corporate websites

15

Hong Kong

CHINESE COMMERCIAL VEHICLES MANUFACTURERS ARE MOSTLY CONCENTRATED ALONG THE COAST AREAS

320,000Dongfeng TrucksLaunch of Nissan heavy trucks 2006

Hubei, ShiyanWuhanZhengzhou

DFM

60,000Volvo, SinotrukHeavy Trucks

JinanChina National Heavy Duty Truck

267,000SAIC-GM Wuling Mini Bus and Mini Truck

LiuzhouSAIC

118,000Changhe Carry Bus and Carry Truck

JingdezhenChanghe-Suzuki

FAW Jiabao Bus and Truck

Songhuajing China-ItalyZhongyi Bus andTruck

Chang’an Carry Bus and TruckJiangling Light Truck

Models and focus

121,000JilinFAW

241,000Harbin Hafei

349,000

84,000

Chongqing JiangbeiNanchang

Chang’an

Production volume

PlantManufacturer

The 7 largest commercial vehicle OEM manufacturers in terms of produced units

Source: Magazine Automobil Produktion, www.globalautoindex.com, Corporate websites

16Source: STC

It is estimated that China will have 20 more years of commercial car growth, with the rate to be 1.2-1.5 times GDP

Truck will double its sales in 10 years, although it’s at a low season currently Bus is facing fierce competition from other alternatives – e.g. flights and trains

R&D

Competition

Market

Few foreign investors has actively entered the market Volvo and Mercedes-Benz has investments on bus already

Main competition comes from domestic companies, FAW and Dongfeng take main truck share

Local companies are spending a lot of efforts on R&D

DOMESTIC COMPANIES ARE THE MAIN PLAYERS ON THE CHINESE MARKET - only Volvo and Mercedes have invested in China

Trends within the Chinese commercial vehicle industry

17



Passenger Cars

Commercial Vehicles

Suppliers


Recommendations

References

CONTENT

18

THERE ARE MORE THAN 100,000 AUTOMOTIVE SUPPLIERS IN CHINA

There are more than 100,000 suppliers for the automotive industry in China.

All the large automotive suppliers in the world (if you look at the turnover) are presented in China.

Automotive suppliers are mainly concentrated in location of East China.

All the foreign automotive suppliers are joint ventures with local companies due to legislation.

Local automotive suppliers’ products are mainly in the low-end markets.

Geographical concentration of automotive suppliersChinese automotive suppliers

19

MANY OF THE LARGE T1 SUPPLIERS ARE LOCATED IN EAST CHINA- All major international players are present in China.

Source: China Automotive Association

Cables, bus systems, embedded systems

Bosch Valeo Siemens VDO DENSO Corporation Delphi

Power train, exhaust systems, engines

Bosch FAWER* Dongfeng

Cockpit, seats, dash-board, air conditioning

Visteon Valeo Delphi

TIER 1 SUPPLIERS

Electrical systems Interior equipment Propulsion Body Running gear

Body, roof, glass, doors, lighting etc.

FAWER* Visteon FAWER*-sihuan

Suspension, brakes, axles, steering, tires

Bosch Wanxiang FAWER*

* FAWER is an affiliated corporation of FAW

20

TIER 1 SUPPLIERS

Danso, Tianjing, ChinaAir conditioner2,000Danso

HQ, Hangzhou, ChinaAutomotive components30,000Wanxiang

HQ, Changchun, ChinaAutomotive components2,456Fawer-sihuan

HQ, Guangzhou, ChinaAutomotive Componets1,700Dongfeng

Automotive components

Interior Equipment

Air conditioner

Electric System

Electric System

Air conditioner

Electric System

Automotive components

Business

HQ, Changchun, China15,000Fawer

HQ, Shanghai, China300Visteon

HQ, Shanghai, China

HQ, Shanghai, China

920

600

Delphi

HQ, Shanghai, China300Siemens VDO

Purchase office, Shanghai, China

Purchase office, Shanghai, China

4,000Valeo

HQ, Shanghai, China15,000Bosch

LocationEmployeesManufacturer

21

THE T1 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMs- All major international players are present in China.

Faw-sihuan

Fawer Changchun Automotive Components

Bosch Wuxi Automotive Diesel System

Bosch Suzhou Automotive Components

Bosch Shanghai Automotive Electric

Valeo Shanghai Automotive Electric

Denso Tianjing

Shanghai Delphi Auto A/C Systems

Delphi Shanghai Electric Systems

Yianfeng Visteon Automotive Systems

Shanghai Yanfeng Johnson Seats

Wanxiang Group

Valeo Hubei Automotive Air-conditioner

Dongfeng Automotive ComponentsDongfeng EnginesSiements VDO Automotive

22

THERE ARE MANY T2 SUPPLIERS LOCATED IN CHINA- T2 Suppliers are mainly Chinese companies.

Automotive Association, Magazine Automobil Produktion


Weifu Group Guangdong Ruitu Changxiang


Great Wall Zhongding Group Hangzhou Auto

Engines

Cockpit, seats, dash-board, air conditioning

Weifu Group Torch Automotive Tianjing Huafeng

TIER 2 SUPPLIERS



Weifu Group Dongfeng Auto Parts


Torch Automotive Dongfeng Wanxiang Group Jinfei Group 3000

23

TIER 2 SUPPLIERS (1/2)

HQ, Anhui, ChinaAutomotive Components

200Zhongding

HQ, Hangzhou, ChinaAutomotive Components

128Hangzhou Auto Engines

Electric System

Automotive Components





Business

HQ, Shanghai, China600Changxiang

HQ, Tianjing, China200Tianjing Huafeng

HQ, Guangzhou, China300Dongfeng Hubei Components

HQ, Wuxi, China300Wuxi Weifu

HQ, Baoding, China700Great Wall

HQ, Jinhua, China3,000Jinfei Group


24

TIER 2 SUPPLIERS (2/2)

HQ, Quanzhou, ChinaAutomotive Components

200Torch Automotive

Engines


Business

HQ, Baoding, China200Great Wall

HQ, Guangzhou, China300Auto Parts


25

THE T2 SUPPLIERS ARE LOCATED NEAR THE VEHICLE OEMS - T2 Suppliers are mainly Chinese companies.

Great Wall

Wuxi Weifu Group

Tianjing Huafeng

Jinfei Group

Changxiang

Hangzhou Auto Engines

Dongfeng Hubei Components

Zhongding Group

Torch Automotive

Auto Parts

Guangdong Ritu

http://image.baidu.com/i?ct=503316480&z=368060751&tn=baiduimagedetail&word=??&in=46

http://image.baidu.com/i?ct=503316480&z=718193900&tn=baiduimagedetail&word=????&in=3

http://image.baidu.com/i?ct=503316480&z=742544752&tn=baiduimagedetail&word=GAIG&in=1

http://images.google.com/imgres?imgurl=http://www.naviforum.sh.cn/logo/2005927_43554_cx_logo.png&imgrefurl=http://www.naviforum.sh.cn/english_site/related_links.asp&h=31&w=88&sz=7&hl=zh-CN&start=27&tbnid=60laxtqsdd8d_M:&tbnh=27&tbnw=77&prev=/images?q=Changxiang&start=18&ndsp=18&svnum=10&hl=zh-CN&lr=&newwindow=1&sa=N

26Source: STC

Almost all large international suppliers (according to the turnovers) are presented in China.

Local protection still exists.

R&D-displacement

Competition and price

reductions

Globalization

Foreign players are at medium-high end market. Locals are taking main share, but at low end market

Local suppliers are spending efforts on updating their products. International suppliers start to have R&D centers in China

INTERNATIONAL SUPPLIERS MOVE R&D CENTERS TO CHINA- local suppliers still have the largest market share

Trends within the Chinese Automotive supplier industry

27




Manufacturers

Suppliers

Recommendations

References

CONTENT

28

THE CHINESE PRODUCTION OF CONSTRUCTION EQUIPMENT TOTALS ABOUT SEK 123 BILLION- the industry grew more than 8 % 2005

0

50

100

150

200

250

2000 2001 2002 2003 2004 2005

Domestic Export

Lifting

SEK 19.2 billion

Earth Moving

SEK 45.6 billion

Road

SEK 31.6 billion

billion SEK Sales construction machinery in China

Source: China Machinery Magazine

Underground&Others

SEK 28.6 billion

Growth is mainly driven by domestic sales

29

MORE THAN 266,000 CONSTRUCTION EQUIPMENTS ARE PRODUCED IN CHINA

SOME TOP CONSTRUCTION EQUIPMENT MANUFACTURERS

ROAD(45,323 vehicles)

5 manufacturers. Guangxi Liugong

Machinery Co., Ltd

Xuzhou Construction Machinery Group.Inc

Shenyang North Traffic Engineering Company

China Infrastructure Machinery Holdings Limited

Xiamen Engineering Machinery Co., Ltd

Graders,Concrete Mixer, Asphalt Paver, Road Roller

UNDERGROUND(4,989 vehicles)

4 manufacturers Shenyang Heavy

Machinery Group Co.,Ltd

Inner Mongolia North Heavy Industries Group

Changlin Company Ltd.

Shanghai Engineering Machinery Co.,Ltd

Wheel loaders, Drills, Haulers, Pile Hammer

5 manufacturers Xuzhou

Construction Machinery Group.Inc

Guangxi Liugong Machinery Co., Ltd




EARTH MOVING(136,664 vehicles)

Excavators, WheelLoaders, Backhoe loaders, Skid steer loaders, Bulldozer

LIFTING(79,262 vehicles)

4 manufacturers Xuzhou

Construction Machinery Group.Inc

Shenyang North Traffic Engineering Company



Mobile cranes, Tower Crane, Forklifts, Truck-mounted Crane

Source: National Development & Reform Commission, Construction Machinery Magazine, China Construction Machinery Association

30

THE CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE COASTAL AREA OF CHINA

HQ,Xiameng, Fujiang, Province

HQ, Changzhou, JIangsu Province

HQ, Shanghai

HQ, Liuzhou, Guangxi Province

HQ, Xuzhou, Jiangsu Province

Purchase Decision

1893

1496

5150

7,500

20,000

Employee

Total: 17050Wheel loaderRoad roller

Shanghai；Longyan， Fujian province


Total:10,000Wheel loaderRoad RollerGraderBackhoe loaderCraneConcrete paver

Changzhou, Jiuangsu Province


LoaderRollerBulldozerExcavatorConcrete pump

Wheel loadersSkid steer loadersBackhoe loadersExcavator RollersMotor GradersPaving Equipment

Wheel loadersTruck cranesMotor gradersRoad rollersRoad paversBulldozers

Models and focus

Total: 14,540Xiamen,Fujian Province


Total: 20,000Liuzhou,Guangxi Province


10,00010,000

3,0008,0001,000

500

Xuzhou, Jiangsu Province


Production volume

PlantManufacturer

The 6 largest OEM construction equipment manufacturers in China

Source: Corporate websites and annual reports

31

MAIN CONSTRUCTION MANUFACTURERS CONCENTRATED IN THE SOUTHEAST COAST OF CHINA






32




Manufacturers

Suppliers

Recommendations

References

CONTENT

33

SUPPLIERS OF CONSTRUCTION EQUIPMENT ARE MAINLY LOCATED CLOSE TO ENGINEERING MACHINERY MANUFACTURERS

Source: Parts and Components Branch of China Construction Machinery Association


Shanxi Sunland Automatic Control

Xi’an Kind Electrical Control Instruments

Shanghai Pal-fin Automatic Control Technology


Cummins Hangzhou Advance

Gearbox Qidong Sanshang

Electromechanical Sichuan Gear Works Torque Converter

Shantui Construction Machinery

Zhejiang Linhai Machinery

Hubei Guanghua Transmission

Cockpit, seats, dash-board, air conditioning etc.

Zhejiang Tiancheng Seat

Shandong CAB Fenghua Hearty

Motormeters Yuxin Automotive Air

Conditioning Hangzhou Nealley

Vehicle Air Conditioning

SUPPLIERS



XuZhou YangSheng Machine

Taixing Huaheng Lamp & Plastic


Wanxiang Group Xuzhou Zhengxing

Axle Wuxi Shengfeng

Vibration Isolator AsiaTrak Wendeng Sanfeng Tire Hangzhou Zhenxing

Friction Material Liaoan Section Mill Shandong Shantui

Ouyatuo Machinery Baoding Jizhong

Bushing Factory Tianjin Ribiao

34

HQ, Zhejiang, ChinaSeatN/aZhejiang Tiancheng Seat

HQ, Shanghai, ChinaControl systemN/aShanghai Pal-fin Automatic Control Technology

HQ, Chongqing, ChinaEngineN/aCummins

HQ, Zhejiang, ChinaAutomotive Air Conditioning

N/aHangzhou Nealley Vehicle Air Conditioning

HQ, Zhejiang, ChinaTransfercase3,350Hangzhou Advance Gearbox

HQ, Henan, ChinaAutomotive Air Conditioning

N/aYuxin Automotive Air Conditioning

Motormeters

Cockpit

Control system

Control system

Business

HQ, Zhejiang, China100Fenghua Hearty Motormeters

HQ, Shandong, China200Shandong CAB

HQ, Shanxi, ChinaN/aXi’an Kind Electrical Control Instruments

HQ, Shanxi, ChinaN/aShanxi Sunland Automatic Control

Purchase decisionsEmployees

Manufacturer

SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY (1/3)- All purchase decisions are made locally

Source: Company website

35

HQ, Jiangsu, ChinaDoorN/aXuZhou YangSheng Machine

HQ, Jiangsu, ChinaLights and accessories

550Taixing Huaheng Lamp & Plastic

HQ, Shandong, ChinaTireN/aWendeng Sanfeng Tire

HQ, Tianjin, ChinaRollersN/aAsiaTrak

HQ, Jiangsu, ChinaVibration Isolator

425Wuxi Shengfeng Vibration Isolator

Drive Axle

Suspension, steering

Transfercase

Electric Motor

Business

HQ, Jiangsu, ChinaN/aXuzhou Zhengxing Axle

HQ, Zhejiang, ChinaN/aWanxiang Group

HQ, Sichuan, China2200Sichuan Gear Works

HQ, Jiangsu, China300Qidong Sanshang Electromechanical


Manufacturer

SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY (2/3)

Source: Company website

36Source: Company website

SUPPLIERS TO THE CONSTRUCTION EQUIPMENT INDUSTRY (3/3)

HQ, Tianjin, ChinaReducer and parts assembly

N/aTianjin Ribiao Construction Machinery Parts

HQ, Shandong, ChinaTorque Converter

582Torque Converter Shantui Construction Machinery

HQ, Zhejiang, ChinaTorque converter

550Zhejiang Linhai Machinery

HQ, Zhejiang, ChinaFrictional products

Around 200Hangzhou Zhenxing Friction Material

Transmission Box Shell

Idler, Roller, Carrier

Axletree & Tile

Track shoes

Business

HQ, Hubei, ChinaAround 150Hubei Guanghua Transmission

HQ, Shandong, ChinaN/aShandong Shantui Ouyatuo Machinery

HQ, Hebei, ChinaN/aBaoding Jizhong Bushing Factory

HQ, Liaoning, ChinaAround 100Liaoan Section Mill


Manufacturer

37

THE CONSTRUCTION EQUIPMENT INDUSTRY IS CONCENTRATED TO THE COASTAL AREA OF CHINA

Source: Corporate websites and annual reports

Shanxi Sunland Automatic Control

Xi’an Kind Electrical Control Instruments

Shanghai Pal-fin Automatic Control Technology

Zhejiang Tiancheng Seat

Shandong CAB

Fenghua Hearty Motormeters

Yuxin Automotive Air Conditioning

Hangzhou Nealley Vehicle Air Conditioning

Cummins

Hangzhou Advance Gearbox

Qidong Sanshang Electromechanical

Sichuan Gear Works

Torque Converter Shantui Construction Machinery

Zhejiang Linhai Machinery

Hubei Guanghua Transmission

XuZhou YangSheng Machine

Taixing Huaheng Lamp & Plastic

Wanxiang Group

Xuzhou Zhengxing Axle

Wuxi Shengfeng Vibration Isolator

AsiaTrak

Wendeng Sanfeng Tire

Hangzhou Zhenxing Friction Material

Liaoan Section Mill

Shandong Shantui Ouyatuo Machinery

Baoding Jizhong Bushing Factory

Tianjin Ribiao

http://www.cat.com/

38Source: STC

Market restructuring happens with the supervision from the government Sanyi and Carlyle Group are under the negotiation with Xu Gong acquisition

Technology

Competition

Restructuring

Foreign, esp. Japanese and American players are at medium-high end market, with low volume

Locals are taking main share, but at low end market

Locals are taking efforts to develop premium products IPR is still a concern to many foreign investors

THE MARKET IS BEING RESTRUCTURED UNDER SUPERVISION FROM THE GOVERNMENT

Trends within the Chinese Construction Equipment industry

39

Overview German Manufacturing Industry

German Automotive Industry

German Construction Equipment Industry

Recommendations

References

CONTENT

40Source: STC

RECOMMENDATIONS FOR MAKING BUSINESS WITH THE CHINESE AUTOMOTIVE INDUSTRY

Recommendations for making business with the Chinese automotive industry

Although China has low labor costs, operation costs could be high why investors are recommended to make careful plan before they enter China

3.

2.

1.

Country specific

3.

2.

China´s automotive sector is not fully open yet, and many market restrictions still exist. IPR issue is still worth considering

It is necessary to carry out certain market study to understand the market and customers

To visit the potential customers or partners can be a good start for the business

China encourages investors to source locally, and set quite high duty on importing parts.

1.

Industry specific

It is necessary to carry out certain market study to understand the market and customers

To visit the potential customers or partners can be a good start for the business

China encourages investors to source locally, and sets quite high duty on importing parts.

Investors are recommended to build long term relationship with its partner and relevant authorities

41

Overview German Manufacturing Industry

German Automotive Industry

German Construction Equipment Industry

Recommendations

References

CONTENT

42

HOW STC IN CHINA SUPPORT COMPANIES TO DO BUSINESS IN CHINA

Partner search

SalesSupport

Market Check

Recruitments

Supplier search

BusinessSupport Office

Company establishment

Description of service Example of result Sample clients / Products

Besides this we often custom made projects to suit our customers needs

Map out the current situation in China for a specific product or service

Give the company a base for deciding if to enter the market or not / making a cost estimate for setting up production

• Plastic production company

• Household appliance manufacturer

Making test sales in China of a product and collecting feedback from potential customers to sharpen local offering

Modifying the product portfolio and sales pitch to better suit the Chinese market.

• Producer of alloys

• Springs for the automotive industry

Finding the most suitable agents or a distributors in China or Hong Kong based on the needs of the Swedish company

Making the Swedish and Chinese understand each other and finding common ground

• Leather for interior design

• Dental products

Map out the needs of the company, work out a profile and find the best possible candidate to that profile

140 recruitments over the last two years (Examples: Swedish GMs, Asia managers, local sourcing, local sales, QCs)

• Logistics

• Plastic manufacturing

Find the best possible supplier that matches the criteria set by the Swedish company to get the best competitive advantage

Matching, explaining and verifying technical needs with local production capacity

• Cast iron products, cables, containers, disposables, electronics

A quick “low risk” establishment in China either in the form of a full time staff or as part time support together with office space

Over 50 staff employed in China and Hong Kong that works 100% for the Swedish company but that is employed by STC

• Purchasing staff, sales staff, quality control staff, Swedish staff

Establishments and setting up of production- or trading companies in China and / or Hong Kong

Assist in establishing all types of presences; representative offices, WFOEs, FICE and Ltds (HK)

• Lighting products

• Aluminum manufacturing

43

STC HAS HELPED NUMEROUS SWEDISH COMPANIES TO DO BUSINESS WITH THE CHINESE AUTOMOTIVE INDUSTRY

Manufacturer of brake systems, hydraulic power systems, garphyttan wire (specialty spring wire), and traction systems

Service provider in both holistic commitments in complex vehicle development projects and consultancy services and expert support in pre-studies, design, calculation, construction, prototypes and test & verification.

Equipment provider for exhaust extraction systems for vehicle service shops and the automotive industry.

Visited relevant official department and manufacturers in Hong Kong, Guangzhou and Shanghai

A automotive delegation consist of 9 Swedish companies

PROFILECOMPANY

44

STC CARRIED OUT A POTENTIAL CUSTOMER SEARCH AND VISITING PROGRAM FOR SEMCON

The overall objective of this assignment was to assist Semcon in investigating the market potential in Eastern China in and to further strengthen Semcon’s market position in Asia.

• Conducted a pre-study of potential customers, and set up a visiting program with a number of of RnD-managers at automotive manufacturers in Eastern China with STC.

• Assisted and advised Semcon in its meetings with potential partners during the visiting program

• STC also supported Semcon in the process of selecting customers.

STC role and contribution

Results

Goal Outline of project

• A recommended list of companies that met Semcon’s criteria was presented with company profile and STC’s comments and advices.

Potential customer

searchVisiting program

Kick off Workshop 1 Workshop 2

Kick off: The start-up meeting resulted in a skilled project team and detailed project planning.Step 1: STC carried out the potential customer search program.Workshop 1: Presentation and discussion of the potential customer search; deciding next step including planning of visiting program.Step2: Semcon visits China and meets with RnD-managers within the automotive industry together with STC.Workshop 2: Discussion of visiting program and next step.

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STC CARRIED OUT A RECRUITMENT AND BUSINESS SUPPORT OFFICE (BSO) PROJECT FOR NEDERMAN

The overall objective of this assignment was to assist Nederman to successfully enter the China market.

• STC supported Nederman to recruit two Sales Managers for the China market

• STC assisted Nederman to legally employ the staff under STC in East China (BSO concept) until Nederman decides to set up its own presence in China.

• By employing the representatives through STC BSO, Nederman will in reality have the same capabilities in China as if they would have it’s own Representative office.

STC role and contribution

Results

Goal Outline of project

• STC helped Nederman in establishing a presence in China and has now two sales managers working full time.

Advertisement Interviews Employment at

BSO

• Kick off: necessary candidate qualification discussion, choice of ad media, decided recruitment schedule.•Step 1: advertisement on newspaper went publications for candidate search.•Shortlist: review candidates’ profile to narrow down amount of candidates.•Step 2: interviews by Nederrman and STC with selected candidates.•Recruitment: qualified candidates employed.•Employment at BSO: with office space, office equipment and financial services provided by STC, employees start to work for Nederman.

Shortlist RecruitmentKick off

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