ORGANIC EMS DEVELOPMENT, ODM OPPORTUNITIES, LINE/FACTORY DIVESTMENTS AND THE TREND TO GROWTH IN EASTERN EUROPE RELATIVELY STEADY GROWTH LESS VOLATILE THAN I.T. SECTOR EUROPEAN PROFESSIONAL EMS PRODUCTION - AUTOMOTIVE EASTERN EUROPE FRANCE & BENELUX N/A HIGH GROWTH SYSTEMS 22%+ GROWTH PA FOR SUBSYSTEMS EMS DRIVEN BY: WIRELESS INTERNET MOBILE COMMUNICATIONS DISTRIBUTED COMPUTING SAFETY COST REDUCTION GERMANY, AUSTRIA, SWIT ITALY N/A UK/IRELAND SPAIN N/A NORDIC $M FUEL SAVING - FUEL INJECTION SAFETY - NIGHT VISION, TYRE PRESSURE, MANUAL TRANSMISSION MAJOR DRIVE TO LOW COST MANUFACTURE BASES - EG CZECH REPUBLIC FORECAST 2005 2002 1999 1996 SOURCE : MHM MULTICLIENT : AUTOMOTIVE SECTOR OPPORTUNITY FOR HIGHER VALUE ADDED EMS AND ODM MHM www.mhm.info 1
MULTICLIENT AUTOMOTIVE SECTOR OPPORTUNITY FOR HIGHER VALUE ADDED EMS AND ODM Marketing Innovative Component & System ODM Developments Alongwith EMS Will Strengthen The Subscriber s Operation MHM s Multiclient Pin- Points Current Opportunities To Add Such Value 22% PA Growth In Automotive EMS Proportion Of Car That Electronics Accounts For Forecast To Rise To 35% 90% Of All Car Innovations Are Electronics Based Europe Has Significant Strength In Automotive Electronics And Emerging Countries Require More Cars Automotive EMS/ODM - An Opportunity to Increase Competitive Advantage by Adding Value With a Differentiated Service The regulatory framework and growth characteristics of the Automotive Electronics sector make it attractive to EMS and ODM suppliers planning increased profitability and a drive away from an undifferentiated service including only box build, PCBA and distribution. While MHM s short term forecast is for 22% growth, for Automotive EMS, the longer term fundamentals are equally as attractive: Percentage of electronics/electrics in cars forecast to rise, from 22% to 35%! - 90% of all innovations in new cars are electronics based Automotive manufacture is the most regular large business with 3/5 of the top global 500 companies being Automotive (revenue of top approaching $200Bn PA) Number of cars to increase 95% in South America, 74% in Eastern Europe and 75% in Asia (less Japan) Significant European strength in Automotive electronics suppliers Bosch, Valeo, Siemens VDO and others - A good sector for European focus - Germany a key focus MHM www.mhm.info 2
MHM s Multiclient Helps Develop At The Centre Of This Lesser Known Sector This Time MHM Is Interviewing The Automotive Brand Names Ford, Daimler Chrysler, Identifying Opportunities For New Components & Systems MHM Finds Out About ODM & EMS Opportunity Via Interviews At Auto Brand Names MHM s Automotive Electronics Multiclient will help the subscriber develop the EMS and ODM opportunities by focusing not only on the Electronics Systems providers (Bosch, Valeo, Siemens VDO, ) but also for the first time on the design and purchasing of electronics systems at the OEM Brand Names (Daimler Chrysler, ). The three key areas of focus for MHM s current Multiclient, are given in the diagram below. AUTOMOTIVE ELECTRONICS - SIMPLIFIED TIER SYSTEM AUTOMOTIVE BRAND NAMES Ford, Daimler Chrysler, (Purchasing Electronics Systems & Design, ) While Also Interviewing First Tier Electronics System/ Component Suppliers FORD, DAIMLER CHRYSLER,... 1ST TIER ELECTRONICS SYSTEMS SUPPLIERS FOCUS WITH MHM INFORMATION Bosch, Valeo, Siemens VDO,( Marketing, Purchasing, Outsourcing & Design, ) And Analysing Contracts Currently Running At Jabil, Sanmina-SCI, FREEMARKET KOSTAL, TRW, MAGNETI-MARELLI, JOHNSON, SIEMENS VDO, BOSCH, VALEO, WABCO, DENSO,... PREVIOUSLY IN-HOUSE/LINKED VISTEON DELPHI... MHM Contact Network At 2ND TIER CEM OUTSOURCING SANMINA-SCI, EPIQ, ALCYON, RAYTHEON, PARTNERTECH, TT, JABIL, KIMBALL,... PRESENT CEM FOCUS Daimler Chrysler, Ford, Bosch, Visteon, Valeo, Will Leverage Subscriber s Business Development Utilisation of MHM s contact networks tracing contracts from car Brand Name, via electronics systems suppliers and back to EMS and ODM players will significantly leverage the subscriber s business development effort. MHM www.mhm.info 3
Long Term Automotive Electronics Outsourcing Trends Favourable Short & Long Term Automotive Electronics Outsourcing Looks Good In-house production values are forecast to drop by 40% of current levels in-house R&D is forecast to drop by approaching 30% - in favour of outsourcing. In total, in-house R&D and production, is forecast to drop by 28%, in favour of outsourcing. At the same time the concentration of Electronics System suppliers, in larger global accounts, continues while the Brand Names increasingly develop relationships with suppliers suppliers. The Closer You Are To The Automotive Brand Names The Better This Analysis Will Bring You Closer To The Requirement Of GM, Daimler Chrysler, Ford, Volkswagen, Increasing Profitability In The Process MHM s Automotive Electronics outsourcing multiclient will enable the subscriber to get closer to the Automotive Brand Names developing emerging EMS and ODM contracts with higher value added rather than selling PCBA as an undifferentiated service to a first-tier supplier. MHM www.mhm.info 4
PROPROSED CONTENTS : MULTICLIENT AUTOMOTIVE SECTOR OPPORTUNITY FOR HIGHER VALUE ADDED EMS AND ODM 1. OVERVIEW - EUROPEAN AUTOMOTIVE SECTOR CEM OUTSOURCING EMS & ODM - EMS/ODM Automotive Production and Forecast to 2006 $M - Top 5 ODM/EMS Targets 2. EMS STRATEGIC DEVELOPMENT IN THE AUTOMOTIVE SECTOR - Opportunities, Threats and Potential EMS/ODM Strategic Development - Automotive Sector OEMs Willing to Divest Production Facilities - Automotive Electronics System Manufacture Value Growth to 2006 - Integrated Outsourcing in the Automotive Sector 3. AUTOMOTIVE BRAND NAME ODM REQUIREMENTS 3.1 ODM Requirement Overview 3.2 General Motors 3.3 Ford 3.4 Daimler Chrysler 3.5 Peugeot/Renault 3.6 Volkswagen 3.7 Fiat 4. KEY AUTOMOTIVE ELECTRONICS SYSTEM SUPPLIERS - LOCUS OF DECISION MAKING AND OUTSOURCING REQUIREMENTS 4.1 European Automotive Electronics System Suppliers - Locus of Decision Making Overview 4.2 Delphi 4.3 Robert Bosch 4.4 Visteon 4.5 Denso 4.6 Johnson 4.7 TRW 4.8 Valeo 4.9 Siemens VDO 4.10 Autoliv 4.11 Magnetti Marelli 4.12 Other (Kostal, ) 5. CONTRACT ELECTRONICS MANUFACTURE FOR THE AUTOMOTIVE SECTOR 5.1 EMS - EPIQ - Jabil - Kimball - Raytheon - Sanmina-SCI - ++ MHM www.mhm.info 5
5.2 Contact Database for Automotive Brand Names (Tel/Email/ Fax/Address for Purchasing, Outsourcing, Production, Design, Marketing and Supply Chain Contacts) 5.3 As 5.2 for Automotive Electronics Systems Suppliers For further information contact: MHM 2 Boswell Park Ayr KA7 1NP UK Tel: UK+ (0)1292 263625 Fax: UK+ (0)1292 265081 Email: info@mhm.info www.mhm.info MHM www.mhm.info 6