Fast growing markets / Special focus Asia Market update Key market drivers Manufacturing footprint Engineering footprint Successful business Ulrich Selig Director, Automotive Asia
Passenger car production - Asia Passenger Car Production 120000000 100000000 22,5% 25% 20% 80000000 15% Asia 60000000 40000000 10,3% 5,4% 4,6% 10% 5% World Total YOY Asia YOY World 20000000-0,3% 0% 0 2011 2012 2013 2014 2020-5% Asia ~ 50% of global car production Out of top 15, six are Japanese manufacturers Foreign JVs market leadership in China Source: IHS August 2014
Heavy and medium truck production - Asia Heavy & Medium Truck Production 4 500 000 70% 4 000 000 3 500 000 56,7% 60% 50% 3 000 000 2 500 000 2 000 000 1 500 000 1 000 000 3,6% 2,6% 40% 30% 20% 10% 0% Asia World Total YOY Asia YOY World 500 000 0-10,9% 2011 2012 2013 2014 2020-10% -20% Asia ~ 60% of global truck production Top 5 heavy truck manufacturers come from China Source: LMC Report Q2 2014
Key drivers to impact the Asian automotive market Urbanization Disposable income growth Infrastructure development Rapid growth in small cars Electric vehicles Total cost of ownership
Manufacturing and engineering footprint - Asia New factories established ATC2 factory, Shanghai, China - production started 2014 Jinan factory, China - production started 2012 Mysore factory, India - production started 2012 SKF Global Technical Centres expanding 13 production sites Haridwar Pune Bangalore Mysore Jinan Wuhu Taegu Busan Shanghai ATC I + SSBC Shanghai ATC II Singpore Jakarta
Global Technical Centres in Asia Global Technical Centre China Shanghai (Jiading Campus) Employees:~400 (to 2016) Opened:2013 Q4 Automotive Testing Centre Japan, Chino Global Technical Centre India Bengaluru Employees: ~400 (to 2016) Opened:2012
Product engineering centre - Asia Meet local customer specific challenges Quicker answers Truck Specialized and dedicated engineering teams Global product development and design process to ensure worldwide quality standards Global Technical Centre India Two wheelers Light vehicles Global Technical Centre China Trucks Seals Trucks
Key automotive customers in Asia Passenger cars Commercial vehicles
Customer technical days 2013 18 OEM customer days 25 VSM distributor days 50 locations 4,000 visitors 2014 - YTD 4 OEM customer days 21 VSM distributor days 10 Truck Fleet customer days 2014.05.23 SAGW Tech Day 2014.04.29 Hande Axle Tech Day 2014.04.23 VSM Distributor Day 2014.03.12 Sweden Innovation Day 2013.11.20 GAC Tech Day 2013.09.21 Volvo China Tech Day
Great Wall - China Strategic partnership agreement Focus Dedication Specialization Solutions Wheel hub bearing unit (HBU) Transmission bearing Engine and driveshaft seals Great Wall Leading local car brand in China Strong growth plans Sales target 2015: 000 units Italy Russia Chile South Africa Australia Source: Great Wall
Great Wall To grow our business in China and globally we need high quality suppliers with advanced engineering capabilities, close to us locally and a solid footprint globally. Great Wall wants SKF, as our strategic partner, to support us to reach global fame with the aim of building the best Chinese vehicles.
Geely - China Solutions Transmission bearings (deep groove ball bearing, bearing retainer) Transmission seal (low friction bonded piston seal) Engine seal Happy life, Geely drive. Geely Mission: Build the safest, most environmentally-friendly and most energy-efficient cars, and bring Geely cars to the world! In 2013,GEELY Holding Group revenue achieved 24.55 Billion US dollars, listed as the 477 th company of world fortune 500
Geely Mrs. Ruiping Wang, VP Geely Group & General Manager Geely Powertrain Latest world leading technology High quality products Competitive cost Speed - fast response time World class supplier valued brand
Dongfeng Commercial Vehicle - China Solutions Engine idler bearing Tapered roller bearing for transmission Maintenance-free universal joint bearing and hanger bearing for propeller shaft Tapered roller bearing for axle Chinese Dongfeng Global Dongfeng Dongfeng Leading heavy and medium duty trucks manufacturer in China Sold over 172,000 heavy and medium duty trucks in year 2013 A strategic alliance established with AB Volvo to build Dongfeng into a global brand
Dongfeng Commercial Vehicle Mr. Huang Gang, General Manager Competence, technology and quality products Deepen and widen cooperation Support to improve trucks for global customers
Mazda - Japan Solutions Transmission seal (low friction bonded piston seal) Robust MacPherson supspension bearing unit Zoom Zoom Mazda Sold 1.3M vehicles worldwide in 2013 Over 80% sold outside Japan New plant in Mexico for Mazda 2 and Mazda 3 started operation in 2014 Forecast 1.5M vehicles worldwide in 2015
Isuzu Japan Solution Tapered roller bearing Isuzu Global truck manufacturer Aims to be a leader in transportation, commercial vehicles and diesel engines, supporting customers and respecting the environment More than 70% of Isuzu turnover comes from overseas countries
Hyundai/Kia - Korea Solutions Wheel hub bearing unit Robust MacPherson suspension bearing unit New thinking New possibilities Hyundai/Kia Overseas production expected to grow slightly to exceed domestic Hyundai-Kia 5th largest automotive OEM group Global footprint: The power to surprise
Hyundai Motors Mr. Byeong-Jun, Kim, Purchasing Director Working with SKF, we know we get the advanced and highest performing solutions we need for our vehicles to reach the world best level of the cars. Hyundai & Kia have grown tremendously over the last years globally, and we recognize that SKF s global engineering and manufacturing footprint are a highly valuable support to us in our continued growth. We are pleased to work with SKF as we also have their timely and skilled support close to us in Korea and we look forward to continued growth with SKF.
Honda - Indonesia Solution Wheel hub bearing unit (HBU) The Power of Dreams Honda Leading car manufacturer in Indonesia Opening for further HBU business also with other car manufacturer Indonesia Fast growth of small cars due to economical development transition from TW Local Indonesia manufactured parts will enable customer to meet government requirement for incentive scheme
Key message for Automotive Asia Increasing engineering capacity close to the customer Utilizing manufacturing capacity including new factory to grow with our customers Signing strategic partnership agreements strengthens growth for future market share Continue building strong relationship with customers; recognition with quality and business awards
SKF Automotive strategy Robust supplier base Productivity Cost and capital efficiency Cost reductions