Halla Visteon Climate Control Corp. Business Report up until FY ended Dec. 2013
Business Highlights
Recent Years
Subsidiaries and affiliates
<Portugal>
Production
-In April 2012, the Company started to supply air-conditioning systems to Tesla Motors, an electric vehicle maker based in the U.S.A. The air-conditioning systems being supplied will be mounted on Tesla's Model S over a period of five years. (From an April 2, 2012 press release)
-In April 2013, the Company received the Automotive News PACE Award in the product innovation category for its metal seal fitting. Replacing rubber rings with metal rings has contributed to eliminating a significant source of refrigerant leakage from air conditioning systems, while resisting contamination during assembly. The company was also recognized as a finalist in the manufacturing process category for its innovative pretreatment method at the Pyeongtaek Plant that uses a laser technology. (From a press release, April 17, 2013)
Financial Overview (Consolidated) |
(in million KRW) |
| FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | Rate of change (%) |
|
| Sales | 5,189,355 | 3,653,096 | 42.1 |
| Operating income | 363,535 | 309,597 | 17.4 |
| Net income | 312,103 | 245,144 | 27.3 |
Acquisitions
-In January 2013, the Company and Visteon announced that they have signed a definitive agreement to sell most of Visteon's automotive climate business to the Company for a purchase price of USD 410 million. The Company, to be renamed Halla Visteon Climate Control Corp., will be the world's second largest global supplier of automotive climate components and systems. The transaction is expected to be completed in the first quarter of 2013. (From a press release on January 11, 2013)
Subsidiaries and affiliates
<Portugal>
-In December 2013, the Company announced that it will integrate its two Portuguese subsidiaries. Visteon Climate Portugal S.A. will absorb Halla Climate Control Portugal Unipessoal, Lda. effective January 1, 2014. (From a press release on December 3, 2013)
<Brazil>
-In Sep 2013, the Company established Halla Visteon Climate Control do Brasil Ltda. (HVCC Brazil). The new subsidiary is owned 99.9 percent by Halla Visteon. It will produce and sell climate control products for automobiles. (From a press release on November 8, 2013)
<China>
-In August 2011, the Company acquired 37.5 percent of the shares in Wuhu Bonaire Automotive Electrical Systems Co., Ltd. from Wuhu Chery Technology CO., Ltd. and Sunny Channel Limited. Wuhu Bonaire Automotive Electrical Systems is a manufacturer of HVAC systems and engine cooling systems based in Wuhu, Anhui Province.
Production
-In April 2012, the Company announced that the accumulated production volume of compressors so far produced at its Pyeongtaek Plant in Gyeonggi Province broke through the 50 million mark. The Pyeongtaek Plant was completed in October 1991. By 2000 it had produced 10 million units, and by 2007 the number had grown to 30 million. (From an April 23, 2012 press release)
-In April 2011, the Company announced that the accumulated production volume of front end modules so far produced at its Ulsan Plant broke through the 5 million mark. The Ulsan Plant has produced front end modules since May 2005. (From an April 22, 2011 press release)
Contracts
Tesla Motors-In April 2012, the Company started to supply air-conditioning systems to Tesla Motors, an electric vehicle maker based in the U.S.A. The air-conditioning systems being supplied will be mounted on Tesla's Model S over a period of five years. (From an April 2, 2012 press release)
Awards
-In April 2013, the Company received the Automotive News PACE Award in the product innovation category for its metal seal fitting. Replacing rubber rings with metal rings has contributed to eliminating a significant source of refrigerant leakage from air conditioning systems, while resisting contamination during assembly. The company was also recognized as a finalist in the manufacturing process category for its innovative pretreatment method at the Pyeongtaek Plant that uses a laser technology. (From a press release, April 17, 2013)
-Major awards up until FY ended Dec. 31, 2012
| Year | Received Company | Awarding Company | Award |
| April, 2012 | Visteon Climate Control (Beijing) Co., Ltd. | Beijing Hainachuan Automotive Parts Co., Ltd. | 2011 Excellent Partner Award |
| Aug. 2011 | The Company | Hyundai Mobis | Excellent Supplier Award for the first half of 2011 |
| June, 2011 | The Company | Hyundai Motor | Five-Star Rating for excellent delivery performance |
| May, 2011 | HCC Turkey | Hyundai/Kia Motors | Five-Star Quality Rating |
R&D
R&D Expenditure |
(in million KRW) |
| FY ended Dec. 31, 2013 (Consolidated) |
FY ended Dec. 31, 2012 (Non-consolidated) |
FY ended Dec. 31, 2011 (Non-consolidated) |
|
| Amount | 174,791 | 67,719 | 65,536 |
| % of sales | 3.4% | 3.1% | 3.3% |
R&D Structure
-The Company established its Technology center in Daejeon, South Korea.-The Company has R&D facilities in the following location:
- Korea: 1 facility
- Europe: 2 facilities
- Americas: 1 facility
R&D Activities
-In August 2012, the Company and Hyundai Motor have jointly developed a compact and lightweight air conditioning system, which is 160g lighter than existing products, while offering 43 millimeter more open space to the driver. The extra space will contribute to reducing injury risks at the time of pedestrian collisions. The new air conditioning unit will be installed on Hyundai Motor vehicles. (From a press release, August 24, 2012)Recent Achievements in R&D
| Product | Achievements |
| Auxiliary heating systems |
-Improved performance of heating systems |
| Variable displacement swash plate compressors for A/C | -Enhanced temperature control performance -Improved user comfort (reduced the frequency of engagement/disengagement of the clutch) -Reduced the loss of engine power -Prolonged engine lives -Mass production system introduced since 2004 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Front-end modules | -Increased sales by supplying modules rather than parts -Reduced development costs of automakers -Innovated new car assembly lines -Mass production system introduced since 2002 |
| Compact evaporators | -Developed smaller and lighter evaporators -Expanded space in the vehicle -Acquired technology to develop more compact air conditioner systems -Achieved cost savings by reducing raw materials -Introduced in mass production since 2003 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Thin condensers | -Developed smaller and lighter condensers -Expanded space in the vehicle -Acquired technology to develop more compact air conditioner systems -Reduced coolant consumption -Mass production introduced since 2003 -The company currently is applying for a number of patents in and outside Korea |
| Wave type cooling fans | -Low noise -Mass production introduced since 2003 -Has been acquiring and currently applying for a number of patents in and outside Korea -Received the U.S. Automotive News PACE Award in 2007 |
| Large capacity compressors | -Established lineup of HS compressor by developing a 2,000cc class compressor to cope with small to large vehicles -Introduced for luxury models of automakers in Korea and overseas since 2005 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Clutchless pulleys | -Improved gas mileage by reducing weight -Improved riding comfort by reducing clutch noise -Mass production introduced since 2008 -The company is currently applying for a number of patents for these pulleys in and outside Korea |
| Intercoolers |
-Developed environmentally friendly products compliant with Euro III and IV |
| A/C System for hybrid vehicles | -Developed technologies to reduce engine power; developed highly efficient systems and parts -Mass production introduced since 2005 -The company has acquired and currently is applying for a number of patents in and outside Korea |
| Technologies to reduce odor of automotive A/C | -Developed coating fluid that minimizes the attachment of odor on the surface of an evaporator and has excellent corrosion resistance -Mass production introduced since 2006 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
|
Injection molded plastic technology using Mucell crafting technique |
-Improved gas mileage and reduced weight by developing lighter and stronger plastic by applying hollow injection molding technology -Mass production introduced since 2006 -The company is currently applying for a number of patents for this technology in and outside Korea |
| Automatic windshield defoggers | -An automatic fog detection and prevention system for windshields -Enhanced driving safety and comfort -Has been in mass-production since 2008 -The company is currently applying for a number of patents for these defoggers in and outside Korea |
| Refrigerant leak evaluation systems | -In January 2008, the Company's refrigerant leak evaluation systems for car air conditioning systems were certified by the EU authorities |
|
RS compressors |
-The company optimized this compressor's product packaging by eliminating the use of intake valves -Improved air conditioning efficiency and fuel economy -Has been in mass-production since 2008 -The company is currently applying for a number of patents for these compressors in and outside Korea |
| Cluster Ionizer | -The Cluster Ionizer with deodorizing and antibacterial effects reduces evaporator odor to enhance air quality in the cabin -Has been in mass-production since 2008 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Laminated oil coolers | -Developed high-performance transmission cooling systems, which expanded and enhanced the Company's product line -Has been in mass-production since 2009 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Clutchless variable compressors | -Improved vehicle fuel efficiency -Has been in mass-production since 2009 -The company is currently applying for a number of patents in and outside Korea |
| Clutches with aluminum field coils | -Replaced copper coils with aluminum coils to develop lighter and more fuel efficient products -Has been in mass-production since 2009 -The company is currently applying for a number of patents in and outside Korea |
| Double-pipe heat exchangers |
-Improved the efficiency and performance of air conditioner systems |
| Electric compressors | -Added electric compressors to its product lineup to respond to the growing hybrid and electric vehicle market -Has been in mass-production since 2010 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Oil warmers and coolers for automatic transmissions | -Improved efficiency of transmissions and gas mileage -Has been in mass-production since 2011 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| High voltage PWM PTC heaters | -For electric vehicles -Has been in mass-production since 2011 -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Air-conditioning load reduction system using CO2 sensors | -Air circulation control systems using CO2 sensors -Improved fuel efficiency; and enhanced cooling, heating, dehumidification and ventilation performances -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Compact HVAC | -Has been in mass-production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Air delivery system for fuel cell vehicle | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Front end module with pedestrian protection |
-Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Design of high voltage fan and inverter for fuel cell vehicle | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Heat pump system for EV | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Metal seal fitting | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Magnesium alloy pulley | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Air mix door for electric vehicles | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Cold storage evaporator | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
| Hybrid heater core | -Plans to start mass production -The company has been acquiring and currently is applying for a number of patents in and outside Korea |
Investment Activities
Capital Investment Plans
<Brazil>-In December 2013, the Company announced plans for a new manufacturing facility in Atibaia, in the state of Sao Paulo, Brazil. The site will assemble heating, ventilation and air conditioning (HVAC) components for automakers in the region. At full production, the new operation is expected to employ nearly 100 hourly and salaried employees. The facility will include 3,000 square meters (approximately 32,000 square feet) of manufacturing space, with room for expansion based on business needs. Production is expected to begin in the second quarter of 2014. The new manufacturing facility, HVCC Climatizacoes do Brasil Industria e Comercio Ltda., is the first plant for HVCC in South America. The new Brazil operation expands the number of countries with HVCC operations to 19. (From a press release on December 13, 2013)
<Czech Republic>
-In November 2013, the Company announced the opening of a new production hall at its Hluk manufacturing facility in the Czech Republic. This expansion will increase Hluk's production capacity for exhaust gas recirculation (EGR) coolers and radiators for European vehicle manufacturers by approximately 20 percent. Employing approximately 430 people, the plant currently supplies radiators, EGRs, condensers and intercoolers to global vehicle manufacturers. When the facility reaches full production next year, employment is expected to increase by about 140 people. The new production hall expands Hluk's capacity by 8,000 square meters to a total of 25,256 square meters. (From a press release on November 8, 2013)
<Russia>
-In September 2013, the Company announced the start of manufacturing operations on the premises of an industrial partner in Togliatti, Russia. This is the first time that HVCC set up a manufacturing plant in Russia. The new facility, Halla Visteon Rus LLC, will initially assemble cooling modules and heating, ventilation and air conditioning (HVAC) units for automakers in the country. The number of employees is anticipated to reach nearly 300 over a three-year period. (From a press release on September 3, 2013)
<USA>
-In July 2013, the Company increased the production capacity of Alabama plant operated by Halla Visteon Climate Control USA, LLC, adding 30,000 square feet to existing 260,000 square-feet facility. The plant manufactures HVAC unit and front end modules.
Capital Investments in FY ended Dec. 31, 2013
| Division | Type of investment | Purpose of the investment | Invested amount (in billion KRW) |
Project period |
| Automotive air conditioning systems | Additional facility | -Expanding production capacity | 101.8 | Jan. 2013 - Dec. 2013 |
| New facility with automated lines | -Producing products for new car models -Cutting costs -Improving productivity |
100.1 | Jan. 2013 - Dec. 2013 |
|
| Total | 201.9 | - |
Capital Investments for FY ending Dec. 31, 2014 and After
| Division | Type of investment | Purpose of the investment | Amount of investment (in billion KRW) |
FY2014 | FY2015 | FY2016 |
| Automotive air conditioning systems | Additional facility | -Expanding production capacity | 265.3 | 89.3 | 88.0 | 88.0 |
| New facility with automated lines | -Producing products for new car models -Cutting costs -Improving productivity |
394.7 | 130.7 | 132.0 | 132.0 | |
| Total | 660.0 | 220.0 | 220.0 | 220.0 | ||