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5. Valeo Group (China) Business Report FY ended Dec. 2017

Valeo Group (China) Business Report FY ended Dec. 2017

New Plant

-On April 26, 2018, Longxing Industrial Park, Liangjiang New Area, Chongqing, said that the construction of Valeo's plant in Chongquing is making a smooth progress and that the construction of the steel framework has already begun. The project requires an investment of Chinese yuan (CNY) 210 million. The plant is going to have floor space of 26,247.12 square meters in total and has a facility to produce steel frame and a fire protection station. Its main products are automotive lights. Upon completion, it's expected to generate sales of CNY 600 million. The installation of the concrete body of the attached plant is already completed. The construction of the steel frame main plant is now in the critical stage. Interior works and preparations for the installation of production equipment are also in progress at the same time. The entire facilities is scheduled to complete at the end of 2018 and the official production launch is scheduled in early 2019. (From some releases on April 26, 2018)

New Company

-In July 2018, Fawer Automotive Parts Limited Company announced that it has signed an agreement with Valeo Siemens eAutomotive Germany to establish a joint venture in Changshu, the Fawer Valeo Siemens eAutomotive Parts (Changshu) Co., Ltd. The registered capital of the joint venture will be 250 million yuan, of which Fawer holds 50.5% of the total capital, Valeo Siemens holds 49.5%. The new Company will be mainly engaged in the manufacture and sale of inverters for new energy vehicles and the after-sales service of imported parts. (From a press release on July 3, 2018)

-In February 2018, Fawer Automotive Parts Limited Company and Valeo Siemens eAutomotive Germany signed a memorandum of cooperation that they intend to establish a joint venture in Changshu, which will produce the inverters for new energy vehicles (powertrain) with the proprietary technology and intellectual property owned by Valeo Siemens. Fawer will hold 50.5% of the total capital of the joint venture, Valeo Siemens holds 49.5%. (From a press release on February 9, 2018)

Display of LV-HP Electric System

-In April 2018, Valeo announced that it will exhibit low-voltage, high-power electric system at the 2018 Beijing Auto Show. Such system is the product jointly developed by Valeo and Shanghai Jiaotong University, which can achieve continue voyage course of 150km and maximum speed of 100km/h on the two-seater prototype, so this system must be able to cope with the requirements of China's fast-growing BEV market. In addition, it is said that it will also exhibit the battery thermal management system(BTMS) which is necessary for the battery life and cruising range optimization, the network-connected air cleaning system which protects passengers from external pollution and allergens, and the automatic cleaning system which can keep the “LiDAR”in an optimal state unaffected by the weather. (From a press release on April 25, 2018)

Performance

-In the first half of 2017, Valeo’s sales increased by 16% to €9.5 billion, in which the OEM’s supporting sales was €8.2 billion, achieved 9% year-on-year growth. And the OEM’s supporting sales in the Chinese market reached €1.1 billion, achieved 24% year-on-year growth. The total orders of the Group increased 16% to €14.9 billion (not including the €3 billion from the Valeo Siemens New Energy Vehicles joint venture), of which 41% orders come from Asian market, exceeding the European market with 36% orders; the Chinese market accounts for 26%, of which about 40% come from local Chinese automakers. In the first half of 2017, the total R&D investment of the Group reached €945 million, which exceeds 11% of the OEM's supporting sales. (From a press release on August 8, 2017)

Investments in China

-In December 2017, Valeo announced that it will invest €50 million in Cathay CarTech Fund, the first RMB fund of Cathay Capital, in order to fund China's automotive and mobile travel environmental protection systems. The Cathay CarTech plan, which is also funded by the Yangtze River Industry Fund, focus to China, and has invested €200 million to the emerging enterprises and start-ups. (From a press release on December 11, 2017)

Strategic Cooperation

-In April 2017, GAC Trumpchi held a signing ceremony at the Shanghai Auto Show with ten suppliers of Denso, Continental AG, Aisin Seiki, Faurecia, Valeo, Schaeffler, Dicastal, Michelin, UAES and Zhejiang Wanxiang Precision Industry Co.,Ltd. (From a press release on April 27, 2017)

Supporting Information

-In March 2017, Chery released an E4T15B Engine in Wuhu. Such engine was jointly developed by Chery, Honeywell, the supplier of turbocharger, Valeo, the supplier of components for power system and BOSCH, the supplier of electronic control system, whose thermal efficiency can reach up to 37.1%. And the Tiggo 7DCT will be powered by the Chery E4T15B. (From a press release on March 24, 2017)

R&D structure

-By the end of December 2017, Valeo has 20 research centers and 35 development centers around the world.

-As of April 2017, Valeo employs over 5,100 engineers and 89 experts in China.

R&D facilities

-Valeo began operations of Valeo China Technical Center, a new and the largest R&D center in central China, on April 5, 2017. The facility is located on approximately 8,000 square meters of land in the center of the Wuhan Economic & Technological Development Zone. It employs approximately 450 engineers and 8 specialists. The center consists of a technical center for lighting systems and a technical center for driver assistance systems. (From news releases issued by multiple sources on April 12, 2017)

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