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5. Faurecia (China) Holding Co., Ltd. Business Report FY ended Dec. 2021

Faurecia (China) Holding Co., Ltd. Business Report FY ended Dec. 2021

-Factors：

1）Increase in automobile production in Asia in 2021 and year-on-year growth in China.
2）In 2021, orders from Chinese OEMs amounted to EUR 1,035.4 million, representing 6.6% of the Group's total sales.

-Outlook：

Faurecia's independent operating guidance for 2022: Sales will reach EUR 17.5 to 18 billion with an operating margin of 6% to 7%.
(Hella's results will be officially consolidated into Faurecia's financial statements as of February 1, 2022, and the Group's consolidated guidance for fiscal year 2022 will be published on April 28, 2022)

"FORVIA" as the newly combined Group

-Faurecia successfully completed the acquisition of a controlling stake in Hella on January 31, 2022. They are targeting to reach sales above EUR 33 billion, operating margin above 8.5% and about EUR 1.75 billion of net cash flow in 2025. The combined Group operates through six Business Groups – Interiors, Seating, Electronics, Clean Mobility, Lighting and Lifecycle Solutions – with leading positions and critical size. It deploys a portfolio of 24 product lines. The combined Group will extend its reach, strengthening proximity and customer intimacy, accelerating growth in Asia, and providing an enhanced electronics and electrification offer (BEVs & FCEVs). The Group’s exposure to Internal Combustion Engine (ICE) will be reduced to about 10% of its sales in 2025. The quality of these sales is part of the Company’s strategic response to this key transformation challenge for the automotive industry. To align the business models of both companies, Hella has formally established three Business Groups (Electronics, Lighting and Lifecycle Solutions), headquartered in Lippstadt (Germany), each with full P&L accountability, and both companies will continue to converge towards common processes to ensure a consistent Group approach and consolidation. (From a press release on February 7, 2022)

The “Cockpit of the Future” relocates to Shanghai

-Faurecia SE (Faurecia) announces that its main development business activities of the “Cockpit of the Future” have been transferred to the technology center and headquarters of Faurecia China in Shanghai from January 1, 2022. Leveraging Faurecia's well-known method for system integration, the Shanghai-based innovation center will be dedicated to developing innovative cockpit solutions, researching insights into Chinese consumers, and integrating businesses of innovative interior design, the engineering of complete cockpit, the development of Apps, services, and electromechanical architecture, as well as smart marketing. (From a press release dated January 17, 2022)

Acquisitions

-Faurecia announced that CLD has been recently certified by the Chinese central government as the first domestic producer of Type IV hydrogen tanks. On April 30, 2021 Faurecia successfully completed the final closing of its acquisition of CLD, a leading Chinese manufacturer of hydrogen tanks. Unlike Type III tanks, which use an aluminum liner instead of a plastic one, Type IV tanks are lighter and thus better suited to mobility applications. Through the acquisition of CLD and thanks to the certification of Type IV tanks, Faurecia will further energize its momentum for hydrogen mobility in China. (From a press release on May 25, 2021)

-Faurecia announced that following approval from the appropriate regulatory bodies, it has completed the acquisition from DAS Corporation of 50% of their joint venture with BAIC, Beijing BAI DAS Automotive System Co., Ltd. This operation leads to Faurecia establishing a 50-50 joint venture with BAIC, one of China’s largest automotive manufacturers which has partnerships with Hyundai and Daimler. The joint venture will change the company name to Beijing BAIC Faurecia Automotive Systems Co., Ltd. The joint venture is the main seating supplier for BAIC Hyundai and has strong development opportunities with other BAIC-owned brands and partners. Headquartered in Beijing, the joint venture has 450 employees and 4 plants in Beijing, Chongqing, Huanghua and Xiangtan. Faurecia now has joint ventures with six leading Chinese automakers. (From a press release on January 28, 2021)

Technology Innovation

-Faurecia announced that it has ramped up its ‘in China’ innovation capability to develop new solutions better adapted to local needs and be faster in bringing market-ready solutions to its customers. Faurecia also revealed at the Shanghai Auto Show a new take on lighting in the cockpit. With its LUMi range of seat lighting technologies, Faurecia gives car makers an innovative and stylish way to integrate ambient lighting, alerts, information, control panels or high-quality color-lit logos in the seat front, headrest, seat back and side valence. To make it easier for the driver and other occupants to interact with the vehicle, HMI design and intuitive controls across the cabin have been created including a multimodal HMI (voice recognition, gesture recognition, driving behavior detection) developed with Faurecia’s innovation partner HORIZON ROBOTICS in China as well as a new crystal touch panel which combines luxury design with a multi-functional surface. To enhance onboard wellness, Faurecia has created a new fragrance headrest to create an individual odor zone for each seat. Fragrance diffusion can be linked to other components in the cockpit. For a smarter and safer driving experience, Faurecia provides driver and occupant monitoring using camera and radar. Additional technology to improve driver awareness and safety include e-mirrors which bring into the cabin a more dynamic driving view and alerts (lane change assistance, parking support, bicycle or pedestrian detection) about the surrounding environment. (From a press release on April 22, 2021)

-Faurecia announced that it will demonstrate its latest innovations for the “Cockpit of the Future” and “Sustainable Mobility” during the Auto Shanghai 2021. It will reveal a complete cockpit interior to provide an immersive, personalized journey adapted to the needs of Chinese consumers. From smart surfaces, innovative HMI, occupant monitoring and wellness applications to full cabin infotainment with pillar-to-pillar displays, Faurecia is demonstrating its full range of ready-to-integrate seating, interior and electronic technologies to support OEMs in China. The demonstrator also showcases Faurecia’s unique LUMI innovation which embeds lighting features within the seating, enabling OEMs to create a differentiating interior styling. Faurecia brings to Auto Shanghai a commercial vehicle hydrogen demonstrator. Faurecia has developed a 7-tank hydrogen storage system designed to provide over 700 km autonomy for long distance and high load commercial trucks. The demonstrator also integrates a fuel cell stack system developed by Symbio, designed to provide a compact and efficient solution delivering net power of 75kW for the needs of heavy-duty trucks. Faurecia has developed its Electrically Heated Catalyst, designed to reach faster the optimal pollutant conversion temperature (less than 10 seconds) and using half the energy of other technologies on the market. The Electrically Heated Catalyst anticipates the upcoming China 7 emissions standards. (From a press release on April 6, 2021)

R&D Center

Awards

-In 2021, Faurecia China's four business divisions received the following awards.

Factory Construction

-Faurecia Clarion Electronics officially broke ground on a green and intelligent "Factory of the Future" to be built in Fengcheng. The plant will follow industry-leading standards in automation, carbon neutrality, and green building, and upon completion will further strengthen the supply chain for Faurecia's automotive electronics business unit. With Faurecia's acquisition of Hella on January 31, 2022 and the launch of the new group FORVIA, Hella's Car Electronics and Faurecia's Clarion Electronics will be combined to form the Car Electronics Division, which will accelerate the transformation and optimization of both companies in the field of electrification and intelligence. (From a press release dated February 15, 2022)