GRUPO KUO, S.A.B. de C.V. (Formerly DESC, SA. De CV) Business Report FY ended Dec. 2019

Financial Overview

 (in million MXN)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 Rate of Change
Net Sales 27,796.8 27,282.2 1.9 1)
Operating Income 3,042.3 3,639.0 (16.4) -
-Transmissions SBU sales 4,920.2 4,131.7 19.1 2)
-Aftermarket (Auto parts)SBU sales 3,121.4 3,083.2 1.3 3)
Sector Sales 8,041.6 7,214.9 11.5 -

1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2019 increased by 1.9% over the previous year to MXN 27,796.8 million. While the Company’s Consumer and Automotive sectors saw growth during the fiscal year, a steep decline in sales from the Chemical sector offset most of the gains.

2) Transmissions SBU sales
-Sales for the Company’s Transmissions SBU increased by 19.1% to MXN 4,920.2 million in the fiscal year ended December 31, 2019. The increase in sales of the business unit was primarily due the completion of the dual-clutch transmission project, with infrastructure developed for the system’s mass production. The Company supplies DCTs for two platforms.

3) Aftermarket SBU sales
-The Aftermarket SBU had sales of MXN 3,121.4 million in the fiscal year ended December 31, 2019, an increase of 1.3% from the previous year. An increase in demand for brake lines contributed to the unit’s increase in sales.


-The 2020 Ford Mustang Shelby GT500, which launched in August 2019, uses the Company’s TR-9070 seven-speed dual-clutch transmission to provide both straight-line performance and stability for lateral acceleration applications. The dual-clutch transmission is able to execute gear shifts within 80 milliseconds in the Mustang Shelby’s sport mode. (From Ford press release on August 5, 2019)

-The Company’s TR-9080 DCT is the transmission used on the 2020 Chevrolet Corvette Stingray. (From a press release on September 24, 2019)

R&D Facilities

-The Company’s Transmissions Strategic Business Unit has research and development facilities in Belgium and Mexico.

R&D Activities

-In 2019, the Company’s Tremec unit completed its dual-clutch transmission project. The project involved the joint work of a multidisciplinary team and the integration of the Company’s production plants in Mexico, the U.S. and Belgium. While the Company is currently manufacturing dual-clutch transmissions for two vehicle models, the flexibility of the dual-clutch transmission design enables it to be used for a variety of other high-performance applications in the future.

-With the strengthening of the Company’s Dynasol joint venture through the contribution of the Company’s emulsion rubber and nitrile businesses in Mexico and China, respectively, the Company has begun to place a larger focus on the development of high-performance tires.

Product Development

TR-9070 dual-clutch transmission
-The Company has developed the TR-9070 DCT, a new seven-speed dual-clutch transmission with 664 lb-ft of torque capacity and shift times of less than one-tenth of a second. The TR-9070 layout is optimized to minimize space and weight. Thus, all of its hydraulics, sensors and clutches are fully integrated into the gearbox. Furthermore, the use of die cast aluminum housings, a compact gear-train arrangement, hollow shafts and a glass-filled polyamide 66 material sump pan all contributed to decreasing the transmission’s weight. (From a press release on February 25, 2019)

TR-9080 dual-clutch transmission
-The Company has developed new versions of the TR-9080 DCT, an eight-speed dual-clutch transaxle transmission. The transmission is capable of shifting gears in less than a tenth of second without interrupting torque. A mechanical limited slip differential version and an electronically-actuated limited slip differential version are both available, with torque capacity of 590 lb-ft and capable of managing input speeds of up to 7,500 rpm. (From a press release on September 24, 2019)

Capital Expenditures

 (in million MXN)
  FY ended Dec. 31, 2019 FY ended Dec. 31, 2018 FY ended Dec. 31, 2017
Automotive 576.4 1,126.5 990.1
Chemical 478.9 386.2 389.3
Consumer 1,076.6 2,001.4 1,919.6
Others - 23.5 1.3
Excluding Joint Ventures (638.1) (415.3) (304.2)
Total 1,493.7 3,122.2 2,996.2