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5. Mando Corporation Business Report FY ended Dec. 2019

Mando Corporation Business Report FY ended Dec. 2019

Restructuring

-The Company is entering Business Unit (BU) system from 2019. It began operating four BUs: Brake, Steering, Suspension, and ADAS (advanced driving support system) Units. The company intends to focus particularity on the ADAS, which is a core technology for autonomous driving, to boost its competitiveness in the global market. Mando’s sales in 2016 were Korean won (KRW) 287.3 billion, but in 2018, they probably reached KRW 494.4 billion. Its supply is currently focused on Hyundai and Kia, but the company aims to extend the reach to other global automakers in the future. (From some releases on January 14, 2019)

Business Developments

-The Company has signed a business agreement with H2KOREA, an organization promoting the use of hydrogen energy in South Korea, regarding the development and the use of an app for providing information about hydrogen stations. People in South Korea currently can confirm the locations and primary data on the hydrogen stations only on the website. So, the users of the stations are now sharing related information via social networking services. Therefore, the parties are going to develop and offer the new app, starting with an Android version and later for other operation systems, free of charge. They wish to contribute to the broader use of hydrogen-powered vehicles and the revitalization of the hydrogen economy by providing the service platform for hydrogen fuel cell vehicles, according to Mando. (From some releases on October 22, 2019)

Contracts

-The Company has signed a contract with a US electric vehicle (EV) manufacturer, Canoo, on the supply of fully-electrically-controlled steering systems. Under the new deal, Mando is going to supply 0.5 million sets of the system over the five to six years from 2021. The sales under the contract are expected to reach into several hundreds of billions yuan (CNY) or several million yens (JPY). The system from Mando will be used for Canoo’s seven-seater microbus EV models to be released in the U.S. and China. (From some releases on October 21, 2019)

-Announced that it concluded a contract for supply of ADAS (Advanced Driver Assistance System) to Mahindra & Mahindra Ltd. of India. With the signing of the contract, Mando will advance into the ADAS market in India. The ADAS for which Mando has won an order this time is the front radar and the front camera of AEB (Autonomous Emergency Braking) which controls the vehicle in an emergency. The devices will be developed with the accumulated technology and knowhow of Mando, specifically for uneven road conditions in India. Efforts will be made especially for the development of specialized specifications that can detect large animals, by using the big data collected through Mando's R&D centers in India. (From a press release on April 16, 2019)

-In January 2019, the Company held an event to celebrate the Ford C519 Flawless Launching at the steering business headquarters in Wonju. Mando now delivers steering gears and intermediate shafts for the Ford Focus (code name: C519). It began the mass production of the parts for the Focus in May 2018 in Wonju and in September in Poland and China. Since then, the company has been producing the parts flawlessly for more than 250 days. The plant in Wonju currently manufacturers steering gears, steering columns, intermediate shafts, C-EPS, and R-EPS, and delivers them to Hyundai, Kia as well as Ford, GM, Fiat, and Nissan. (From a press release on January 21, 2019)

Awards

-On August 9, 2019, the Company received "Quality Excellence Award" from Tata Motors Limited at 'Tata's Annual Suppler Conference 2019 held in Rome, Italy. Mando delivered brake systems such as calipers and master boosters with zero defects. Also, it successfully launched the mass production of electronically controlled steering (EPS) while reducing development time. Tata acknowledged such superior performance. Mando also won "Best Supplier Award" and "Best Developer Maker Award" in the steering category at Mahindra & 'Mahindra' supplier event held in Berlin, Germany, in June 2019. Mando's Indian arm supplies products such as chassis products and advanced driver assistance systems (ADASs) to Hyundai/Kia and Ford in addition to Tata and Mahindra. (From some releases on August 21, 2019)

R&D Structure

<Research centers in Korea>
-Sungnam, Gyeonggi-do (Mando Global R&D Center)

• On September 24, 2019, the Company opened WG campus, a home for new business at its global research and development center in Pangyo, Gyeonggi. This organization consists of F3 (Future, Frontier & Freedom) Lab, Electric Vehicle (EV) Lab, and New Business Teams. Its primary focus is on developing competitive technologies for next-generation vehicles such as EVs, autonomous driving cars, and connected cars. (From some releases on September 26, 2019)

<Research centers outside Korea>
-U.S. (Detroit, Michigan)
-China (Beijing)
-India (Haryana)
-Germany (Frankfurt)

• The Company opened a new research and development center in Frankfurt, Germany. Mando has had a European research center in Frankfurt since 2010, but it constructed a new building to expand the facility. The new R&D center in Europe has 120 researchers who work on research and development of technologies for next-generation vehicles, including autonomous driving vehicles and electric vehicles. (From some releases on September 19, 2019)

<Winter Test Center>
-U.S. (Sault Ste. Marie, Michigan)
-China (Heihe, Heilongjiang province)
-Sweden (Arjeplog)
-New Zealand (Wanaka)
 

R&D Activities

-In January 2019, the Company test drove its level-4 complete self-driving car on the public road near the Pangyo Global R&D Center. Mando’s autonomous car called the Hockey traveled 2.7 kilometers on the public road near the R&D center for approximately 15 minutes to demonstrate its capacity to run autonomously on crowded urban roads. “The company is going to beef up the AI technology to make it good for commercial use by 2021,” Mando explained. (From a press release on February 1, 2019)