MAHLE Group China Business Report FY ended Dec. 2012

Business Highlights

- The temporary sales losses in Japan and Thailand were offset by continuing sales growth in China, South Korea, and India, which resulted in a slight overall increase for the Asia region once again.(From Mahle group's 2011 annual report)

-Mahle GmbH announced that it is expanding its existing research and development center in Shanghai, China. The location, which comprises central functions such as sales, purchasing, human resources, IT, and finance in addition to research and development, will be expanded by adding three new buildings. Nearly 9,000 square meters of additional lab and office space will be added to the existing 7,000 square meters. The number of employees can be increased from currently 230 to as many as 450. The official opening will take place in November 2012. (From a press release on August 27, 2012)

Sales of subsidiary for FY2012

-Mahle Donghyun Filter Systems Co., Ltd. achieved an annul increase of about 20% in the last 5 years. In 2012, Mahle Donghyun Filter Systems reached sales of 547 million yuan, with an increase of 25.7% on year-on-year basis. Its main customers are Shanghai GM, FAW Volkswagen, BMW brilliance, Shenyang Mitsubishi and Dongfeng Peugeot Citroen.(From a press release on February 22, 2013)

Capacity Expansion

-On December 19, Mahle and Changchun Economic and Technological Development Zone held a signing ceremony. According to the agreement, MAHLE will rent a plant to produce automotive filters, air conditioners, engine manifolds and cylinder heads in the Changchun Economic and Technological Development Zone, mainly for FAW Volkswagen, General Motors, Shenyang Huachen and Beijing Benz. The construction area of the plant is 7435 square meters, the lease period 10 years, which plans to put into operation in April, 2013.    The first phrase is expected to reach sales of 400 million yuan. After the completion, it will reach 500 to 600 billion yuan. (From a press release on December 19, 2012) 


Strategic Alliance

- Mahle Technologies Holding (China) Co., Ltd. announced that it has signed a strategic cooperation agreement with Great Wall Motors. In this cooperation, Mahle would provide Great Wall Motors with the air management system, vehicle thermal system, engine piston, air charge valve and other components, and both parties would plan the synchronous development of a Technology Center. At present, the engines of Models LJ 2.0T, 2.5TCI and 2.8TC applied in Haval SUV and Wingle Pickup have adopted the valves, bearing bushes, filtration systems and other components and parts from Mahle. Both parties had a planned cooperation on the key components and parts used in Haval H6, Voleex C50, Voleex C70 and other engines. (From a press release on June 23, 2011)

High-volume order for assembled camshafts in China

- In March, MAHLE receives a high-volume order for assembled camshafts with production in China for the Chinese engine production of a European passenger car manufacturer.(From Mahle group's 2011 annual report)

 

New Companies and Plants

- Mahle Technologies Holding (China) Co., Ltd. established Mahle Small Engine Components (Chongqing) Co., Ltd., a wholly owned subsidiary to develop, manufacture, assemble, sell, and offer after-sales service for pistons and cylinders. Mahle invested 170 million yuan in this project, planning an operation launch at the end of 2009. The new Chongqing facility will supply 80 percent of its products to the U.S. and Europe


- In 2006, the Company completed its new oil filter plant in the Shanghai Industrial Development Zone, Fengxian District, Shanghai City. Commercial production at this facility started in the same year.

- In April, 2006, Mahle Technologies Holding (China) Co., Ltd. officially started operations in the Shanghai Industrial Development Zone, Fengxian District, Shanghai City. The new Chinese unit consolidated Mahle's core functions in China, including those of product development for eight Group companies, in addition to sales, human resources, IT, and finance. The new facility, which is worth 100 million yuan in investment, is Mahle's eighth R&D facility. The company aims to further shorten the development lead-time and reduce costs by carrying out R&D activities close to its customers. The Group also plans to establish more production facilities in China, projecting its sales in the country to more than triple by 2010 compared to those posted in 2005.

Restructuring

- On January 5, 2009, in order to improve the Group's business efficiency, Mahle restructured its operations by merging Mahle Bearing (Yingkou) Co., Ltd.'s operations into Mahle Engine Components (Yingkou) Co., Ltd. (MECY). As a result of the merger, Mahle's ownership ratio in MECY increased to 79.25 percent. MECY now produces casting parts for vehicles and motorcycles, pistons for gasoline and diesel engines, bearings, and other engine components.


Awards

- In January, MAHLE Engine Components (Yingkou) Co., Ltd. in Yingkou receives the “Best Cooperation Supplier” award.

-In January, MAHLE Donghyun Filter Systems (Tianjin) Co., Ltd. in Tianjin receives the “Excellent Supplier” award.(From Mahle group's 2011 annual report)

R&D

R&D Structure

Mahle established MAHLE Technologies Holding (China) Co. Ltd. in the Shanghai Industrial Development Zone in order to cater to the Chinese market. Mahle China R&D Center, the technical division of the new company, conducts development activities for Mahle's subsidiaries in China.
Name Mahle China R & D Center
Year established 2005
Start of operations April, 2006


-The second phrase of MAHLE Technologies Holding (China) Co. Ltd. R&D center starts operation on 13 November, 2012. It is said that the engineers will rise from 140 at present to 350 in 2015.(From a press release on November15, 2012)

-Mahle GmbH announced that it is expanding its existing research and development center in Shanghai, China. The location, which comprises central functions such as sales, purchasing, human resources, IT, and finance in addition to research and development, will be expanded by adding three new buildings. Nearly 9,000 square meters of additional lab and office space will be added to the existing 7,000 square meters. The number of employees can be increased from currently 230 to as many as 450. The official opening will take place in November 2012. (From a press release on August 27, 2012)

- In China, the Company have launched initiatives to establish closer ties with key universities. The Company's experts will give technical lectures at these universities on a regular basis. In the future, MAHLE will also collaborate with Jiaotong University (Shanghai) and Jilin University (Changchun) as well as the research and development center of a large customer in order to implement joint training and project activities. (From Mahle group's 2011 annual report)

- At present, capacities at our research and development centers in Shanghai are frequently stretched to their limits.  In Shanghai, the Company are planning to expand the testing area considerably and install additional engine test benches.(From Mahle group's 2011 annual report)

- Mahle announced that it will develop new connecting rods at its Shanghai Technical Center in order to meet rising demand for cracking con rods. The new con rods will be produced at its Yingkou Plant. In order to produce improved con rods, in comparison to existing ones, the company, for example, will strengthen the big ends so as to attain optimum lubricating performance; and modify the design of the small ends in order to achieve weight reduction in the con rods, pins, and pistons.

Investment Activities

<Engine Systems and Components>

-The focal region for investment was Asia, where the business unit expanded capacities significantly with a view to further market growth. This primarily affected China, Japan, and India. In all regions, continued investments were made to rationalize the manufacturing processes and introduce new production technologies.

<Filtration and Engine Peripherals>
-Significant capital expenditure was made on expansion activities, particularly at the plant in Shanghai/China.