American Axle & Manufacturing Holdings, Inc. Business Report FY ended Dec. 2012

Business Highlights

Financial Overview

(in million USD)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 Rate of change (%) Factors
Net Sales 2,930.9 2,585.0 13.4


Operating Income 156.4 223.4 (30.0) -

1) Net Sales
-Net sales increased by 13.4% to USD 2,930.9 million in 2012 as compared to USD 2,585.0 million in 2011. The Company's sales in 2012, as compared to 2011, reflect an increase of approximately 3.8% in production volumes for the major North American light truck and SUV programs the Company currently supports. These increases reflect the improvement in both general economic conditions and market conditions in the automotive industry. The increase in sales also reflects the favorable impact of new product launches, many of which support passenger car platforms.


-The Company announced that it has acquired full ownership of e-AAM Driveline Systems AB (e-AAM) in Trollhattan, Sweden. e-AAM, previously a joint venture between the Company and Saab Automobile AB (Saab), was created to provide customers with solutions for electric driveline systems including electric all-wheel-drive (eAWD), plug-in hybrids, and full electric vehicles. (From a press release on February 29, 2012)


Recent Developments

-The Company announced that its backlog of new and incremental business launching from 2013 through 2015 is estimated at USD 1.25 billion in future annual sales. This reflects an approximately 4% increase when compared to the previous three-year backlog for 2012-2014. Over 50% of the Company's USD 1.25 billion new and incremental business backlog for 2013 - 2015 is for customers other than GM. This includes new and expanded orders supporting multiple global vehicle manufacturers including Chrysler, Daimler Truck, Ford, Honda, Jaguar Land Rover, Mercedes-Benz, Nissan, Tata Motors, Volvo Powertrain and others. In addition, approximately two-thirds of the Company's USD 1.25 billion business backlog is for passenger car, crossover vehicle and commercial vehicle programs. Approximately 40% of that is for programs sourced outside of North America. These awards support the Company's expansion in the growing global markets of Brazil, China, India and Thailand. (From a press release on December 4, 2012)

-The Company announced that it is now manufacturing and assembling transfer cases for Jaguar Land Rover. Start of regular production began in August 2012 at the Company's Glasgow Manufacturing Facility in Scotland. The Company and Jaguar Land Rover collaborated on the manufacturing of the design of the transfer case that is featured in the Land Rover "Defender". (From a press release on September 26, 2012)

-The Company announced that it producing rear drive modules for Mercedes-Benz in China and commercial vehicle axles for Daimler Truck in India.


-Based off of the Company's current business backlog lasting from 2013 to 2015, the Company anticipates a compound annual growth rate (CAGR) exceeding 10% through 2015. This is double the growth rate expected for the automotive industry, which is expected to grow between 4%-5% based on current estimates.


R&D Expenditure

(in million USD)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 FY ended Dec. 31, 2010
Overall 123.4 113.6 82.5

R&D Facilities

-The Company has technical centers in Auburn Hills and Rochester Hills, Michigan.

-The Company announced the opening of the AAM Winter Test Center in Arjeplog, Sweden. The site provides access to 15 winter road surfaces and lake test sites on the Colmis Proving Grounds. The new Test Center develops and tests the Company's product technologies, including EcoTrac brand of all-wheel-drive systems and the e-AAM plug-in hybrid, electric all-wheel-drive, and electric vehicle systems. (From a press release on March 9, 2012)

R&D Activities

-In 2012, the focus of the R&D investment is on developing innovative driveline and drivetrain systems and related components for light trucks, passenger cars, SUVs, crossover vehicles and commercial vehicles in the global marketplace.

-The Company continues to focus on electronic integration in its products to advance their performance. The Company also continues to support the development of hybrid and electric vehicle systems. Special focus is also placed on the development of products and systems that provide customers with advancements in fuel efficiency and emissions reduction and improved performance metrics such as noise vibration harshness (NVH) and power density.

Product Development

<Disconnecting all-wheel drive system>
-The Company has developed a disconnecting all-wheel drive system for front-wheel drive based vehicles called the EcoTrac disconnecting AWD system. The EcoTrac system only engages AWD when the vehicle senses that it may be necessary, otherwise allowing the vehicle to use its primary front wheel drive system. By only using AWD when necessary, the EcoTrac system provides improved fuel economy and enhanced vehicle control. This system will be featured on a major passenger car and crossover vehicle platform that will be launched in 2013.

Investment Activities

Capital Expenditure

(in million USD)
  FY ended Dec. 31, 2012 FY ended Dec. 31, 2011 FY ended Dec. 31,2010
Overall 207.6 163.1 108.3

-In 2012, the capital spending primarily supported the Company's significant global program launches within its new and incremental business backlog.

Investment Outside U.S.A.

-The Company announced the opening of its Chennai Manufacturing Facility (CHMF), located in the industrial park of Mahindra World City in southeastern India. Products manufactured at the facility include a family of front and rear axles for commercial vehicles. The new plant is the Company's third manufacturing facility in India. (From a press release on August 9, 2012)

-In May 2012, the Company opened a second location of its subsidiary, AccuGear, Inc. in Silao, Guanajuato, Mexico. This facility manufactures metal-formed products.