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5. Brose Fahrzeugteile GmbH & Co. KG Business Report FY ended Dec. 2016

Brose Fahrzeugteile GmbH & Co. KG Business Report FY ended Dec. 2016

Factors
1) Net Sales
-The Company’s sales in the fiscal year ended December 31, 2016 increased by 1.6% to EUR 6,149 million, marking its seventh consecutive year of growth. The Company’s door systems business division and seat systems business division had sales increases of 1.7% and 1.1%, respectively, while its drives business division reported a decline of 3.4% due to changes in its portfolio and consolidation. The overall increase in sales in the Company’s business divisions were partially offset by one-time negative effects from extraordinary items.

Recent Developments

-The Company announced that it manufactured the five millionth front seat structure since the start of production in 2012 for a joint project between Daimler and BMW. By 2026, the Company will have produced approximately 32 million structures. Premium manufacturers use the seat structures in various models such as the Mercedes C-Class and E-Class and the BMW 7 Series and 5 Series. The cross tubes and side panels are made of high-strength steels while most of the metal components have been replaced by plastic in the power seat adjuster. The complete structure weighs less than 15 kilograms, making it approximately 20% lighter than competing structures. The seat is manufactured worldwide in eight plants across four continents. (From a press release on May 23, 2016)

Awards

-The Company received the Body Quality Supplier of the Year and Overall Supplier of the Year from FCA US LLC, during the automaker’s sixth annual Qualitas awards ceremony. (From a press release on July 15, 2016)

Outlook

-In the short term, the Company plans to grow at a rate outpacing the automotive market by an average of 5% per year. The Company aims to achieve this rate of growth through strategic acquisitions. By 2025, the Company expects to have sales of approximately EUR 10 billion.

R&D Structure

-The Company aims to invest approximately 8% of its sales in research and development each year.

Product Development

Products displayed at 2016 NAIAS event
-In conjunction with the North American International Auto Show (NAIAS), the Company held an event presenting some of its next-generation technologies:

• Lightweight door systems: The Company features side-door drive technology that electronically operates hinged doors and provides remote control through mobile devices. The technology also includes an anti-trap protection system to improve safety. The Company is using long-fiber-reinforced thermoplastics in the design, increasing the door’s ability to absorb energy by four times compared to a plastic door, while reducing weight by 11 pounds compared to a steel door.
• Customizable interiors: The Company has also developed a system that allows drivers to use a smartphone application to adjust seat configurations or select an individual profile with personally pre-defined settings. The app can also be used to control functions such as folding rear seats.
• Electric oil pump: The Company applied its expertise in drive train actuators in the development of an electric oil pump. The oil pump consists of an electronically commutated motor, control electronics, and an integrated pump. As the pump can maintain pressure in the transmission when the engine is off, the pump enables start-stop and coasting, allowing for faster engine restarts. The electric oil pump reduces vehicle emissions by up to 10 g/km of CO2. Production of the electric oil pump is expected to begin in 2018.

(From a press release on January 5, 2016)
-The Company will invest approximately EUR 100 million from 2017 through 2019 in future projects related to advanced technology trends such as e-mobility, autonomous driving, connectivity and car sharing. These projects include the development of power side door drives, interior concepts for autonomous vehicles, and power auxiliary systems.

Patents

-The Company files more than 200 patent applications per year.

-The Company expects to invest approximately EUR one billion from 2017 through 2019 in technical equipment and systems and in the expansion of additional locations.

Investments outside Germany

-On November 28, 2016, the Company held a groundbreaking ceremony for its new plant in Taicang, Jiangsu Province, China. This plant is expected to hire 500 people and begin production in 2018. The facility will be built on 60,000 square meters of land, and will produce a range of products including door systems, window regulators, latch modules, seat systems, seat rails, and seat motors. Products will be supplied to automakers including Ford, Geely, Jaguar Land Rover, Volkswagen, and Volvo, with annual sales expected to reach CNY 2.2 billion by 2022. (From news releases issued by multiple sources on December 6, 2016)


-The Company recently held a ceremony to lay the foundation stone for its new 56,000-square-meter manufacturing facility in Queretaro, Mexico. The USD 170 million investment supports growing customer needs and will be the first Company site in North America to produce its easy-entry and lightweight power rear seat structures. The new plant will house vertically integrated technological processes – stamping, welding, painting and final assembly – and create 900 new jobs. Series production is expected to begin in summer 2018. (From a press release on August 18, 2016)


-The Company signed a lease on an approximately 77,000-square-foot manufacturing facility in Spartanburg, South Carolina, U.S. The USD 6 million investment will create more than 60 new jobs. The Spartanburg plant will produce lightweight carrier door systems and systems for on-demand control of cooling air supply for BMW. Series production of both products is expected to begin in August 2017. (From a press release on August 9, 2016)


-In December 2016, the Company announced a GBP 10 million investment in a new paint shop at its facility in Coventry, England. The expansion is expected to create 30 new jobs and will be able to coat more than 3.5 million car seats annually. The expansion is expected to complete in August 2017.