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4. Hanon Systems Corp. (Formerly Halla Visteon Climate Control)
5. Hanon Systems Corp. (Formerly Halla Visteon Climate Control) Business Report FY ended Dec. 2015

Hanon Systems Corp. (Formerly Halla Visteon Climate Control) Business Report FY ended Dec. 2015

Transfer of Shares

-In June 2015, Visteon, the former largest shareholder, completed the sale of its approximately 70 percent ownership interest in the Company to an affiliate of Hahn & Company, and Hankook Tire Co. Ltd. In July 2015, the Company changed its name to Hanon System Corp. from Halla Visteon Climate Control Corp.

Divestiture

-The Company announced that it is planning to transfer the Electronics Product Group of Visteon Automotive Systems India Private Ltd. to either Visteon or Visteon Technical and Services Centre Private Limited. After the transfer, the Indian subsidiary will focus on the climate control and heat management business, which is its core division. A sales contract for the deal, which is worth USD 500,000, is planned to be concluded by the first quarter of 2016. (From a press release on June 5, 2015)

R&D Structure

-The Company established its Technology center in Daejeon, South Korea.

-The Company has R&D facilities in the following location:

• Korea: 1 facility
• Europe: 2 facilities
• Americas: 1 facility

R&D Activities

-The Company announced that its centrifugal air compressor and UV LED photocatalyst have been named Automotive News' 2016 PACE Award Finalists. The centrifugal air compressor supplies compressed air to the fuel-cell stacks of fuel-cell vehicles. The compressor has already been chosen for Hyundai Motor's hydrogen powered vehicles. The UV LED photocatalyst is an air purification technology that removes microorganisms and harmful substances from heating, ventilation, and air-conditioning (HVAC) systems. (From a press release on November 3, 2015)

-The Company and Hyundai Motor have jointly developed a smart climate control system for electric vehicles (EVs). The system can automatically control the inflow of air from outside the vehicle depending on the levels of humidity in the cabin, the temperature inside and outside of the vehicle, and the vehicle's driving speed. This technology can minimize the energy consumption of the vehicle when the air conditioning system is operating. The new climate control system is already used on the Kia Soul EV and is expected to be featured also on hybrid models. (From a press release on November 3, 2015)

-The Company began mass-producing its high-efficiency heat-pump systems for electric vehicles during 2014. Revenues from the sale of these pump systems reached KRW 4.6 billion in the same year. The advanced pump system, which was developed jointly with Hyundai Motor, can extend the range of an electric vehicle with the heater on by over 20 percent. It also reduces energy consumption by 30 to 60 percent. Halla Visteon Climate Control expects that annual revenues from the sales of the heat pump systems will climb to KRW 37 billion by 2017. (From a press release on April 14, 2015)

-The Company will debut its integrated climate control technology called HV iCool at the Seoul Motor Show that will be held from April 3 through April 12, 2015. HV iCool combines the heating, ventilation and air conditioning (HVAC) system, a compressor, and a condenser into a single unit. This integrated unit is 20 to 30 percent lighter than existing solutions, and improves driving range of electric vehicles by over 30 percent. (From a press release on April 3, 2015)

-The Company has developed a new heat pump system for electric vehicles. Unlike a conventional electric heater, which only uses power supplied from the battery to heat the cabin, heat pumps draw heat from external air, thereby reducing power consumption. HVCC's new heat pump system also utilizes the waste heat recycled from the vehicle's motor and inverter as an additional heat source, further extending the vehicle's drive range by decreasing the power drain on the battery. With this innovation, waste heat is harvested by the heat pump to support the vehicle's heating system and meet the desired cabin temperature, even in challenging sub-zero temperatures. This function helps dramatically reduce the vehicle's energy consumption and increases the driving range on a single battery charge by more than 20 percent. HVCC's heat pump system is in production on several vehicles sold globally and will be showcased at the Seoul Motor Show in April 2015. (From a press release on March 9, 2015)

Recent Achievements in R&D

3 Zone control HVAC system

Deodorizing air conditioning technology using UV LED photocatalyst

Capital Investment Plans

-The Company announced that it will establish a plant in Ohio, U.S.A. The facility will be constructed on an 8,825-square-meter plot in Carey, Wyandot County in northeast Ohio. It includes room for expansion based on business needs. The plant will produce heating, ventilation, and air conditioning (HVAC) systems, starting in the middle of 2017. It will serve as the company's 40th manufacturing facility in the world. (From a press release on January 7, 2016)


-The Company announced that it will construct a new plant in Monterrey, Nuevo Leon, Mexico. The plant will produce heating, ventilation, and air-conditioning (HVAC) systems and cooling modules for Kia Motors' plant in Mexico. Production is expected to begin in the second quarter of 2016. (From a press release on October 30, 2015)


-In March 2015, ｔhe Company announced the start of production at its new facility in Sanand, in the state of Gujarat, India. The Gujarat facility will support the company's growing business with global vehicle manufacturers and cater to the requirements of OEMs in the state of Gujarat and western India. The facility has approximately 8,890 square meters (95,691 square feet) of manufacturing space and the capacity to produce 2 million units consisting of heat exchangers; heating, ventilation and air conditioning (HVAC) modules; and air conditioning lines. HVCC has the ability to double its capacity at this facility based on business needs. (From a press release on March 11, 2015)

Capital Investments in FY ended Dec. 31, 2015

Capital Investments for FY ending Dec. 31, 2016 and After