Mando Corporation Business Report FY ended Dec. 2013

Business Highlights

Financial Overview (Consolidated)

(in millions of won)
FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 Rate of
change (%)
Sales 5,633,845 5,059,281 11.4 -
Operating income 313,046 255,928 22.3 -
Net income 177,695 162,055 9.7 -


-In November 2013, the Company announced that Mando Corporation Europe GmbH has acquired a 80 percent share in DSP-Weuffen GmbH, which is headquartered in Lindau, Bayern, Germany. DSP-Weuffen develops driver assistance systems and other technologies. The acquisition of the R&D company is expected to improve Mando's development capability in the area of digital signal processing and thereby facilitate its plan to mass-produce sensors for driver assistance systems. (From a press release on November 4, 2013)


<Renault Nissan>
-The Company is mass producing struts and shock absorbers for Nissan. These products will be used on vehicles based on the CMF1 platform, the first version of Nissan's common module family (CMF) architecture. Mando is expecting to supply products for approximately 98,000 vehicles per year. The application of Nissan CMF entails the use of four modules - engine compartment, cockpit, front underbody and rear underbody - as well as the architecture for electronic components, with each module having appropriate variations. A variety of vehicles can be designed efficiently by combining these modules in different ways. (from a press release on November 12, 2013)

-Mando India Steering Systems Pvt. Ltd. (MIS), an Indian unit of Mando Corporation, has been supplying steering components for the Nissan-Renault Micra compact car. This is the first time for Mando to provide its products to Nissan-Renault. (From a press release, May 20, 2013)

-The Company's Pyeongtaek Plant has started producing brake calipers for BMW's UKL platform. The company was awarded this brake caliper program in August 2010. After spending two years for development and testing processes since January 2011, the company established a new production line in February 2013. The UKL platform was designed for front-wheel-drive vehicles. BMW is planning to produce 212,207 units of vehicles based on this architecture in 2014, and 271,174 units of them in 2017. (From a press release, September 4, 2013)

<Hyundai Kia>
-The Company is mass producing its MGH-80 ABS/ESC units for the Hyundai Tucson and other vehicles. Since 1999, when the original version of the MGH series was launched, the company has produced a total of 20 million MGH products by August 2012. (From a press release, April 25, 2013)

-The Company announced that Mando Corporation Poland Sp. z o. o.(MCP), its subsidiary in Poland, is supplying suspension systems for the Hyundai i30 built at Hyundai Motor Manufacturing Czech and the Kia cee'd assembled at Kia Motors Slovakia. (From a press release, February 15, 2013)

- Mando has been awarded its first contract from Fiat to supply brakes for a new vehicle model, production of which is scheduled to begin in 2014. The program is expected to be worth KRW 176 billion in sales (From a press release on February 21, 2013)

Overseas business

-In November 2013, Mando-Brose Corporation, which is a 50-50 joint-venture between the Company and Brose Fahrzeugteile GmbH of Germany, announced that it has started to mass-produce steering motors at its Incheon Plant. Mando-Brose was established in January 2011. (From a press release on November 1, 2013)

-In June 2013, Mando America Corporation will produce electronic stability control (ESC) systems at its Georgia Plant, starting in June 2013. Annual production capacity for the ESC systems is scheduled to reach 600,000 units. The Georgia facility will also begin production of rack type electronic power steering systems in 2014. The plant, which was completed in November 2012, now has the capacity to manufacture 2.3 million brake calipers per year. (From a press release, June 20, 2013)

-KYB-Mando do Brasil Fabricante de Autopecas S.A. (KMB), a joint venture between the Company and KYB of Japan, started to mass-produce shock absorbers for the Brazilian facility of Hyundai Motor in December 2013. KMB also produces suspension components to Toyota, Renault-Nissan, and PSA. It will start supplying components to General Motors at the end of 2015. (From a press release on January 28, 2014)

-In 2013, Mando Automotive India Limited (MAIL), Mando Corporation's Indian subsidiary, is expecting to achieve KRW 272.4 billion in sales, which will be an 8.5 percent increase from its sales in 2012 (KRW 251.0 billion). In addition to supplying steering and brake components to Hyundai Motor's and Ford Motor's facilities in India, the subsidiary has recently started to provide these components to General Motors, Tata, Renault Nissan, and Mahindra & Mahindra. MAIL is poised to boost business further, hoping to double its annual sales from the 2013 level by 2016. (From a press release on November 22, 2013)

- Mando Corporation announced that it will integrate its two Indian subsidiaries, Mando India Steering Systems Pvt. Ltd. (MIS) and Mando India Limited (MIL) , and will establish a new subsidiary, Mando Automotive India Limited, effective April 1, 2013. The new company will be owned 71 percent by Mando and 29 percent by the Anand Group. In 2012, the total annual sales at MIS and MIL reached INR 12 billion (approximately KRW 240 billion), up 12 percent from the previous year's result. The Group hopes to double the sales at the new integrated subsidiary within the next five years. (From a press release on February 21, 2013)

-In May 2013, Maysan Mando Otomotive Parcalari Sanayi Ve Ticaret A.S.(MMT) announced that it has started operations at its rented production facility. The plant conducts welding and processing of suspension products to meet growing demand in the local market. MMT, which produced 2.7 million suspensions in 2012, is planning to manufacture 3.4 million units in 2013 and 5 million units in 2017. (From a press release, May 17, 2013)


-In October 2013, the Company announced that its Iksan Plant as well as Halla Stackpole Co., Ltd., its subsidiary, received the GM Supplier Quality Excellence Award in Korea in October 2013. This award was given to General Motors' suppliers that achieved 0 ppm during the year. (From a press release on October 10, 2013)

Business plan

- In March 2013, Mando Corporation announced that it will enter into the electric vehicle charger market. The Company and Diamond Electric Mfg. Co., Ltd. of Japan have already signed an agreement, under which Mando will introduce electric charger development technology from the Japanese company. Mando is currently performing trial production of chargers for Hyundai Motors' BlueOn compact EVs, while mass-producing new chargers for Kia Motors' Ray EV. It is also developing new chargers for an medium-sized EV, planning mass-production launch in 2014. (From a press release on March 12, 2013)


R&D Structure

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

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

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

R&D Expenditure

(in millions of won)
FY ended Dec. 31, 2013 FY ended Dec. 31, 2012 FY ended Dec. 31, 2011
Amount 208,244 189,163 151,845
% of sales 3.7% 3.7% 3.3%

R&D Activities

-In December 2013, the Company announced that it has developed an automatic emergency braking (AEB) system and a lane keeping assist system (LKAS). These systems will be supplied to Korean automakers, starting at the end of December 2013. Since 2010, the company has been developing and producing various driver assistance technologies such as Smart Parking Assist Systems (SPASs), Smart Cruise Control (SCC) systems and Blind Spot Detection (BSD) systems for Korean OEMs. (From a press release on December 12, 2013)

- In July 2013, the Company said it was performing the testing of its Smart Damping Control (SDC) system that can adjust damping force electronically. The system can control the vehicle's vibration absorption performances based on the road surface conditions and vehicle movements detected by various sensors. The new SDC system will be used on the successor model to the Hyundai Genesis. (From a press release on July 8, 2013)

Investment Activities

Capital Expenditure (FY ended Dec. 31, 2013)

(in millions of won)
Business division Investment programs Amount
Brake Revamping and expanding ABS production lines 3,103
Revamping and expanding caliper production lines 10,105
Revamping and expanding master cylinder and booster production lines 4,403
Others 29,679
Subtotal 47,290
Steering Revamping and expanding column-type electric power steering production lines 15,601
Revamping and expanding rack-type electric power steering production lines 1,261
Revamping and expanding  rack & pinion power steering production lines 9,432
Others 12,602
Subtotal 38,896
Suspension Revamping and expanding shock absorber production lines 1,677
Revamping and expanding strut-type suspension production lines 534
Others 4,966
Subtotal 7,207
Others 35,149
Total 128,542