Mando Corporation Business Report FY ended Dec. 2014
Financial Overview (Consolidated) |
(in millions of won) |
| FY ended Dec. 31, 2014* | FY ended Dec. 31, 2013 | Remarks | |
| Sales | 1,721,436 | 5,633,845 | - |
| Operating income | 79,261 | 313,046 | - |
| Net income | 47,893 | 177,695 | - |
*Due to the company split on September 1, 2014, FY ended Dec. 31, 2014 covers a 4-month period from September 1, 2014 through December 31, 2014 in the Group's financial statements.
Outlook
The Company announced that it plans to double its annual sales in China from the current level of CNY 11 billion (approximately KRW 1,799.9 billion) to CNY 22 billion (approximately KRW 3,599.9 billion) by 2018. Currently, about 70 percent of the company's China sales are generated through sales to Hyundai and Kia Motors, while 30 percent are generated through sales to local automakers. Mando aims to increase the sales ratio to local companies by diversifying its customer base. (From a press release on June 26, 2014)
Reorganization
-The Company's plan to move to a holding company structure through the company split has been approved at the company's extraordinary shareholders' meeting. While Halla Holdings Corp. will control its subsidiaries and make investments, Mando will focus on the automotive parts business. The company split is scheduled on September 1, 2014. (From a press release on July 28, 2014)
Contracts
<Volkswagen>
-The Company has won a front brake caliper program from Volkswagen. Between 2017 and 2026, Mando will supply brake calipers for 2 million Volkswagen vehicles per year. The business is expected to be worth KRW 1 trillion in sales. Mando's brake calipers will be used on Volkswagen cars produced in Europe, China, India and Brazil. (From a press release on December 18, 2014)
<Hyundai>
The Company announced that it will supply its shock absorber, called the "hybrid shock absorber", for Hyundai Motor's Aslan semi-large sedan. The hybrid shock absorber is designed to improve riding comfort and driving stability. These products are also used on the Genesis and Grandeur from Hyundai, and the K7 from Kia Motors. (From a press release on October 28, 2014)
<Geely>
The Company has entered into an agreement with Chinese automaker Geely Automobile to supply its brakes and suspensions. The agreement will be effective for a period of ten years from the end of 2016. This is expected to add a total of KRW 630 billion to Mando's sales. Mando's automotive components were chosen for a platform jointly developed, for the first time, by Geely and the Swedish automaker Volvo Cars since Geely had acquired the Swedish automaker. The platform will be used in Volvo brand vehicles produced in China and Europe as well as in Geely's own brand models. (From a press release on August 1, 2014)
Business Partnership
-The Company has signed a strategic cooperation agreement with Great Wall Motor of China. Based on this agreement, Mando will join Great Wall Motor's new car development project from the initial stage to jointly develop parts. Mando expects that the partnership will establish the foundation to expand the supply of parts, while Great Wall Motor anticipating quality stability of its chassis parts. (From a press release on June 30, 2014)
Overseas business
<Germany>
-Mando-Brose Corporation, a 50-50 joint-venture between the Company and Brose of Germany, has begun mass-producing steering motors for the Hyundai i20 compact passenger vehicles built in India. Mando-Brose Corporation, located in Incheon, Korea, was established in January 2011. (From a press release on June 9, 2014)
<Brazil>
-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)
Awards / Certification
-The Company has won Fiat Chrysler Automobile's Supplier of the Year 2014 for its brake products. This is the first time that Mando has received the award from a European automaker. (From a press release on December 3, 2014)
-The Company has been given the Supplier of the Year award from Chrysler, in recognition of high quality and cost-effectiveness of its steering parts. Mando started supplying parts to Chrysler in 2003. This is the second time for Mando to receive the award from Chrysler following the first award in 2011. (From a press release on June 24, 2014)
-The Company has acquired the ISO26262 certification for its electronic stability control (ESC) systems and electric power steering (EPS) systems. ISO26262 is a functional safety standard for automotive electronics. The company has been working on obtaining this certification since 2011, when it formed a designated team for the project. (From a press release on June 16, 2014)
R&D
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)
-The Company held a completion ceremony for Mando R&D Center China (MRC) established in Beijing, China. MRC is the successor to the Mando Beijing R&D Center, which was set up in June 2003. The new 50,000-square-meter building built on 13,000 square meters of land is larger than the former center. Approximately 260 engineers working at the center will conduct research on its products for the Chinese market. MRC will also have a 178,000-square-meter proving ground to check and make sure that its products meet environmental and market requirements. MRC will also work in collaboration with Mando's winter test course in Heihe to develop highly competitive products. (From a press release on June 26, 2014)
-The Company has opened Halla DAS Lab Europe (HDLE) in Amtzell, Germany to design and develop driver assistance systems (DASs). The R&D center, which was previously called DSP-Weuffen GmbH, was acquired by Mando in November 2013. Under the control of Mando, HDLE will focus on the development of sensor technologies for DASs. (From a press release on May 23, 2014)
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% | 3.33% |
R&D Activities
-The Company announced that it has developed a new radar senor for frontal collision avoidance system. This radar sensor is planned to be introduced to the smart cruise control system for a new vehicle that will be released in December 2014. (From a press release on November 4, 2014)-The Company is accelerating the development of autonomous driving technologies. Currently, the company is working on the joint development of Traffic Jam Assist (TJA) system, Cross Traffic Assist (CTA) system, and Smart Parking Assist System (Remote SPAS) with Korean automakers. Mando is already mass-producing its Autonomous Emergency Braking (AEB) system, a fundamental technology for autonomous driving, for Hyundai's Genesis large passenger car. (From a press release on November 1, 2014)
-The Company announced that it has developed an Active Retraction Caliper (ARC). ARC can minimize the friction caused between the brake pad and the brake disk when the brake is not applied. This will improve fuel efficiency on any type of vehicles moving in any driving conditions. Mando is currently developing a regenerative braking system exclusively for hybrid vehicles. The company is already mass-producing its original Active Hydrauic Boost (AHB) that plays an important role in the regenerative braking system. In addition, as part of its exploratory R&D projects, the company is currently developing a Belt-driven Starter Generator for hybrids jointly with a Korean automaker. (From a press release on October 22, 2014)
Investment Activities
Capital Expenditure (FY ended Dec. 31, 2014) |
(in millions of won) |
| Business division | Investment programs | Amount* |
| Brake | Expanding BIR assembly line | 3,810 |
| Revamping MGH80 line | 12,279 | |
| Others | 7,358 | |
| Subtotal | 23,947 | |
| Steering | Revamping column-type electric power steering line | 2,492 |
| Others | 6,502 | |
| Subtotal | 8,994 | |
| Suspension | Expanding S/ABS Curling type line | 1,551 |
| Others | 1,989 | |
| Subtotal | 3,540 | |
| Others | 17,001 | |
| Total | 53,481 | |
Investment outside Korea
<USA>-The Company held a ceremony to mark completion of its second U.S. plant in Hogansville, Georgia. Its site area is 577,000 square meters with a built-up section of 41,000 square meters. The plant will produce electronic stability control (ESC) systems for 600,000 vehicles and supply them to the plants of Hyundai Kia and General Motors located in the U.S. The company will begin producing 170,000 rack-type electric power steering (R-EPS) systems per year from September 2014 and supply them to GM. Mando says the R-EPS production capacity at the plant will be expanded to one million units a year by 2018. (From a press release on July 17, 2014)
<China>
-The Company celebrated the completion of a plant at its Chinese subsidiary Mando (Shenyang) Automotive Parts Co., Ltd. The new plant has a site area of 66,000 square meters and the floor space of 2,600 square meters. The plant has a capacity to produce brake parts for 1.2 million vehicles a year. Starting July 2014, the plant will supply brake parts for 500,000 new Chevrolet Cruze cars per year. The Chevrolet Cruze will be built at Shanghai GM's Shenyang plant. Meanwhile, Mando will establish the second Shenyang plant to produce parts for steering and suspension systems within the next three years. Mando will utilize the completed plant as the base to expand business to Liaoning, Jilin and Heilongjiang Provinces in northeastern China. (From a press release on June 30, 2014)
<Poland>
-The Company Poland Sp. z o. o. (MCP) held a completion ceremony for its new plant. The Polish subsidiary has been supplying suspension systems to Hyundai Motor's Czech plant and Kia Motors' Slovak plant since September 2012. The new plant will produce brake calipers for Fiat, starting in August 2014 and also for Volkswagen, beginning in May 2015. The subsidiary's annual brake caliper capacity is expected to increase from the current level of 760,000 sets to 1.2 million sets by the end of 2014. (From a press release on May 23, 2014)