Valeo Group (China) Business Report FY ended Dec. 2013

Business Highlights

Business Overview for recent years

-Valeo announced its business results for the third quarter of 2013. Sales to automakers amounted to EUR 319 million, a gain of 24 percent year-on-year; compared with the average sales of other suppliers, sales were 16 percentage points higher. Sales to the OEM market during the first three quarters of 2013 totaled EUR 912 million in China, a 23 percent increase from the same period in 2012; they were 12 percentage points higher than the average results of other suppliers. (From a press release on November 6, 2013)

-The Valeo Group said that its sales in the China market during the first half of 2013 totaled 590 million euros, an increase of 22 percent from the same period in 2012. The number of program awards won in China accounted for 29 percent of the overall programs the Group has won. Sales generated through business with Chinese automakers climbed 11 percent year-over-year. The Group’s total operating profit was 6.17 billion euros, a 5.8 percent gain from the same term last year. Sales to OEMs reached 5.25 billion euros, a rise of 2.6 percent year-on-year. The company is expecting that its operating profit in China will double from the level in 2011 by 2015. (From news releases issued by multiple sources on August 21, 2013)

-On February 22, 2013, Valeo's CEO Jacques Aschenbroich said that the company will continue to increase investment inChina, looking to double its sales in the fast growing market by 2015. Of all new contracts the company won during 2012, those for the Chinese market accounted for 18 percent. Valeo is currently constructing 4 new plants in the country in addition to its 22 plants already in operation with approximately 12,000 employees. The total headcount is expected to reach 14,500 by 2014, which is even larger than that in Valeo's home base of France. During 2012, the Group's global sales reached 11.8 billion euros, up 8.2 percent from the previous year's result, thanks to greater sales in Asia and North America. Operating profit climbed 3 percent year-on-year to 725 million euros. New orders received during 2012 were worth 15.8 billion euros, which was a record high figure. (From a press release, February 23, 2013)

Business Overview of subsidiary

-Shanghai Valeo Automotive Electrical Systems Co., Ltd., a subsidiary of Valeo has produced over 10 million alternators during 2013, breaking its previous record of 9 million that was set in 2012. (From news releases issued by multiple sources on December 16, 2013)

-Valeo Wenling Automotive Systems Co. Ltd. announced that it has already won wiper programs worth 870 million yuan since January 2013. Sales have been growing steadily at the company; they reached 460 million yuan in 2010, 600 million yuan in 2011, and 740 million yuan in 2012. The company, which has approximately 1,000 employees, is placing much focus on development of new technology and products. In conventional wiper systems, washer fluid is injected from the bottom of the windshield. The company’s engineers are developing a new technology to locate the injector to the blade rubber parts of the wiper unit. The company is active in establishing industry-academia partnerships. It is collaborating with local technical facilities and institutions in other areas such as Hangzhou and Guangxi. (From a press release, Wednesday, March 13, 2013)


R&D activities
-The Valeo Engineering Hardware China in Shenzhen, which employs about 100 engineers and plans to recruit an additional 200 by end-2015, has reinforced the Group’s position in China. Valeo's continuous investment of over 5% of its annual sales in Research and Development has enabled the Company to bring to market the innovations that will support the Group's development in China in the coming years.

R&D facilities

Name of facility Operating segment City  Overview
Shanghai Technical Centre Valeo Climate Control Systems China Technical Center Climate Control Shanghai - Providing technical support to its Chinese manufacturers, to which it supplies its products based on an OEM agreement.
- Providing technical support in Asia and emerging markets.
Valeo Engine Cooling Systems China Technical Center Engine Cooling
Valeo Wipers Systems Asia Technical Center Wipers Systems
Valeo Lighting Systems China Technical Center Lighting Systems Wuhan, Hubei - Developing lighting system for the Chinese and the global markets
Valeo Shenzhen Electrical Technical Centre Interior Control Shenzhen, Guangdong - Research and development of interior control products

Investment Activities

Investment in China
-On November 5, 2013, Valeo S.A. held an inauguration ceremony for its new production subsidiary, Wuxi Valeo Automotive Components Systems Co., Ltd. The new Wuxi facility will develop, produce and sell engine components and related products such as actuators, sensors, and engine controllers. (From a press release on November 6, 2013)

-Valeo S.A. has inaugurated the Valeo Nanjing expansion plant in Yangtze Delta Region, Nanjing, China. On top of current activity for clutches and torque converters, the Nanjing plant will also be the first site in the world for Valeo to produce double-clutch transmission systems. In 2012, three new plants were opened (Guangzhou, Wuhu and Huadu). In 2013, two other plants are being extended (Foshan and Wuhan) and four other new ones are under construction. (From a press release on July 5, 2013)

-Valeo S.A. announced on April 25, 2013 that the company held a groundbreaking ceremony for the new lighting system production plant in Foshan, China. The new plant covers 23,000 square kilometers, and has been renovated based on its former plant. To avoid the possibility of staining the products, the spill-resistant glass walls have been introduced in the plant. The injection molding and coating processing, the European operation style is adopted to improve efficiency. The automated ratio for the parts assembly has been raised to more than 60% to ensure the quality of the products. The production volume is expected to reach 570,000 units by 2015. Valeo aims to double its sales in China and also increase the number of employees from 12,000 to 15,000. With the establishment of the new plant in Foshan and its 10 th development center, the company plans to enhance its competitiveness in South China. (from the press release on April 25, 2013)