Nexteer Automotive Group Ltd. Business Report up to FY ended Dec. 2014
Recent Years
Financial Overview |
(in million USD) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | Rate of change (%) |
Factors | |
| Net Sales | 2,978.1 | 2,386.8 | 24.8 | 1) |
| Net Profit | 163.3 | 110.9 | 47.2 | 2) |
Factors
1) Net Sales
-The Company's net sales in the fiscal year ended December 31, 2014 increased by 24.8% to USD 2,978.1 million. Sales increased due to increased customer demand in North America from the strengthening automotive market. Another factor contributing to the sales increase was the numerous program launches and ramp ups in late 2013 through 2014. These increases in sales were partially offset by the decreased automotive production in Brazil.
2) Net Profit
-In the fiscal year ended December 31, 2014, the Company's net profit was USD 163.3 million, an increase of 47.2% over the previous year. The increase in net profit was due to both increased revenue and various cost improvement initiatives. The gains partially offset by increased warranty provisions and the amortization of capitalized product development costs.
Joint Venture
-The Company, along with Chongqing Changfeng, broke ground on its new joint venture, Chongqing Nexteering Systems, Ltd., on March 10, 2014. Each partner contributed 50% of the capital needed for the joint venture, which totaled over CNY 300 million. Phase one of construction on the joint venture consists of an 8,000-square-meter facility and is expected to complete in October. Chongqing Nexteering Systems will produce column assist electric power steering systems for area manufacturers. (From a press release on March 12, 2014)
Restructuring
Future relocation of global headquarters
-The Company announced that it will establish its global headquarters in the greater Detroit area in Michigan, U.S. The Company expects to formally announce its plans for a move in 2016. The new headquarters will house approximately 150 individuals and will include a mix of current and new employees. Nexteer's Global Engineering Center and Saginaw Division will remain at the Saginaw site and will continue to operate as the global centers of technical innovation and manufacturing excellence, respectively. (From a press release on February 2, 2015)
Divestiture of hose production facility in Mexico
-The Company announced on June 28, 2013 that it had transferred the majority of its assets in its hydraulic hose production facility in Sabinas Hidalgo, Mexico, to Nobel Automotive. This transaction was done to allow the Company to focus on its core product line of electric power steering systems. The Sabinas Hidalgo production facility represented less than 1.5% of the Company's revenue. (From a press release on June 28, 2013)
Contracts
-On July 9, 2014, the Company announced that it would supply the Dongfeng Peugeot 2008 with its advanced electric power steering (EPS) system. The advanced EPS system uses advanced controller software to provide additional stability and comfort as well as improved fuel economy and efficiency. (From a press release on July 9, 2014)
-On January 14, 2014, the Company announced that it would supply the BMW i3 with its single-pinion, electric power steering (EPS) system. Due to its high-efficiency systems integration and its low demand for electrical power on standby, the Company's EPS system is ideal for use in electric vehicles. (From a press release on January 14, 2014)
-In 2012, the Company announced that it would supply the 2013 Chrysler Dodge Ram 1500 with its 12-volt electronic power steering (EPS) system. The system improves fuel economy and the vehicle's handling and steering as well. (From a press release on April 9, 2012)
Recent Developments
-On May 4, 2012, the Company announced that its halfshaft business grew by 13% in 2011 and has continued its growth in 2012 due to new business contracts and increased customer demand. In 2011, the Company's halfshaft business had USD 440 million in revenue. The Company had 21 halfshaft program launches globally in 2012, including launches for the 2013 Cadillac XTS and Chevrolet Malibu. (From a press release on May 4, 2012)
Outlook
-As the Company was recently awarded a significant EPS program with a global automaker operating in Brazil, the Company expects to establish a significant presence in the country by 2018.
R&D Expenditure |
(in million USD) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Overall | 80.1 | 73.3 | 81.6 |
R&D Facilities
| List of R&D Facilities |
| Number of Locations | Locations | |
| Systems Engineering Center | 1 | Saginaw, Michigan, U.S. |
| Application Engineering Center | 5 | Saginaw, Michigan, U.S.; Paris, France; Lingyun, China; Beijing, China; Suzhou, China |
| Vehicle Performance Center | 3 | Saginaw, Michigan, U.S.; Milford, Michigan, U.S.; Casa Grande, Arizona, U.S. |
| Customer Service Center | 11 | Dearborn, Michigan, U.S.; Troy, Michigan, U.S.; Porto Alegre, Brazil; Russelshelm, Germany; Munich, Germany; Torino, Italy; Tychy, Poland; Gliwice, Poland; Bangalore, India; Seoul, South Korea; Keysborough, Australia |
-The Company invested approximately USD 12 million in new test and validation facilities for electric power steering (EPS) systems in hybrid and electric vehicles. The investment will be used primarily for noise and vibration testing of EPS systems. (From a press release on November 19, 2012)
R&D Structure
-As of June 30, 2014, the Company has 972 employees worldwide working in research and development.
Patents
-As of December 31, 2014, the Company had 603 U.S. patents and 414 non-U.S. patents, along with 427 applications for additional patents.
Product Development
Magnasteer hydraulic power steering system and SmartFlow hydraulic pump
-On October 31, 2013, the Company announced two new products for heavy-duty light trucks: Magnasteer with Torque Overlay (MTO) system and Smart Flow hydraulic pump. The MTO system is comprised of a hydraulic power steering gear with an electromagnetic actuator and an electronic control module. It analyzes inputs from multiple vehicle systems to provide improve steering response and control. The Smart Flow pump improves operating efficiency by reducing parasitic loss on the engine. The Company has already obtained a customer for both products and expects to launch them both in 2015. (From a press release on October 31, 2013)
Electronic architecture for electric power steering systems
-In 2012, the Company developed a new electronic architecture for its electric power steering (EPS) systems. The new architecture provides manufacturers a single, customizable platform that can be used for all passenger vehicle types, from micro-cars to luxury SUVs. (From a press release on April 24, 2012)
Capital Expenditure |
(in million USD) |
| FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | FY ended Dec. 31, 2012 | |
| Overall | 172.5 | 184.5 | 172.4 |
Investment outside U.S.
-On June 14, 2014, the Company announced its plans to build an electric power steering system (EPS) plant in Tychy, Poland. Construction on the plant will begin in the second half of 2014 and is expected to complete at the end of 2015 or early 2016. The Company chose Tychy as the location of the new plant due to its location in the Katowice Special Economic Zone and the reputation of its products manufactured in Poland. The Company's Poland facilities in Tychy and Gliwice employ over 1,150 people and produce over 3 million steering systems per year. (From a press release on June 14, 2014)
-In October 2013, the Company opened a new manufacturing plant and engineering application center in Suzhou, China. The new manufacturing plant will produce modular power packs beginning in 2015, while the engineering center will provide analysis and testing, computer-aided design, and vibration and harshness testing capabilities for the region.
Investment in U.S.
-The Company announced a USD 70 million investment on December 14, 2012 for its world headquarters in Saginaw, Michigan, U.S. The investment was triggered by a new contract for the Company's 12-volt rack electric power steering system from a major North American automaker. The investment will be used throughout 2014 to upgrade and expand the Company's development, manufacturing, and test capabilities. 325 new jobs are expected to be added because of this investment. (From a press release on December 14, 2012)
-On February 7, 2012, the Company announced plans to open a new customer service center in Troy, Michigan, U.S. 50 engineers were hired for the new 30,000-square-foot service center, which will open in April 2012. The customer service center supports electric power steering (EPS) work with Detroit-based automakers. (From a press release on February 7, 2012)