Nexteer Automotive Group Ltd. Business Report FY ended Dec. 2016
Financial Overview |
(in million USD) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | Rate of change (%) |
Factors | |
| Net Sales | 3,842.2 | 3,360.5 | 14.3 | 1) |
| Net Profit | 301.9 | 210.1 | 43.6 | 2) |
Factors
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2016 was USD 3,842.2 million, an increase of 14.3% over the previous year. All of the Company’s operating regions had increases in sales during the year. North America’s sales increased by 13.4%, primarily due to increased volume and program launches of driveline systems, EPS, columns and intermediate shafts. The Asia Pacific region had a 16.1% increase in sales, primarily due to increased exposure in the Chinese market. Finally, the Company’s Europe and South America segment had a 16.4% increase in sales due primarily to increased customer production volumes. Negative currency translation effects decreased sales globally by USD 54.4 million.
2) Net Profit
-In the fiscal year ended December 31, 2016, the Company’s net profit increased by 43.6% to USD 301.9 million. The increase in profit was primarily driven by increased market growth and stronger demand for EPS.
Recent Developments
Relocation of global headquarters
-The Company opened its new world headquarters in Auburn Hills, Michigan, U.S. The 52,000-square-foot headquarters houses 150 employees. (From a press release on August 25, 2016)
Contracts
-In 2016, the Company launched 33 major customer programs: 10 in North America, 21 in the Asia Pacific region, and two in Europe and South America combined. Of the 33 programs, 20 involved electric power steering systems, two involved steering columns and intermediate shafts, one was for hydraulic power steering systems and the remaining 10 programs were for driveline systems.
Column (Ford F250 /F350 Super Duty Truck)
Rack assist electric power steering "REPS" (Ford F150 Raptor)
Rack assist electric power steering "REPS", Driveline (GM Cadillac XT5, GMC Acadia)
Driveline (GM Chevrolet Cruze)
Hydraulic Steering Pump (GM Chevrolet Express, GMC Savana)
Rack assist electric power steering "REPS", Cloumn (FCA Chrysler Pacifica)
Column assist electric power steering "CEPS" (FCA Fiat Uno, Fiat Mobi)
Single pinion assist EPS "SPEPS" (PSA Citroen C3 (Europe))
Brush electric power steering "BEPS" (Chang'An CS15, CX70, Changan Oushang)
Brush electric power steering "BEPS" (BAIC Motor Huansu H3)
Column assist electric power steering "CEPS" (Chery Arrizo 7)
Column assist electric power steering "CEPS" (Dongfeng Liuzhou Fengxing SX6, S500, F600, Dongfeng SX6)
Column assist electric power steering "CEPS" (Opel Mokka, GM Chevrolet Trax, Buick Encore, Chevrolet Bolt)
Column assist electric power steering "CEPS" (Haitec Luxgen S3)
Driveline (Mahindra & Mahindra XUV500)
Driveline (Renault Nissan Nissan March)
Rack assist electric power steering "REPS", Driveline (SGM Cadillac XT5)
Brush electric power steering "BEPS" (SGMW Baojun 510 (SUV))
Driveline (Tata Indigo)
Driveline (FAW-VW Cross Golf)
Awards
-In March 2016, the Company’s Nexteer Suzhou plant received Ford Q1 status due to its continued high level of product quality and excellence, making it the first supplier to receive this award from Ford Asia Pacific in 2016.
-In May 2016, the Company’s plant in Porto Alegre, Brazil received the PSA Latin America Supplier Award for Logistics excellence.
-In June 2016, the Company’s plants in Mexico and Australia both received the GM Best Supplier Award.
-The Company’s plant in Suzhou, China received the GM Built In Quality System (BIQS) certification from GM China in September 2016.
-Other awards the Company received in 2016 are as follows:
- 2016 GM Performance Award to Nexteer India
- 2016 Dongfeng Liuzhou Advanced Supplier Award to Nexteer Liuzhou Team
- 2016 Maruti-Suzuki Quality Award System to Nexteer India
- 2016 SAIC GM Lean Production Award to Nexteer Suzhou
- Ford Annual World Excellence Award
R&D Expenditure |
(in million USD) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | |
| Overall | 232.8 | 205.9 | 182 |
| Expenditure as % of revenue | 6.1% | 6.1% | 6.1% |
R&D Facilities
| List of R&D Facilities |
| Number of Locations | Locations | |
| Systems Engineering Center | 1 | Saginaw, Michigan, U.S. |
| Application Engineering Centers | 5 | Saginaw, Michigan, U.S.; Paris, France; Lingyun, China; Beijing, China; Suzhou, China |
| Customer Service Centers | 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 held a ceremony for the opening of the second phase of the Suzhou Prototype Center on May 26, 2016. The Suzhou Prototype Center will assist in innovation for the Company’s manufacturing and assembly processes, as well as in its product development. The prototype center features assembly stations and equipment to replicate production processes and also includes 3-D printing equipment to enhance the facility’s engineering capabilities. The Company expects to manufacture more than 2,500 prototypes in 2016. (From a press release on May 26, 2016)
-The Company announced that it would open a technical center in Tychy, Poland in mid-2016. The Poland Technical Center will be responsible for design and development of new steering system solutions. The Company plans to hire more than 100 engineers in the upcoming year. The team located at the new center will engineer current and future EPS programs, and will support the development of advanced driver assist systems (ADAS) and autonomous technologies for OEMs, including BMW, FCA, Ford, GM and PSA Peugeot Citroen. (From a press release on April 13, 2016)
Product Development
Magnasteer with Torque Overlay system
-At the 2016 North American International Auto Show, the Company showcased its Magnasteer with Torque Overlay (MTO) system. The MTO system enables advanced driver assist functionality and features typically associated with electric power steering systems in passenger cars and light duty trucks to be used in heavy duty trucks. MTO is expected to launch with the 2016 GMC Sierra HD and the Chevrolet Silverado HD. (From a press release on January 12, 2016)
Patents
-As of December 31, 2016, the Company has 492 patents registered in the U.S. and 148 patents registered outside the country. Additionally, the Company has 459 patent applications pending.
Capital Expenditure |
(in million USD) |
| FY ended Dec. 31, 2016 | FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | |
| Overall | 284.7 | 277.5 | 279.1 |
Investments outside U.S.
-The Company announced that it opened a new manufacturing plant in Chongqing’s Jiangjin District. The facility will manufacture column assist electric power steering (CEPS), brush EPS, brushless EPS and intermediate shafts for Chinese and global customers. The facility, known as Chongqing Nexteer Steering System Co., Ltd., is co-funded by the Company and Chongqing Jianshe Industry. The 86,000-square-foot facility is expected to have a workforce of 700 employees by 2021. (From a press release on October 26, 2016)
-The Company announced that it has opened a new manufacturing plant in Pune, India, the Company’s third manufacturing plant in the country – joining plants in Bangalore and Gurgaon. The Pune plant is a wholly owned subsidiary of the Company, with 35,000 square feet of shop floor and the capability for a future expansion of an additional 35,000 square feet. The facility also provides 5,700 square feet of office space. The plant will mainly focus on halfshaft component manufacturing and assembly for local customers, as well as supplying the Gurgaon plant. In the future, the plant may also expand into Electric Power Steering (EPS) production. The Company anticipates that the new plant will create 120 jobs in Pune by the end of 2017. (From a press release on September 26, 2016)
-The Company announced the opening of its third manufacturing plant in Europe in Tychy, Poland. The overall investment, which also includes the opening of a technical center, will exceed over USD 16 million. The new plant will allow the company to expand its manufacturing capabilities of Electric Power Steering (EPS) systems for its European customers, including BMW, GM, FCA and PSA Peugeot Citroen. Currently, the Company’s plants in Poland produce about 1.5 million steering systems annually for models including the BMW i3, BMW 1 Series, BMW 2 Series Active Tourer, Mini Cooper, Alfa Romeo MiTo, Fiat 500, Opel Adam, Corsa and Insignia, Citroen C3 and DS3. Since 2010, the Company has invested over USD 80 million in its facilities in Poland. (From a press release on April 13, 2016)
-In late 2016, the Company began operations at its new plant in Porto Real, Brazil. The Porto Real plant is the Company’s second plant in the country, and will manufacture single pinion EPS systems.
-In 2016, the Company started construction of a new manufacturing site in Jakarta, Indonesia. The manufacturing facility will serve customers in the ASEAN region, focusing on Wuling as its primary customer. The Jakarta plant will manufacture brush-motor based CEPS starting in mid-2017.