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3rd Annual Conference on China Auto Aftermarket Strategies
Combining OES and IAM to achieve the largest aftermarket share
Shanghai, May 21st, 2008 Thomas Hiebaum
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
23rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Combining OES and IAM to achieve the largest aftermarket shareAgenda
� Market overview
� Combining IAM and OES
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
33rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Combining OES and IAM to achieve the largest aftermarket shareMainland China
Key Indicators:
Increasing car parc
*
Substantial, continuous growth
*
Increasing quality requirements
*
Increasing brand awareness
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
43rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Long-term prospects very positive due to:
� increase of private consumption(i.e. 1996: 27% - 2003: 65%)
� massive OEM investments (i.e. $13bn to triple capacity to 6Mio units until 2010)
� Increase of local content (e. g. VW local content targets)
China vehicle sales market [Mio. vehicle units]
WTO entry resulted in looser tax regulations…
… prices consequently dropped, additionally fuelled by new market entrants, surging demand
Government reacted on economic overheating via new regulationsclamping down on loans and raising license fees
Saturation in Tier 1 areas as well as overloaded infrastructurecontributed to weakened demand growth
1.5 1.6 1.9 2.13.0
4.1 4.6 4.9 5.4 5.9 6.4 6.8 7.0
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
CAGR8%
CAGR12%
CAGR
39%
Combining OES and IAM to achieve the largest aftermarket shareVehicle market overview
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
53rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Car market development with 2.7 % CAGR [Mio. vehicle units]
4,5%
2,7%
5,7%
1,0%
2,3%
1,1%
1,6%
CAGR (05-10)CAGR (07-06)
64,167,2
70,773,9
76,6 79,8
2527,9
30,633,2
35,838,6
� Total market is expected to grow with a CAGR of 2,7 %� Asia is the key growth region, Western Europe &
NAFTA stagnating
Total market
� China and India are the key growth drivers with an expected CAGR of more than 10%, China being the key contributor to overall growth
3%
2%
8%
3%
7%
11%
12%
Global Production Asian Production
25 27,9 30,6 33,2 35,8 38,6
33,5
3,94,1
44
1616,1
16,316,5
16,616,7
2,52,7
2,72,8
2,82,9
16,717
17,217,3
17,417,6
0,91
11
1
2005 2006 2007 2008 2009 2010
Other
W. Europe
SouthAmerica
NAFTA
E. Europe
Asia
1,6 1,6 1,7 1,7 1,8 1,9
0,8 0,9 1 1,1 1,2 1,21,1 1,21,3 1,3 1,4 1,5
1,3 1,75,7
7,38,3
9,611
12,6
13,913,412,912,211,410,8
4,44,44,34,13,83,7
3,02,62,32,0
2005 2006 2007 2008 2009 2010
China
India
Thailand
SouthKorea
Iran
Japan
Other
Combining OES and IAM to achieve the largest aftermarket shareVehicle market overview
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
63rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Combining OES and IAM to achieve the largest aftermarket shareAgenda
� Market overview
� Combining IAM and OES
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
73rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Professional car service
Professional vehicle repair
Vehicle upgrading
Low cost
Brand consciousness
Increasing quality requirements
Mix of
OES
and
Independent garages
necessary for
Chinese Consumers
Combining OES and IAM to achieve the largest aftermarket shareConsumer demand
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
83rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
160 Mio passenger vehicles by 201553 Bn € market volume
Component Manufacturer
80 %
OEM
20 %
General WD‘s36 %
OES
64 %
Independent Workshops
45 %
OESWorkshops
55 %
45% 55% 100%
25% 75% 30% 70%
Manufacturer Level
Wholesaler Level
Workshop Level
Consumer Level
Accessory Chains16 %
Specialised WD‘s84 %
Specialised Accessory & Wholesaler Level
90% 10% 90% 10%
Combining OES and IAM to achieve the largest aftermarket shareMarket segmentation
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
93rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
YearPV Components
Total Mio €Spare and Wear
Parts Mio €Accessory Parts
Mio €2004 3,924 2,511 4712005 5,232 3,348 6282006 6,867 4,395 8242007 8,790 5,625 1,0552008 11,251 7,201 1,3502009 14,176 9,073 1,7012010 17,720 11,341 2,1262011 22,150 14,176 2,6582012 27,688 17,720 3,3232013 34,610 22,150 4,1532014 43,262 27,688 5,1912015 52,780 33,779 6,334
Combining OES and IAM to achieve the largest aftermarket shareMarket volume estimation for PV components
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
103rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Automotive aftermarket
0
20
40
60
80
100
120
140
2002 2007
Bio RMB
Combining OES and IAM to achieve the largest aftermarket shareMarket growth (2002 – 2007)
+ 70%
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
113rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Hella Sales- and Distribution-Network for IAM and OES
Standard components
Accessories Upgrades
Technical support
Sales Service
DiagnosisSpare parts
Automotive Aftermarket
Combining OES and IAM to achieve the largest aftermarket shareHella‘s approach towards combining OES and IAM in China
Hella local D&D and production, Hella imports
Hella Trading (Shanghai) Co., Ltd.Confidential. The contents may only be passed on, used or made known with our express permission. All rights reserved.
123rd Annual Conference on China Automotive Aftermarket Strategies, 05/21/2008
Automotive suppliers can only participate in the growingpotential in China if we develop the Chinese Independent Aftermarket and become a strong partner for OES at the same time.
Combining OES and IAM to achieve the largest aftermarket shareConclusion
