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CHINA MARKET CHINA MARKET OVERVIEWOVERVIEW
Xingbin
LiChief Representative
AMT China
September 14, 2010
1
QUESTIONS?QUESTIONS?
1.1.
How much How much does the global financial crisis impact China’s economy?
2.2.
How much How much does the financial crisis impact our machine tool business in China?
3.3.
WhereWhere
are the business opportunities now and in the
future?
2
ChinaChina’’s Major Economic Indicatorss Major Economic Indicators
3
Cutting and Forming Machinery: Cutting and Forming Machinery: 2009 ($MM)2009 ($MM)
ConsumeConsume
ImportImport
World
$51,210
US
$3,369
$2,259
ChinaChina
$19,786$19,786
$5,897$5,897
Mexico
$1,005
$906
India
$1,156
$900
4
5
Machine Tool ConsumptionMachine Tool Consumption
$3,369
$19,786
Buyers of Imported Machine Tools in China ?Buyers of Imported Machine Tools in China ? (In Millions of Dollars)
OWNERSHIP IMPORTS PERCENTAGE, %
WOFE (Wholly Owned Foreign Enterprise) & JV (Joint Venture)
3,245.00 55.02
SOE (State Owned Enterprise) 1,923.40 32.60
Private 728.6 12.38
Total 5,897.00 100.00
6
DriversDriversStimulus Package 4 trillion RMB ($586 billion)
Ten Industries Revitalization PlanNew favorable policies, subsidies and encouragement of
technology innovation
New added bank loans/credits $1.41 trillion, up 95.7% (2009) $1.1 trillion (2010e) $0.72 trillion (2008)
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OpportunitiesOpportunities
Where are the business opportunities now and in the future?AutomotiveAircraft Railway Power Generation, especially renewable energy
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AUTOMOBILE AUTOMOBILE ––
Growth potentialGrowth potential
Demand:22 vehicles/1000 people in China vs. 499
vehicles/1000 people in Germany vs. 212 vehicles/1000 people in Russia130 vehicle manufacturers30,000 auto parts manufacturers70% of MT used in auto sector are CNC MT
Of which 80% are imported
Source: CAAM & CMTBA & DELOITTE 10
AUTOMOBILE AUTOMOBILE --
ProductionProduction
2009
13.79 million units
an increase of 48.348.3%%
No.1 in the world
Source: CAAM 11
12
Passenger Vehicle (Car, MPV Passenger Vehicle (Car, MPV and SUV)and SUV)--
Production 2009Production 2009
13
Passenger Vehicle Passenger Vehicle
(Car, MPV and SUV(Car, MPV and SUV)
Vehicle Production Jan. Vehicle Production Jan. ––
June, 2010:June, 2010: 8.9273 million units, up 8.9273 million units, up 48.84%48.84%
New Investments: New Investments: <1.6L engine cars<1.6L engine cars
$260 m280,000 mini buses & light-duty trucks by 2011Kaifeng
400 million Euro250,000 cars by 2010(1.4 L turbo charged engineAnd dual-clutch transmission)Changsha, a JV with Guangzhou
$367 million1 million →
2 million units of engines300,000 cars →
600,000 carsBy 2012Yuzui, Chongqing
$1.5 billion210,000 cars;500,000 enginesBy 2012 –
2015Sichuan
$588 m200,000 small & medium-sized cars By 2015Dalian
2009:<1.6 L passenger vehicle ,7.1955 million unitsUp 71%
14
New Investments New Investments ––
Auto & auto partsAuto & auto parts
SVW $340 million200,000 cars (NMS)By 2012Nanjing
$515 million200,000 light truck & vansBy 2010Zhuzhou
$200 million500,000 DCT modules (dual clutch transmission)By 2011Dalian
$300 million300,000 cars & SUVBy 2012Beijing
$440 million200,000 EVBy 2011Changsha
FAW VW $740 million200,000 cars (NCS)By 2010Chengdu
SGM-FAW$293 million200,000 light truck & vansBy 2010Yunnan & Harbin
$588 million200,000 400,000 carsBy 2012Nanjing
SGM-WULIN$308 million200,000 520,000 enginesBy 2012Liuzhou Engine Works (Phase 2)
$740 million240,000 700,000 carsBy 2012Guangzhou
DF Honda - $200 million200,000 610,000 CRV & CivicBy 2010Wuhan
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New InvestmentsNew Investments VW announced in 2009 that 4.4 billion Euro would be invested in Nanjing and
Chengdu plants for facility expansion and new vehicle model production.
VW announced in April 2010 that they are going to build 2 new factories in (Foshan, Guangdong) Southern China in the near future with the total investment of 1.6 billion Euro. Part of funds will be used to build engine and transmission plants.
VW: a new 300,000 units plant in Yizheng, Jiangsu province
Toyota
and Sichuang-FAW announced that they will restart the project in
Changchun –
Changchun
Feng
Yue
new factory. The total investment will be $560 million. The project will be completed in 2012. They are going to make 200,000 units of Corolla annually.
Nissan on
May 8 2010
announced that they are going to build its second factory in Huadu, Guangzhou with a total investment of $735 million. The targeted annual production will be 240,000 units of cars. The product will be completed in 2012.
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New InvestmentsNew Investments Chery: and its partners will invest $3 billion on the Erdos
project. The project will be completed before 2015. At phase 1 they are going to produce auto parts and later assemble vehicles with an expected output of 300,000 SUVs, pickup trucks, multi-
purpose vehicles annually.
Chery
R & D center: will be located in Wuhu with an investment of $1.5 billion. It
will be completed by 2012.
Hyundai:
announced in July that they are going to build a new transmission plant
in next two years in Rizhao
city, Shandong province. The total investment will be $290 million. The annual production will be 800,000 units of 4 and 5 speed transmissions.
Hyundai: also announced that their third factory will be built and completed by 2012. The capacity for this factory will be 300,000 units of sedans.
17
CIVIL AIRCRAFT CIVIL AIRCRAFT ––
Growth potentialGrowth potential
Demands from 2009 -
2028 (China)
874 regional jets: 45 jets/year
2,922 large aircrafts: 146 aircrafts/year
2700 helicopters: 135 helicopters/year
Demands for airports from 2009 –
2020
Will build 97 new ones by 2020 (to bring the total number of airports to 244)
Source: AVIC
19
CIVIL AIRCRAFT CIVIL AIRCRAFT --
PotentialPotential
Regional Aircrafts
Large jets
Aero engines
Subcontracting
Composite materials
20
CIVIL AIRCRAFTCIVIL AIRCRAFT
Regional Aircrafts (600-1200kms; <110 seats)
ARJ21:700 (90 seats) & 900 (105 seats)
:
First ARJ21-700 rolled out in 2007. First ARJ21 delivered in 2009. Capacity(2012): 50 jets per yearOrders received: 240 unitsTarget: sell 500 units in 20 years
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CIVIL AIRCRAFTCIVIL AIRCRAFT
Regional AircraftsARJ21 production sites:
SAMF- stabilizer section & final assembly
CAC- nose section and assembly
XAC -wing box & fuselage section
SAC – empennage section
22
CIVIL AIRCRAFTCIVIL AIRCRAFT
Regional Aircrafts
Bombardier & SAC project –
Q400 (Turboprop) and C series (Turbojet) program C series program was launched in 2006 As a risk sharing partner, SAC will produce the entire C’
Series (C110, C130) fuselage between the cockpit and empennage.
SAC gave Bombardier $500m a couple of years ago as commitment money, in turn BA gave $100m back for its investment in the China operation.
SAC will be manufacturing everything in Shenyang, stringers, skin, carbon panels, so stretch forming, machining, tape laying, autoclaves etc. etc.
The C’
Series rates are 10 per month by 2011 (phase I) and 17 per month by 2014 (phase II) while being asked to protect for 27 per month in 2019
(phase III).
23
CIVIL AIRCRAFTCIVIL AIRCRAFT
Large aircraft (C919):China’s large aircraft program (payload > 100 tons/w.150-200
seats)Commercial Aircraft Corporation of China, Ltd (COMAC)
based in Shanghai w. $ 2.7 billion investment First test flight: 2014Delivery: 2016Global sourcing: engine, airborne equipment and avionic deviceDomestic sourcing: structural parts
24
CIVIL AIRCRAFTCIVIL AIRCRAFT
Large aircraftsC919 production sites: as of June, 2009
ACAE – engine – LEAP-X1C designed by CFM
SAMF- stabilizer & final assembly
CAC- nose section
XAC -wing box & fuselage section
SAC – empennage section
Hongdu – aft fuselage section
HAIG
Shaanxi Aircraft
25
CIVIL AIRCRAFTCIVIL AIRCRAFT
Aero enginesMainly for military purposes so farDeveloping its own civil aircraft engines (LEAP-X1C for C919
designed by CFM and assembly in China)
Related manufacturers:
WS –
10A
26
Overview of Subcontracting Orders Signed between Chinese Overview of Subcontracting Orders Signed between Chinese and Foreign Aircraft Manufacturers in the Civilian Aircraft and Foreign Aircraft Manufacturers in the Civilian Aircraft IndustryIndustry
Company Subcontractor Location Value Components Signing date
Airbus XAC Xi'an $438 million Wing boxes for A319 May-05
Boeing CAC, Hafei, SAC Chengdu, Harbin, Shenyang
Rudder, Composite belly fairing panels and vertical fin for B787 dreamliner
Jun-05
Bombardier SAC Shenyang $40 million/year
$500 m
Fuselage sections for the Q400 turboprop C series
Jun-06
EADS (SOCATA) + Airbus CAC Chengdu $10 million Nose gear bay doors for
A380 Sep-06
Airbus AVIC I and II Tianjin $9 billion A320 Assembly May-07Spirit Aerosystems
+ Boeing SAC Shenyang $60 million Section 48 for the Boeing
737 NG Jun-07
Bombardier AVIC I Beijing $100 million ARJ21 -
900 Jun-07
Boeing XAC, CAC, Hafei
and BHA
Xi'an, Chengdu, Harbin and Tianjin
$500 million
In-board wing flaps, ailerons, spoilers, composite parts and vertical fin for the B747-8
Jun-07
Vought Aircraft Industries + Boeing CAC Chengdu $300 million Empennage sections for the
Boeing 747-8 Aug-07
Vought Aircraft Industries XAC Xi'an $200 million Vertical fin for B747 10/2009
27
CIVIL AIRCRAFTCIVIL AIRCRAFT
Composite materialsARJ21: 2% 20%C919: 20 –
40%
Boeing 787: 50%A350XWB: 52%F35: 45%Others
28
NEW INVESTMENTS NEW INVESTMENTS ––
Civil AircraftCivil Aircraft
XAC, SAC, CAC and others:
CNC riveting machines, stretch forming machines, fiber placement
machines, tape lamination machines, cutting tools, fixtures ……
Bombardier-SAC: Shenyang
$170 million –
Q400
$500 million –
C series
Airbus-Harbin JV: Harbin
$350 million
Composite material parts
Goodrich-XAC JV: Xi’an
Nacelles, landing gears
Safran-GE-AVIC JV (MOU): China
Landing gears, braking systems and nacelles
29
RAILWAYRAILWAY
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RAILWAYRAILWAY
Facts: By the end of 2009, China’s total operating length of railways
will reach 86,000 km, surpassing Russia and second only to the United States.
In 2008, investment increased by 88.6%
RAILWAY RAILWAY --
PotentialPotential
Opportunity:
By 2012, China aims to expand its operating railway network to 110,000 km from current 86,000 km, of which high-speed
rail will reach 13,000 km from 1,109 km in 2007.
The investment in railway industry for next three years: $100 billion every year on average
Predicted spending for purchasing locomotive & rolling stocks 2009: $13.7 billion 2010: $16.5 billion 2011: $20.2 billion 2012: $22.9 billion
New added investment: 22 cities subway projects have been approved (2010-
2016): $130 billion
32
33
RAILWAY RAILWAY --
ManufacturersManufacturers
Wholly owned subsidiaries (15)
Zhuzhou
Electric Locomotive works
Sifang
Locomotive & Rolling Stock Co., Ltd
BST
Zhuzhou
Rolling Stock Works
Ziyang
Locomotive Works
Luoyang Locomotive Works
Xiangfan
Deesel
Locomotive Works
Qishuyan
Locomotive&Rolling
Stock Works
Chengdu Locomotive&Rolling
Stock Works
Nanjing Puzhen
Stock Works
Meishan
Rolling Stock Works
Wuchang
Rolling Stock Works
Tongling
Rolling Stock Works
Shijiazhuang Rolling Stock Works
Wuhan Jiang'an
Rolling Stock Works
Guiyang Rolling Stock Works
Beijing Feb. 7th Rolling Stock Works
Majority share-holding subsidiaries(4)
South Huitong
Co., Ltd
Zhuzhou
Electric Locomotive Research Institue
Qishuyan
Locomotive & Rolling Stock Technology Research
Institute
Beijing Railway Industry Trade Company
Minority share-holding subsidiaries (3)
Dalian Locomotive Research Institute
Sifang
Rolling Stock Research Institute
Loric
Import & Export Corp.,Ltd.
Wholly owned subsidiaries
Majority share-holding subsidiaries
Minority share-holding subsidiariesCSR Groupwww.srgc.com.cn
34
RAILWAY RAILWAY --
ManufacturersManufacturers
Wholly owned subsidiaries (17)Changchun Railway Vehicles Co., Ltd
Tangshan Railway Vehicles Co., LtdQiqihar Railway Rolling Stock (Group) Co.,Ltd
Mudanjiang Locomotive & Rolling Stock Works
Changchun Locomotive Works
Changchun Car CompanyShenyang Locomotive & Rolling Stock Industry Corp.Shenyang Railway Brake FactoryTianjin Locomotive & Rolling Stock Machinery WorksBeijing February 7th
Locomotive WorksBeijing Nankou
Locomotive & Rolling Stock Machinery WorksTaiyuan Locomotive & Rolling Stock WorksDatong Locomotive Society management CenterYongyi
Electric Machine FactoryJi’nan
Locomotive & Rolling Stock WorksXi’an Rolling Stock Works
Lanzhou Locomotive WorksElectri
Traction Technology Research and Development Center
Majority share-holding subsidiaries (8)Harbin Railway Rolling Stock Co.,Ltd.
Changchun Railway Vehicle Co.,Ltd.
Shenyang Locomotive & Rolling Stock Co., Ltd
Dalian Locomotive & Rolling Stock Co., Ltd
Datong Electric Locomotie
Co.,Ltd.
Dalian Locomotive Research Institute
Sifang
Rolling Stock Research Institute
Logistic Corp,. Ltd.
Minority share-holding subsidiaries (4)Loric
Import & Export Co., LtdBeijing Railway Industry Trade CompanyHuzhou
Electric Locomotive Research InstituteQixhuyan
Locomotive & Rolling Stock Technology Research Institute
CNR Groupwww.cnrgc.com
Wholly owned subsidiaries
Majority share-holding subsidiaries
Minority share-holding subsidiaries
POWER GENERATIONPOWER GENERATION
35
GrowthGrowth
-- PotentialPotential
Now -
2020: China needs to add 45GW of new capacity annually to
maintain its economic growth Renewable energy investments (excluding fossil energy) :
$750 b Reduce thermal power capacity:76%
65%
Renewable energy : 15% Clean energy: 50% Nuclear power units: 1140Wind power: 9%
36
CHINACHINA’’S INSTALLED CAPACITYS INSTALLED CAPACITY
Capacity:Total:
No.2 in the worldThermal:
No.1 in the worldHydro:
No.1 in the world
37
Nuclear Power Nuclear Power -- PotentialPotential
Demands:
11 reactors in commercial operations (6 nuclear power plants) From 9.1GW (<1%) now to 70 –
80 GW in 2020, 5% of nation’s total power capacity
24 reactors under construction
31 nuclear power plants by 2020
Estimated investments: By 2020
Total investment: $148 b
Of which equipment investment would be $81.4 b (55%)
Of which machine tool investment would be $59.2 b (40%)
Nuclear power equipment makers
DEC (55%)
SEC (45%)
HEC (5%)
38
WIND POWERWIND POWER
39
40
INSTALLED CAPACITY & INSTALLED CAPACITY & GROWTH POTENTIALGROWTH POTENTIAL
China has set a target to increase the use of non-fossil energy to 15% of primary energy consumption in 2020
With the conservative estimate by GWEC, the growth rate in wind
power in China would be over 20 –
30 % every year on average from 2010 to 2020.41
WIND POWER MANUFACTURERS WIND POWER MANUFACTURERS IN CHINAIN CHINA
Wind power manufacturers: >80 companies (6 companies before 2004)
Blade manufacturers: >50 companies
42
TOP SIX WIND TURBINE TOP SIX WIND TURBINE MANUFACTURERS IN CHINAMANUFACTURERS IN CHINA
% of total capacityGoldwind
21.63%
Sinovel
17.75%DEC
10.61%
Gamesa
12.77%Vestas
11.97%
GE
5.25%Total:
79.98%79.98%
43
44
WIND TURBINE MAKERS WIND TURBINE MAKERS -- LocationsLocations
Gamesa
Tianjin
Vestas
Tianjin
GE Shenyang
Baoding Huiteng
Wind Power
Sinovel/Dalian Heavy Duty
Luoyang Yituo
Meide
Nanjing Highspeed
& Precision Gear Group
Acciona
Nantong
Shanghai Shenxin
Wind Power
Zhejiang Windey
Zhejiang Huayi
Electric
Dongfang
Electric
Xinjiang Golden Wind
AMT –
Guangzhou Liaison Office
Bill ChanRegional ManagerPhone: (86-20) [email protected] (Cell)
Shanghai Technology & Service Center
Harry XiaoGeneral ManagerPhone: (86-21) [email protected] (Cell)
AMT -
Shanghai Liaison Office
Sean JiangBusiness Development ManagerPhone: (86-21) 6279-7640
Ext. 6219
[email protected]([email protected])011-86-13801803680 (Cell)
Xingbin
LiChief RepresentativePhone: (86-10) 6410-7374,
(86-10) [email protected]
([email protected])011-86-13901179646 (Cell)
AMT -
Beijing Representative Office
AMT China StaffAMT China Staff
THANK YOU!THANK YOU!
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