automotive division tryggve sthen president, automotive division
TRANSCRIPT
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Automotive Division
Tryggve Sthen
President, Automotive Division
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• Automotive Division update– Key financials– Division overview
• Cost reductions
• Growth in Asia
Presentation outline
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1Automotive Division update
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Automotive Division overview
Cars Trucks Two wheelers Vehicle service market
Home appliances
& Power tools
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2000
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2010
Q1
A good AD journey for many years…
18.6
Excl. One-time costs
Sales development
Record operating margin
0%
1%
2%
3%
4%
5%
6%
7%
8%SEKb
6.0%
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2000
2004
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2008
2009
2010
Q1
The great secession in 2008-2009 followed by a strong recovery
4.4
Excl. One-time costs
Sales development
Record operating margin
0%
1%
2%
3%
4%
5%
6%
7%
8%SEKb
7.2%
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2Cost reductions
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Reducing costs – lower cost & better cash
•Cost cutting
•Down sizing
•Managing cash
Lower cost
&better cash
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Capacity flexibility- Lay-offs and early retirements Q4 2008 and H1 2009
Europe• Lutsk• Fontenay• Varese• St Cyr• Leverkusen
Asia • Pune
Americas• Glasgow closure• Elgin• Salt Lake City• Tortuguitas• Cajamar
• In total about 2,000 people
• All sites affected, mainly:
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Capacity flexibility
2009: At peak about 9,000 people in short-time work
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Reducing costs - restructuring
•Cost cutting
•Down sizing
•Managing cash
•Plant restructuring in Europe & North America
•Shift of production
Restructuring
Lower cost
&better cash
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Factory closures/restructuring over the last few years
North America
• Aiken
• Springfield
• Franklin
• Glasgow
• Elgin
• Seneca
Europe• Fontenay, France • Schweinfurt, Germany
• Leverkusen, Germany
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Shift in manufacturing footprint
Latin America growth• Mexico
– Seals– Bearings
• Brazil
Asia expansion• China new HBU
plant• Korea 2 new
plants• Indonesia new
plant • India new plant
Manufacturing increasefrom 30% in 2008 to 45% in 2010
East Europe growth• Ukraine capacity• Bulgaria capacity
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Reducing costs
•Benchmarking
•Six Sigma
•Manufacturing Excellence
•Cost cutting
•Down sizing
•Managing cash
•Plant restructuring in Europe & North America
•Shift of production
Internal improveme
nts
Restructuring
Lower cost
&better cash
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3Growth
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Growth strategy in Asia
•Grow with winning customers
Value for customer
s
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Bearings and seals to Fuwa trailer axles
• Guangdong Fuwa Engineering Manufacturing Co. Ltd. is the largest trailer axle manufacturer in the world
• Several bearing and seal contracts
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Bearings to Yuchai engine
• Yuchai is the largest diesel engine manufacturer in China
• Recently secured important bearing contract
Yuchai engineHub bearing unit 1 Fan unit
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Haridwar factory inaugurated 7 April
• Haridwar factory to supply ball bearings to Hero Honda and other automotive customers
in the region as well as to the aftermarket
• Contract with Hero Honda for 5 years production:
> 100 million bearings
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Growth strategy in Asia
•Product introduction targeting Asia demand
Broad product offering
Value for customer
s
Grow with winning customers
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Asia targeting product launches in the last 6 months
• 12 new products launched globally
• 4 specifically targeting the Asia market
SKF One Way Clutch
Hub Bearing Unit 1
for compact cars
SKF Rocker Arm Bearing &
SKF Rocker Arm Bearing Unit
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Growth strategy in Asia
Product introduction targeting Asia demand
Aftermarket
penetration
Broad product offering
Value for Customer
s
Grow with winning customers
•Product range expansion
•Dealer network expansion
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Aftermarket business in China
Product Range • New product lines added
• New kits added to existing product lines
Dealer network
2007 12 Distributor/Dealers
2008 + 82009 + 62009 = 26 (end of year)
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The way ahead
Growth
Value for
customer
Broad green offerin
g
After-market
Emerging
marketsDown-sizing
Restruct-uring
Internal improve-
ments
Cost reductions
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