EIFI AUTOMOTIVE GROUP Frankfurt - October 5th 2017 EIFI LEGAL - - PowerPoint PPT Presentation

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EIFI AUTOMOTIVE GROUP Frankfurt - October 5th 2017 EIFI LEGAL - - PowerPoint PPT Presentation

EIFI AUTOMOTIVE GROUP Frankfurt - October 5th 2017 EIFI LEGAL COMMISSION Compliance with the AT Laws EIFI AUTOMOTIVE GROUP PURPOSE IS TO SUPPORT ITS MEMBERS WHO SHALL BE DRIVEN BY COMPETITIVE ASPIRATIONS AND TO PROMOTE PROFESSION


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EIFI AUTOMOTIVE GROUP

Frankfurt - October 5th 2017

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EIFI LEGAL COMMISSION

  • EIFI AUTOMOTIVE GROUP PURPOSE IS TO SUPPORT ITS

MEMBERS WHO SHALL BE DRIVEN BY COMPETITIVE ASPIRATIONS AND TO PROMOTE PROFESSION INTERESTS SOLELY THROUGH LEGITIMATE MEANS ;

  • EIFI AUTOMOTIVE GROUP ACTIVITIES AND ITS MEMBERS

PARTICIPATION SHALL BE CONDUCTED AT ALL TIMES IN COMPLIANCE WITH APPLICABLE LAW ;

  • EIFI AUTOMOTIVE GROUP SHALL NOT BE A FORUM/PLACE FOR

ANTI-COMPETITIVE PRACTICES

Compliance with the AT Laws

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AGENDA

  • Market Outlook
  • Legal Group
  • External speech
  • Conclusions
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CONCLUSIONS LAST MEETING

  • Positive economic climate and improved forecasts

but volatility risks

  • Protectionisms challenging world trade volumes
  • Record volumes in the automotive sector but

potential slowdown in NA and China

  • Chinese fastener export to Europe
  • Commodities and utilities price increase
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MACROECONOMIC OUTLOOK

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Macroeconomic Outlook

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Global GDP trend is improving

Avg. Growth 3%

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Macroeconomic Outlook

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Global GDP trend is improving

2016 2017 Sept June Sept 2,4 % 3,0 % 3,3%

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Macroeconomic Outlook

Business climate at highest level

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AUTOMOTIVE MARKET OUTLOOK

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Automotive Market Outlook

Global light vehicle sales – YTD August 2017

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Automotive Market Outlook

Europe light vehicle sales – YTD August 2017

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Automotive Market Outlook

Europe light vehicle sales – YTD August 2017

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Automotive Market Outlook

European truck sales trend – H1

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  • Mexico, Japan and Brasil are supporting the growth in 2017
  • NA with the major negative contribution

Automotive Market Outlook

Global vehicle production 2017

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Automotive Market Outlook

Europe share in global vehicle sales 2017

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Automotive Market Outlook

Global light vehicle sales forecast

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Automotive Market Outlook

European light vehicle sales forecast

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Automotive Market Outlook

NA market: a pessimistic view

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Automotive Market Outlook

Global vehicle production forecast

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Automotive Market Outlook

Global vehicle production: the convergence

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Automotive Market Outlook

OEM performances – Highest levels since 10 years

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Automotive Market Outlook

Performances: OEM vs Suppliers

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Automotive Market Outlook

OEM performances – Efficiency improvement

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Automotive Market Outlook

OEM performances – High investment level

  • Price pressure increase on suppliers in different ways
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Powertrain Evolution

Automotive Market Outlook

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Automotive Market Outlook

European diesel market share trend

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Automotive Market Outlook

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Automotive Market Outlook

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Automotive Market Outlook

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FASTENER MARKET OUTLOOK

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Fastener Market Outlook

  • Raw material
  • Antidumping action/MES
  • Main market events
  • EIFI survey 2017
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Fastener Market Outlook

Source: The Steel Index & Securecalc

+110 Eur/ton

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Fastener Market Outlook

Coking coal

+220 Eur/ton

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Fastener Market Outlook

Source: The Steel Index

+48 Eur/ton

Iron ore

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Fastener Market Outlook

Basic Oxigen Furnace Steel – Formula price

Price = (Carbon Coke x 0,6) + (Iron Ore x 1,5) + (Scrap x 0,1)

  • Price reduction expected on Q3/17 but did’nt happen

USD EUR

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Fastener Market Outlook

DSV Index

+95 E/ton

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  • 6
  • 22
  • 70
  • 75
  • 100
  • 50

50 100 150 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17

Wire Rod (Price Change Index - basis Oct 2010) Eur/ton

Fastener Market Outlook

DSV Index

+90 Eur/ton

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Fastener Market Outlook

Electrodes issue

  • Recent production reduction of graphite (-30%) due to pollution in

China are causing shortages of material in the market

  • Consequent high price increase of graphite from 2.000 USD/t to

38.000 USD/t (spot market)

  • Impact both in EAF production (melting and refining) and in BOF

production (refining): more or less 5 €/ton with price 2.000 USD/t, now more than 40 USD/t.

  • Electrodes issues is expected to affect both the steel supply

continuity and market prices

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Fastener Market Outlook

Electrodes issue

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Fastener Market Outlook

What next?

  • Q4/17: increase on spot market and quarterly based

negotiations

  • 2018: further increases expected based on high market

demand and commodities/utilities price change

  • Strong impacts on P&L fastener manufacturers
  • Develop and promote with the EIFI support an automatic

index mechanism

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Fastener Market Outlook

AD525

26 February 2016: withdrawal by the EC after WTO sentence

  • 2008: 650Ktons imported from China before the AD
  • Chinese fastener production 2016:

75 bn RMB (10 bn Euro) - 7,5 mio tons – 10.000 companies

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Fastener Market Outlook

Market Economy Status

EC just approved the final proposal this week

  • The proposal will be voted by the European Parlament

within 2017

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Fasteners Market – Main Events

Würth B2B online procurement platform goes live in Germany (Apr. 17)

  • Wucato is an e-procurement solution and online procurement platform for the B2B sector. It

enables customers to access a Group-wide product range consisting of more than 500,000 products from suppliers within the Würth Group, as well as third party suppliers. Wucato will serve as a pioneering sales channel, enabling the Würth Group to respond to the more complicated demands of its customers and react to new market conditions.

Nedschroef acquires CP Tech to broaden high-end engineering know-how (Aug. 17)

  • With the acquisition, Nedschroef intends to further develop from a specialist manufacturer of

fasteners to a high-end engineering company capable of engaging in the development of early-stage automotive projects working jointly with OEMs.

  • CP Tech, established in 2006 and located in Büren, Germany, employs 175 experts in advanced

engineering offering complete solutions to many of the world’s most prestigious car manufacturers.

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Fasteners Market – Main Events

A.Raymond –Adds largest production site (Aug. 17)

  • The new German production site is based in Weil am Rhein close to the

German-Swiss-French border. Five years in the making, the new production building cover 43,000m2 and includes the entire manufacturing chain for metallic.

A.Raymond to invest $17.3 million, create 71 jobs in Rochester Hills (June 17)

  • A.Raymond Corp., a subsidiary of France-based A.Raymond Network, is planning to construct a new

North American headquarters in Rochester Hills.

  • The company develops, manufactures and markets fastening and assembly solutions according to a

release from the Michigan Economic Development Corp., with plans to house corporate offices on the new site as well as establish a new advanced engineering lab.

  • The $17.3 million investment will see a $600,000 performance-based grant from the Michigan

Business Development Program. Rochester Hills won out over a competing site in Ohio for the

  • development. The new headquarters is expected to create 71 new jobs over the next five years.
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Fasteners Market – Main Events

LISI Automotive acquires TERMAX LLC in the US (Sept. 17)

  • Lisi to acquire 51% of the share capital of TERMAX LLC, a leading

manufacturing and engineering company specializing in metal and plastic fastening systems for automotive interiors

Bulten invests in Poland (Sept. 17)

  • Bulten AB has invested around PLN 80.5 million (approximately SEK 177 million) in a new

strategically important production and logistics plant in Poland to meet future volumes.

  • The set-up, which is conditional upon obtaining the required permits, will start in 2017 and

production is expected to start in the first half of 2019.

  • The additional plant will be built in Radziechowy-Wieprz, in the “Katowice Special Economic

Zone”, about 30 km from the existing production plant in Bielsko-Biala.

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Fastener Market Outlook

<0% 0% >0% <10% 91% > 10% 9% 4 Turnover evolution 2017 VS 2016 Increase 38% Stable 56% Decrease 6% 5 Profitability (EBIT) expectation 2017 VS 2016 Increase 58% Stable 36% Decrease 6% 6 CAPEX 2017 VS 2016

Survey 2017

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High 32% Medium 62% Low 6% High 21% Medium 74% Low 6% High 62% Medium 35% Low 3% High 18% Medium 44% Low 38% High 15% Medium 65% Low 21% 5 Industry 4.0 2 Emerging market investors/suppliers 3 OEM/OES ambitious price reductions plans 4 Powertrain electrification Automotive suppliers challenges Result 1 Global localization process

Survey 2017

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High 38% Medium 53% Low 9% High 32% Medium 65% Low 3% High 65% Medium 32% Low 3% High 62% Medium 38% Low 0% High 15% Medium 56% Low 29% 5 Monitor possible market downturn 2 Manage the asian challenge (competitors) 3 Increase/maintain flexibility on the entire supply chain 4 Counterbalance OEM price pressure Automotive suppliers priorities Result 1 Follow the OEMS globalization process

Survey 2017

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Fastener Market Outlook

7,5 6,9

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  • Macroeconomic situation has improved
  • High confidence level but some uncertainties
  • Strong automotive market in Europe in 2017
  • Forecast 2018 more conservative with some clouds in NA
  • Stronger price pressure from OEMS
  • Commodities and utilities warming up
  • Powertrain mix change ongoing

Conclusions

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Bad Practices EIFI Legal Document Update

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EIFI LEGAL COMMISSION

  • AUTO EIFI LEGAL COMMISSION’S PURPOSE IS TO SUPPORT ITS

MEMBERS WHO SHALL BE DRIVEN BY COMPETITIVE ASPIRATIONS AND TO PROMOTE PROFESSION INTERESTS SOLELY THROUGH LEGITIMATE MEANS ;

  • AUTO EIFI LEGAL COMMISSION’S ACTIVITIES AND ITS MEMBERS

PARTICIPATION SHALL BE CONDUCTED AT ALL TIMES IN COMPLIANCE WITH APPLICABLE LAW ;

  • AUTO

EIFI LEGAL COMMISSION’S SHALL NOT BE A FORUM/PLACE FOR ANTI-COMPETITIVE PRACTICES

Basic Principles

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Legal Group

EIFI Legal Document

  • The document was developed in 2013 and 2014 trough

several meetings of the legal group

  • Officially approved by the Board and circulated in 2015
  • Why the document?
  • Because, with or without a signed contract, members, suppliers of

fasteners, suffer from the imposition of unfair contract terms and failed to obtain fair contract terms

  • Automotive fastenings suppliers have some specificities and EIFI

has decided to highlight some “bad practices” in conflict with such specifities

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Legal Group

New bad practices

  • Web Reverse Auctions: wich rules of the game?
  • Business Link approach: sustainable trend?
  • Raw material burden
  • New Quality Contracts
  • New Logistic Contracts/ Debit notes mechanism
  • Asimmetric conditions: latest GTC evolution
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Legal Group

New bad practices

  • How to share the different results of national WG?
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Conclusions

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Bad Practices Examples

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Legal Group

Reverse auctions

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Legal Group

Reverse auctions

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  • The only thing, really observed on PSA bad practices, is on

extra costs invoiced on claims inside Amadeus portal.

  • Some plants practiced more or less payment impact without

really additional information

QAN FVZ 2016 2192 COFOR 63629L 12 Référence Pr 9812320980 Total validé 1868 Libellé AGRATI GIE Libellé ProduVIS AXE EPAUL 13 L7,5 M10X150 L25 FP Demande numéro 1 Total validé : 1 868 € Libellé du Type Nbre HeuresQte. Prix Unitaire Coef CKD Frais divers Total émis Commentaire emission Centre Animde coût

  • u Nb. veh.

V0Q15 Initialisation traitement de l'incident 3 0 € 1.0 0 € 208 € COSTES V0Q15 Analyse-Recherche

  • ccurence-Localisation

2 0 € 1.0 0 € 138 € COSTES V0Q15 Réactivité - Tri par personnel PSA 2 0 € 1.0 0 € 138 € COSTES V0Q15 Retour caffut pièces sur demande fnr 2 0 € 1.0 0 € 138 € COSTES V0Q15 Manutention 15 0 € 1.0 0 € 1 038 € Duracion Gama: 2112 V0Q15 Suivi tri fnr réalisé sur site PSA 3 0 € 1.0 0 € 208 € Gama 2112

Legal Group

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Quality Contract

  • Request for 50% quality cost-sharing, independently of

warranties (commitment on 50% of COMEX ratio, first COMEX)

  • At SOP+12 months (if enough parts are available)
  • Coating supplier is indicated on the drawing (Job Coater). No

possible to add new supplier.

Legal Group

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Warranty Claim: RNPO is asking to cover the warranty of our parts on 36 months starting from the selling date of the car (Could start more than 1 year after the delivery) COMEX: RNPO is asking to cover the warranty cost partially or completely. At the starting point we should pay 50/50. The complete definition of the COMEX is in page 4 of the attached document. For our part I think that if it happens they will make a recall and not use that procedure.

Legal Group

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Obligation to subscribe Valeo insurance pool in order to be awarded with new business.

Legal Group

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Legal Group