2016 china investor event beijing without fect

ACCELERATING GROWTH

Beijing – 8th September 2016

China strong market momentum,but structural change ongoing

Jingcheng LI

Beijing – September 2016

3

China is the largest market in the world since 2009

2.5

4.0

5.0

China Investor Day – 09/2016

China market represents 28% of worldwide volume and remains the major strategic market

China 2010-2016 Volume 2015 World Volume Split 2015 World Car Ownership

Source: CAAM July, WordAuto.com

Million Units

5.3% (YoY)

2.0% (YoY)

Car owner -

ship

[units/1,000

people]

Total car parc

[mn. units]44

248172

74

4

China macro economic situation getting stabilized

2.5

4.0

5.0


China economy is still growing fast with drivers’ shifting to focus on consumption

China GDP Evolution China CPI Evolution China Shanghai Stock Market Index

� 2016S1 GDP : 6.7%

� 2016Total GDP: 6.5%+

� 2017-2020 GDP: 6.5%

� 2016S1 CPI : 2.1%

� 2016Total CPI: <3%

� 2017-2020 CPI: <3%

� High fluctuation

� Impact on automotive

� Dynamic auto part companies

5

2016 China market continues to grow with mix evolution

2.5

4.0

5.0


2016 China market will grow in line with China GDP growth

Main Market Trends 2016 China PV Market Monthly and YTD Growth Rate Evolution

Source: CAAM July

� Tax Cut policy

� Growth pattern

� SUV

� C-OEM

� NEV

� New buyers

6

Structural change ongoing – Sedan segment

2.5

4.0

5.0


Sedan segment: I-OEM domination and growth slow down

Overall Market OEM Nationality Split Top 10 Best Selling Cars

Million Units

Sedan 2010 2011 2012 2013 2014 2015 2016(1-7)

Mkt share 52.6% 54.6% 55.7% 54.6% 52.7% 47.6% 43.6%

Mkt share: sedan sales volume in total market

Source: CAAM July

7

Structural change ongoing – SUV segment

2.5

4.0

5.0


SUV segment: fast growth, C-OEM gaining market share, but I-OEM multiply SUV offers


2.5

4.0

5.0

Million Units

Mkt share: SUV sales volume in total market

SUV 2010 2011 2012 2013 2014 2015 2016(1-7)

Mkt share 7.3% 8.7% 10.4% 13.6% 17.4% 25.3% 30.1%

Source: CAAM July

8

Structural change ongoing – MPV segment

2.5

4.0

5.0


MPV segment: strong growth, dominated by C-OEM, next market booster?


2.5

4.0

5.0

Million Units

MPV 2010 2011 2012 2013 2014 2015 2016(1-7)

Mkt share 2.5% 2.7% 2.6% 5.9% 8.2% 8.6% 9.2%

Mkt share: MPV sales volume in total market

Source: CAAM July

9

Growth driver moves to low Tier cities

2.5

4.0

5.0


Different level of development in China offers constant market potential for coming 10 years


Tier 1-2 Cities

� Megacities registration

restriction in 8 big cities

� Market saturation led to

replacement market

Tier 3-6 Cities:

� low Ownership per 1000

persons

� Urbanization policy to drive

population increase

10

C-OEM improving their quality and customer satisfaction

2.5

4.0

5.0


Ratio quality / price and external style a la mode explain the success of Chinese brands


� C-OEM brand improved SSI

score at 31 in 2015 vs 2014

� C-OEM brand increased re-

purchase rate for same

brand vehicle from 7% to

11%

Source: JD Power

11

2.5

4.0

5.0


Overall positive market environment during 13th Five Year Plan period for automotive

Macro Economy Reform & Opening Industry focus

2.5

4.0

5.0

Main guidelines of 13th 5 Year Plan: 2016 - 2020

� 2020 GDP / Individual Income

doubled vs. 2010

� Average +6.5% per year

� 90 Tri. CNY in 2020

� Labor productivity focus

� Balance urban and rural

� Urbanization rate 60%

� 100Mn people rural to urban

� Infrastructure investment

� Reforms

� Property ownership

� Rule by law

� Job creation > 50 millions

� Opening

� One Belt One Route

� Free trade zones

� Chinese currency

� Ecology / Environment

� Water saving -23%

� Energy saving -15%

� CO2 emission -18%

� Automotive Industry

� R&D investment

� Chinese brands

� NEV

12

Energy-Saving vehicles

(ESV)

New Energy Vehicles

(NEV)

Intelligent Connected Vehicles

(ICV)

2020 Objectives

• PV fuel consumption rate 5L / 100km

• CV fuel consumption close global lever

• Chinese brands share at 40%

• China PV core parts supply share >50%

• China CV core parts supply share >70%

• 5 China OEM ranked among Top 10

2025 Objectives

• PV fuel consumption rate 4L / 100km

• CV fuel consumption reach global lever


• China PV core parts supply share >60%

• China CV core parts supply share >80%

• 3 China OEM ranked among Top 5

• 20% of CV volume for export

• Chinese brands NEV over 1 million units


• Sales volume among global Top 10

• Chinese core parts supply share 80%

• Master key technology of Vehicle configuration, Performance control, Energy management, Lightweight

• Chinese brands NEV over 3 million units


• 2 China OEM among global Top 10

• Chinese core parts supply share 100%

• 10% of volume for export

• Collaborative Innovation on Lightweight, Informatizationand Intelligentize

• Build ICV eco-innovation system

• Connecting equipment take rate 50%

• Driving Assistance take rate 30%

• Partial Autonomous Driving take rate 30%

• Master key technology of sensor and controller

• Basically build a fully autonomous ICV industrial chain and Intelligent transportation system infrustructure

• Connecting equipment take rate 60%

• Driving Assistance take rate 50%

• Partial and Highly Autonomous take rate 50%

• 1 Chinese supplier among global Top 10

Strong push for Chinese brands and NEV / EV

Made in China Strategy and impact on automotive


13

China mid term plan backed by strong 13th 5 YR plan

2.5

4.0

5.0


China market continues to grow during 13th Five Year Plan period

Main Market Trends 2016 – 2020 China market production volume evolution

26.0 26.6 28.3 30.131.6

6.3%

2.3%

6.4% 6.2% 5.0%

0%

2%

4%

6%

8%

10%

0

10

20

30

40

2016 2017 2018 2019 2020

Million Units

Source: LMC July

� Still growing market

� 2017 weak due to tax

incentive stop

� Future growth

� Below GDP rate

� SUV / MPV

� NEV

Faurecia solid foundation in China,with clear growth and profit drivers

Jean-Michel VALLIN


15

More than 20 years’ presence in China

2.5

4.0

5.0


Faurecia has developped a solid presence in China and enjoyed a fast growth in the past decade

2002 2011 2015

� Raw material, components, process, equipment

� Quality system, lean production system

Manufacturing

� Engineering and validation

� Program management

Industrialization

� Tech Center fully autonomous

� Advanced development for China market needs

� Local innovation

R&D and Innovation

1994 2005 2013

€1.0bn

2010

€2.5bn

2020

� Strategic partnership

� Chinese brands focus

� Commercial vehicles focus

� Competitiveness improvement

Business Expansion

Ambition

€5.0bn

16

Solid foundation and fast growing in China

2.5

4.0

5.0


Solid presence benefits from the strong business development

� Headcount 13.500

� R&D centers 4

� Engineers 1,000

� Present in 21 Chinese cities

Key Data Sales Evolution Plant Evolution

� CAGR > 20%

� Organic growth

� I-OEM

� Successful launching

� Geographic coverage

� Loading optimization

2014201320122011 2015 2014201320122011 2015

17

Diversified and balanced client portfolio

2.5

4.0

5.0


Constant goal and strategy drive the whole China organization toward the excellence

Customer Centric 2015 Sales Composition

� Diversification / Balance

� Strategic Suppliers

� Global Programs

� C-OEM Potential

18

Faureica Strategy in China since 2010

Constant established strategy in China

Road map developped for each strategy to face the new challenges from China “New Normal”

� Global programs’ acquisition

� Customer portfolio diversification

� Product portfolio diversification

� OEM connection

� Regional presence

� Business development acceleration

Organic growth with core and emerging clients

Partnership as OEM intimacy leverage Manufacturing operation excellence at benchmark level

� Quality & HSE best in class

� Flawless new launchings

� Operation efficiency and cost optimization

� KPI constant improvement

� ECRs efficient management

� VA VE portfolio enhancement

� Fully owned asset, world wide network

� Deep expertise localization and regional presence

� Advance innovation and industrial style for China

Program development excellenceWorld class R&D providing values to customers

Strong leadership team to drive the growth plan

� A strong Chinese mgmt. team

� Training and development plan

� Organization and resources

1

4 5 6

32


19

Organic growth is the 1st priority for business growth

2.5

4.0

5.0


Organic growth is further supported by the strategic partnership with main China OEM Groups

Key Objectives / Focus New Business Awards Main Actions

� I-OEM

� Global programs

� New footprint

� Content expansion

� C-OEM

� 20% in total Sales by 2018

� 30% in total Sales by 2020

� Global programs

� New product lines in China

� Interior deco

� Seating soft trim

� ASDS, TR, C-Mixer

� SAIC / BAIC / GAC / CCAG

seating market breakthrough

� Industrial style and perceived

quality for Chinese brands

� Significant new business awards

since 2014 and acceleration in

2016: over € 12Bn for 3 years

� All 3 Business Groups’ awards

and well balanced client portfolio

� C-OEM awards share sharply

increased to 30% of total awards

in 2016

� Well present in SUV new models

both with C-OEM and I-OEM

20

Strategic partnership provides strong business booster

2.5

4.0

5.0


Each Business Group has clearly idenfitied its business growth drivers in China

Key Objectives Chang’An Dongfeng

� Win-Win in new auto context

� Business growth combining

� Techno / product expertise

� Market resources

� Management skills

� Local solutions

� Group to Group approach with

long term goal and vision

� Prepared for consolidation and

selective M&A

� Interior System Joint Venture in

2013

� Target 3 Business Groups’ Sales

at € 1Bn by 2020

� Initial objectives overpassed

� Interior strong growth

� Seating included

� Chang’An biz breakthrough

� R&D capability, industrial style,

perceived quality, specific

products for Chang’An brands

� Interior and Exterior Systems

Joint Venture in 2015

� Target 3 Business Groups’ Sales

at € 1.5Bn by 2020

� Successful launching

� Interior strong growth

� Chengdu new site SOP

� Dongfeng biz breakthrough

� Emission Control Technologies

new partnership

� Reinforce R&D capability

21

Sales development main drivers

2.5

4.0

5.0


Business development is backed by strong industrial tools with operation excellence in China

Automotive Seating Interior Systems Emission Control Technologies

� Global programs

� Metal leading position

� Seat mechanism

� Global platform

� Dragon 3.0 (low cost)

� JIT challenger position

� SAIC breakthrough

� Foton breakthrough

� Other opportunities


� Global programs

� Strategic Partnership

� Chang’An

� Dongfeng

� Other opportunities

� New product lines

� Interior decorative

� Interior acoustic

� New cockpit of the future

� Market consolidation

� Global programs

� Market leading position

� New product lines

� Heat recovery

� Commercial vehicles

� Marine application


� Market consolidation

� Minority shareholder buy out

22

Footprint covering all auto clusters Recognized ExcellenceBenchmark Operation

Nationwide footprint covering all main auto clusters

Operation excellence starts with program development excellence in all aspects

2016 BG PPM in China

Mother Plant – Global Practice


23

Program excellence for improving the future performances

2.5

4.0

5.0


China market faces new technology trends impact to be addressed by R&D teams

Key Objectives Program Dashboard Main Actions

� No-event flawless launching

� Quality, Delivery, Cost

� Product

� Process

� Customer recognition

� Margin enhancement

� VA / VE portfolio preparation

� R&D / Tooling constant

optimization

� C-OEM special focus

� Fully localized and competent

program teams

� Program management

� Global network

� Customer intimacy

� Speed

� Strategic Joint Ventures

equipped with right competences

� Cost action and roadmap

� C-OEM dedicated team

� Over €10Bn new programs in

development

� Portfolio in line with targets

� Customer mix

� Car body mix

� Margin level and potential

� Program management rigor and

discipline demonstrated in

� Development timing

� launching performances

24

Driving Well Being Cockpit of the FutureSustainable Mobility

World-class R&D capabilities already in place to support growth

Cost competitiveness becomes more and more important in moderate growth market

� Faurecia China has developped World Class

R&D centers for 3 Business Groups with

innovation capability

� Internet related industry and service will

introduce mega technology trends for auto

and auto parts

� China R&D centers for

� Future technology and product strategy

� Digital plant

� Faurecia “Driving Well Being” projects

� Advance innovation

� Emission reduction

� Heat recovery

� Light weight

� New material

� New product / process

� FIS deco parts

� FAS soft trims

� New habitacle functions

� Low cost platforms

� Smart connectedness


25

Key Objectives R&D / ToolingManufacturing

Cost reduction with clear road map drives future profitability

Average R&D / tooling cost reduction target -30% in 2 Years

� Supply Chain revolution

� Localization

� Volume massification

� Vertical integration

� Efficiency / Automation

� Capex / Footprint

� Hourly rate

� Regional presence

� Panel supplier change

� Spec review

� Innovation

� Market growth rate slow down and

consolidation to anticipate and prepare

� Further cost down potential with increasing of

business scale

� Protect long term profitability level to sustain

the development in this strategic market

� R&D / Toolings

� Manufacturing

� SG&A

� Finance and Tax


Clean Power solutions,new business growth driver

Mathias MIEDREICH


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Strong sales growth driven by technology and regulation

Technology leadership

Value through stringent regulations (passenger cars)

Forward to an emissionized world(trucks and high horsepower)

Total sales

€7.4 bn

2015

Market leadership reinforced

27

Total sales

~€15 bn

2025

>7% CAGR


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The world is getting emissionized

28

Emissions Control Market* Value€ billion

Increase in market value coming from new regulations, new systems and new markets

* Includes substrates and PGMs. Excludes urea tanks, HPEGR, sensors

41 41

25

2015 2025

2015-2025 Key Growth Drivers

Expansion of Off-Road

& High Horsepower

(HHP) legislation+9 bn

Powertrain technology

evolutions (ICE, Hybrid)

On Road regulations

(light and commercial)

+16 bn

1

2

66


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Passenger car: regulations (CAFE, RDE) drive the need for more efficient and cleaner vehicles

29

1

CO2

emissions

reduction:

CAFE

Pollutants

(PN) emissions

reduction:

6x10^12

6x10^11 6x10^11

2015 2020 2025

Homologation cycle Real-driving emissions

-90%

2.1x 2.1x

Fuel efficent vehicles

through Lightweight

(10 kg represents 1g CO2/km)

Energy Recovery

Cleaner passenger cars through

Advanced after-treatment solutions

Average

CO2

emissions

(g/km)

Average

Particulate

Number (PN)

emissions

Gasoline

(#/km)

* ICCT Study

Introduction of CN6 in 2020

will drive a need for a 90%

reduction in PN emissions

compared with 2015 in 2020

N/A

China 6 Draft Regulation

By 2025 will need to go from

average 6L/100km to 3.3L/100 km

180

160

130

95

75?

115

90?

125

95 Target

Target

Target

EUR

CHN

US

200

180

160

140

120

100

80

60

Time (year) 202520202015

-40%

RDE Monitoring & Reporting Only

RDE Compliance Mandatory


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On-road commercial vehicles: India and China regulation converging with mature markets, driving market value up

1

30

NOx Emissions Limits (g/kWh) Emissions Control Market Value (€ bn)

On-road commercial vehicles

11.013.0

17.0

2015 2020 2025

-

1

2

3

4

5

6

2010 2015 2020 2025

Europe

China

India

Brazil

China

On-road commercial vehicles (€ bn)

1.0

2.8

5.8

2015 2020 2025


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The world is getting emissionized

31

Emissions Control Market* Value€ billion



41 41

25

2015 2025

2015-2025 Key Growth Drivers


& High Horsepower

(HHP) legislation+9 bn


evolutions (ICE, Hybrid)

On Road regulations


+16 bn

166

2


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Emission Control Legislation for Marine & ShipsMarine Emission Control Technologies will be single biggest market in HHP / Offroad

Regulation in China for Pearl River Delta, Yangtze Delta and Bohay Bay confirmed for 01.01.2018

ECA = Emission Controlled Area

Tier III effective for ships built after January 1st. 2016, reducing NOx limit by 80%

2

China Investor Day – 09/2016 32

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73% 67%

25%

27% 33%

75%

2015 2020 2025

0.4

1.2

3.3

2015 2020 2025 2030

First-fitFirst-fitAfter-marketAfter-market


Increasing number of regulated

Off-road and HHP engines (% of engines)

Increase in value of Off-road

and HHP market* (€ billion)

EmissionizedEmissionizedNot EmissionizedNot Emissionized

5.7

Legislation for Off-road and High Horse Power is expanding creating new demand and new business models for advanced exhaust systems

2


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Faurecia’s key enabler to capture growth =

TECHNOLOGY


& High Horsepower (HHP)

legislation+9 bn


evolutions

(ICE, Hybrid)

2015-2025 Market Growth Drivers

On Road regulations


+16 bn

1

2

Implications for exhaust systems providers:

� More sophistication

� More innovation

� New business models


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Faurecia Value Spaces for fuel economy and air quality

35

ENERGY MANAGEMENT LIGHTWEIGHT TECHNOLOGIES

-20 KG

Exhaust Heat

Recovery System

Exhaust Heat

Power Generation

Fuel

Economy

Air

Quality

POLLUTANT MANAGEMENT FOR COMMERCIAL VEHICLES , OFF- HIGHWAY AND HIGH HORSE POWER

Brazing process Acoustic Valve Resonance free pipe


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Reduced CO2 emissions: 3g/km

Increased fuel economy (up to 7% on hybrid vehicles)

CUSTOMER BENEFITS MARKET SHARE TARGET

30%

Energy Recovery Technologies

CO2 reduction from wasted heat

� Recover energy lost through exhaust heat transfer

� Accelerate powertrain and cabin heating

� Increase electric range (hybrid)

EXHAUST HEAT RECOVERY SYSTEM (EHRS)

Compact EHRS

Exhaust Heat Recovery System

30% of

energy is

lost in the

exhaust gas

36China Investor Day – 09/2016

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EHRS makes Hyundai Ioniq more fuel efficient

Faurecia

EHRS

Faurecia EHRS technology

used on all hybrid versions

SOP

January 2016

Hyundai flagship

green car


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SCR Commercial Vehicle

Cleaner power for on-road applications

38

CUSTOMER BENEFITS MARKET SHARE TARGET

COMPACT MIXER

� Compact AdBlue® mixing device enabling

breakthrough architectures

� Improved mixing performance to cope

with future powertrain technologies

40% less mass/volume: - 80kg

DeNOx efficiency compliant with future regulations

25%


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Technology gives Faurecia leadership position

with over 50% of China’s heavy/medium duty market for CN6

2015 2020 2025

Faurecia Emissions Control Sales

China on-road commercial vehicles

2021: CN6

introduction

21%

14%

17%17%

12%

13%

6%

2021 China HD/MD Truck and Bus engine

market share

Customer Awards

for CN6 regulation

engines

Global

Partnership

Dongfeng

Others

39

MARKET SHARE TARGET

35%

CN4 Emission System price: 900 RMB – 1.600 RMBCN6 Emission System price : 6.500 RMB – 11.000 RMB


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Easy maintenance for end-user

Volume saving (-45%)

50% - 80% less NOx than AdBlue in urban driving

CUSTOMER BENEFITS

ASDS FOR ON-HIGHWAY

Breakthrough in de-NOx performance through Ammonia Storage Delivery System (ASDS)

� NOx reductant (NH3) stored in a salt within a cartridge allowing

two times more density than Automotive Ad Blue (30% urea)

� Unique de-NOx performance in Real Driving Conditions

� Easy-to-handle, no deposit

� Alternative to AdBlue®


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Ammonia Storage Delivery System commercial trials in China and Korea confirm technology performance in urban buses

By collaboration with environment

protection organizations

Fleets Demonstration

With leading CV OEMs to meet

the regulation of CN5 and CN6

OEM Program Development

To feed fleet operation and to exemplify

process of refill industrialization

Refill Station In Shanghai

Faurecia ASDS

Industry-best solution to effectively treat NOx emissions

for CVE, superior to AdBlue-based solutions

in City Driving Conditions.

ASDS for HD Application

ASDS for LD Application

0 2 4 6 8 10

Engine Out

Ad-Blue

ASDS

NS5 NS4

NOx g/kw.h

*1000 hours operation, city bus with 6.7L Euro4 engine

41

55% lower


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ASDS – Live Tracking of Emission Performance


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� NOx reductant (NH3) stored in a bulk salt and patent

process to release in large volume of NH3 gas.

� Utilizes higher exhaust temperatures pre-turbo,

Does not require exhaust to be heated, TCO benefit

� On Engine application, no mixing length required,

simplified after treatment

BREAKTHROUGH IN DE-NOX PERFORMANCE

New Value Space

Ammonia Storage Delivery System for marine applications

Space saving (-45%), versus AdBlue®

Weight saving (-36% versus liquid urea solution)

Reduces impact of Sulfur on SCR function, (eliminates Scrubbers)

43

CUSTOMER BENEFITS


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Strong sales growth driven by technology and regulation

Technology leadership

Value through stringent regulations (passenger cars)

Forward to an emissionized world(trucks and high horsepower)

Total sales

€7.4 bn

2015

Market leadership reinforced

44

Total sales

~€15 bn

2025

>7% CAGR


Conclusion

Jean-Michel VALLIN


46

Strong China Management Team

2.5

4.0

5.0


Highly Motivated, Result Driven, Multi-Cultural Senior Management Team in China

EVP & China PresidentJean-Michel VALLIN

FECT Asia VPMathias MIEDREICH

FAS China VPSam XIA

FIS China VPNicolas DELAHEGUE

Strategy & Partnership China VP

LI Jingcheng

China HR VPKathy SUN

China Technology Strategy VPWANG Qiong

China Finance VPKrzysztof MUSKALA

FECT China VPJIANG Yongwei

47

� China remains the strategic market and will continue to grow

� Market CAGR at 5% from 2016 to 2020

� Under market structural change, Faurecia China special focus mainly on

� Strategic partnership development

� Chinese brands business development

� Commercial vehicles business development

� Cost optimization

� Strong motivated management team with result driven mindset

� Market consolidation opportunities to be further studied

Conclusion

2.5

4.0

5.0


2016 china investor event beijing without fect

Documents