China Pushes Us Forward! - Desireable Market versus Several Challenges

China Pushes Us Forward! New Insights: Results of an Executive Survey of European Suppliers Presentation Frankfurt, 20 September 2011 Dr.-Ing. Gerhard Nowak – Managing Director – P_GNW_ME566_110914-00 New Insights: Results of an Executive Survey of European Suppliers China Pushes Us Forward! The executive survey reveals three major challenges for European suppliers regarding business activities in China  Strong expansion despite slowing growth Both the attractiveness as well as 1 the incalculabilities of the Chinese  The customer structure is changing market are increasing  Entrepreneurial action is increasingly not self-determined  Innovation and service – the prerequisite to future business Know-how and innovative power 2 remain the USP of European  Smart innovations are the foundation of sustainable suppliers success  Protecting innovations requires greater diligence  The Chinese upper class is focusing on prestige mobility European companies are focused 3 on automobility instead of geared  Electromobility is considered very attractive for China to mobility  Mass mobility apart from the automobile is being neglected  Reasons and background of these challenges  Strategies on how to handle these challenges and  How to be proactive on the Chinese market X_DSS_ME555_110915-02 New Insights: Results of an Executive Survey of European Suppliers China – Desireable Market versus Several Challenges Although the PV market is growing at a much lower rate than expected it is still interesting to enter. This entails several challenges for suppliers and necessitates the preparing of adequate strategies I Desireable Market II Challenges China PV Currently released capacities for Annual 1 Cost pressure for mass market  Sales Growth Rate [„000 units] PV production: 40m [%] 20,000 51% 55 18,570 17,280 50 15,000 11,520 14,630 15,980 14,003 14,703 45 2 Consolidation of Chinese OEM  13,540 13,336 40 34% 12,701 12,096 35 34% 30 10,000 8,620 25 5,700 18% 20 3 Chinese 12th five-year plan: E-mobility  5,000 15 8% 9% 8% 7% 10 7% 5 5% 5% 5% 5% 5% 0 0 2008 2009 2010 2011 2012 2013 2014 2015 4 Regulations for new technologies  (e.g. EV-components) III Strategies Product Engineering Production Supply Chain P_DSS_ME555_110915-01 New Insights: Results of an Executive Survey of European Suppliers I Reduced Sales Figures in 2011 – Impact on OEMs and Suppliers The forecast growth rate for 2011 of initially 10 - 15 % was officially reduced to 3 - 5 % in 2011. This will cause further pressure on OEMs and their suppliers China PV Annual Sales Growth Rate [„000 units] [%] 20,000 51% 18,570 55 17,280 50 15,980 14,703 45 11,520 14,630 14,003 15,000 13,540 13,336 40 34% 12,701 12,096 35 34% 30 10,000 8,620 25 5,700 15% 20 5,000 15 8% 9% 8% 7% 10 5 7% 0 5% 5% 5% 5% 5% 0 2008 2009 2010 2011 2012 2013 2014 2015  Growth rate already reduced in 2011 with impact on future growth rate  Several business cases of suppliers assumed annual growth rates of 8%  Need to find alternative areas of application to reduce the pressure : Forecast 01/2011 : Forecast 08/2011 incl.