Visteon: the way forward in China Cliff Dawson, Director Asia Operations Copyright 2004, Visteon Corporation

Agenda Visteon Overview Key relationships in China The joint venture success model The China slowdown – impacts and responses from suppliers Questions Copyright 2004, Visteon Corporation

Visteon Corporation $18.7 billion diversified manufacturer of automotive components and systems Capable of supplying approx 40% of a vehicle’s material value Approximately 72,000 employees, on 6 continents, in 25 countries Business with nearly every global automaker See slide for messaging. Copyright 2004, Visteon Corporation

Product Lines Copyright 2004, Visteon Corporation

Visteon Asia Pacific Facts Been in the region for more than a decade 12,000 employees 34 facilities Includes technical, manufacturing, sales and service centers 7 key partners Well positioned with key customers Copyright 2004, Visteon Corporation

Visteon AP Operations A/C Systems, Compressors, Radiators, Condensors, Heater Cores, Evaporators, Air Handling Assy. Fan & Shroud Assembly Visteon JV Visteon 100% Products Yanfeng Visteon Beijing Interior Systems Compressor Al.. Radiators Interiors HCC Dalian UARCO Changchun HCC Korea Pyongtaek, Taejon, Ulsan Duck Yang Group Ulsan, Yesan, Asan Visteon Climate Control Beijing HVAC IP, Cockpit Module A/C Systems, Condensers, Evaporators, Heater Cores, Controls, HVAC Assy. JCS Hiroshima Interiors Yanfeng Visteon Automotive Trim System Co., Ltd Chongqing ABS, Airbag RKE, GEM Visteon Electronics Hiroshima Powertrain Cooling, HVAC, Heat Exch. Visteon Engine Control Systems Chongqing IP, Seat, Door Panel Trim, Bumpers Yanfeng Visteon Shanghai CSIL Bhiwadi Radiator Visteon Electronic Shanghai Exterior/ Interiors Plastics VASI Pune GEM, Clock, Amplifiers, SWAM, Cluster As you can see we have an extensive footprint with our operations and what we manufacture in the region. This year we will open a new $80M compressor facility in Dalian, in northeastern China, that will enable us to expand our climate leadership in the region. The compressors will be supplied to major automakers in China and the Asia Pacific region. We also opened a $24M climate control facility in Beijing. Visteon Climate Control Beijing Co. Ltd. is majority owned by Visteon and will produce air conditioning and engine cooling modules. The Beijing facility is an excellent example of the kind of on-going collaboration taking place between Visteon and HCC. Actually, we began this business in a temporary facility and completed the new facility construction in record time this past summer. A/C Systems, A/C Hoses, Plastics (IP, Clusters, Bumpers) VASI Chennai Yanfeng Key Safety Systems HCC Thailand Rayong VPCSI Chennai Starter, Alternator Dongfeng Visteon Wuhan, Guangzhou, Shiyan Jiangxi Fuchang Nanchang Visteon Philippines Santa Rosa S/W, Airbag, Side Airbag, Seatbelt A/C Systems Condensers Al. Radiators, Controls, Evaporators, Heater Cores, HVAC Assy. IP, Cluster, Trim Parts VTL Thailand Rayong Al. A/C Hoses A/C Systems Fuel Rail, FDM, Throttle Body Interior, Exterior Trim Copyright 2004, Visteon Corporation

Visteon in China 1 Climate Control Interior/Exterior 2 Electronics 3 Changchun UARCO (FAW-VW; FAW) Aluminum Radiators/Heater Cores 1 Climate Control Beijing Visteon Climate Control Beijing (Hyundai) HVAC, Engine Cooling, Heat Exch.Components Interior/Exterior 2 Electronics Yanfeng Visteon Beijing (Beijing Hyundai, Beijing Jeep, Beijing Futian) Interior systems and components 3 Powertrain Chongqing Yanfeng Visteon Chongqing. (Changan Ford) IP, Cockpit Assy, Bumper, Door Panel Visteon Powertrain Chongqing (Changan, Changan Ford) Air Intake Systems, Powertrain Controls 4 Changchun 5 1 8 Beijing Shenyang Wuhan/Shiyan/Guangzhou 7 2 3 Dongfeng Visteon (PSA, Nissan, Honda) Interior systems and components, Exterior Trim Dalian 6 13 Yantai 7 Shanghai Yanfeng Visteon (SVW, SGM, SAIC, Chery, Other OEMs) IP, Seats, Door Panels, Consoles, Bumpers, Int/Ext Trim 7 Xuzhou 8 Shiyan Shanghai Wuhan Yanfeng Visteon Electronics (Ford, Mazda, SGM, SVW, Fiat, Other OEMs) GEM, Clock, Cluster, Radios, Amplifiers, KES 7 8 9 10 11 8 6 6 7 8 Shaoxing Chongqing 4 5 8 12 Nanchang 9 Visteon Asia Pacific Corporate Office China Technical Center 10 Shenzhen 8 11 China Commodity Sourcing Office Nanchang Jiangxi Fuchang Climate System (Jiangling Motors) A/C Hoses & A/C Systems Assy 12 Note: Does not include operations of Yanfeng Visteon JVs with JCI (Seat Systems) and Key (Safety Systems) Dalian Visteon Climate China (Hyundai, Ford) Compressors 13 Copyright 2004, Visteon Corporation

Key Relationships in China Halla Climate Control Beijing Automotive Industry Corporation (BAIC) Shanghai Automotive Industry Corporation (SAIC) These relationships have enabled us to access new markets and customers. One of our strongest and most significant relationships is with Halla Climate Control facility, in Korea. Halla is a market leader in Korea and a source of operational excellence – the staff is outstanding in the way it approaches design, development and manufacturing of product. When we set up our highly successful Yanfeng Visteon joint venture in 1994, we decided to partner with one of the country’s fastest-growing OEMs -- Shanghai Automotive Industry Corporation -- to gain customer and market access. That decision proved correct, as Yanfeng has grown exponentially over the past 10 years. Another partner of ours -- BAIC (Beijing Automotive Industry Corporation) is a major automotive OEM in China. Visteon has a climate control joint venture with BAIC, the partner for Hyundai Motors Corporation. Yanfeng Visteon also has a joint venture with BAIC for automotive interior products supporting Beijing Hyundai and other customers in the region. BAIC is a strategic customer/partner following SAIC and DFM. (BAIC ranked 3rd largest for volume last year) Copyright 2004, Visteon Corporation

“One Platform” Cooperation Strategy Formula for JV Success: Two strong partners with an equal stake in the success of the business Visteon Advantages SAIC Advantages Technology and advanced management processes Market and local knowledge/capabilities One YFV Team “One Platform” Cooperation Strategy Copyright 2004, Visteon Corporation

“One Platform” Advantages SAIC: Support SAIC’s systems-oriented business consolidation strategy Accelerate development of Yanfeng Visteon Technical Center capabilities to support SAIC’s future development Visteon: Leverage the resources and capabilities of Yanfeng Visteon in Shanghai to support growth of business with Visteon’s global OEM customers throughout China Human Resources Manufacturing / Technical Capabilities Financial Resources Integrate the majority of Visteon’s China business under a single management structure with a coordinated strategy Copyright 2004, Visteon Corporation

China Technical Center Will serve as regional engineering hub for electronics and interiors Scheduled for completion last quarter 2005 Will include Visteon and Yanfeng Visteon engineering staff Will house prototyping and lab facilities to support interiors and electronics Development of products for global and regional consumption The China technical center, is due to open later this year. It will house about 300 Visteon engineers and support staff, along with 400 engineers from Yanfeng Visteon – building capacity is approx 1,100. The new tech center will house prototyping and lab facilities to support interiors and electronics products that could be applied to both global and regional use. It will be comprised of two buildings: a main building that will house engineering and support personnel and a Testing & Development building that will house a styling studio and testing facilities. China Technical Center Copyright 2004, Visteon Corporation

China’s Auto Market Slowdown Golden period 2001 – 2004 - substantial year on year growth - opportunities for OEMs and Suppliers - hungry market Companies setting up in this period had growth plans based on recent history Overcapacity begins to impact the market Controls on the economy applied in 2004 compound the situation Copyright 2004, Visteon Corporation

China’s Auto Market Slowdown Result has been market “normalization” China begins to “feel like” the more established automotive markets of the world China will continue to be a positive market in which to operate Normalization of the China market will require more sophisticated responses from suppliers Copyright 2004, Visteon Corporation

China’s Auto Market Slowdown What are the appropriate responses to “normalization” Strengthen partnerships developed in China Broaden scope of established partnerships Begin to rapidly apply established techniques Supply chain management Lean manufacturing Local and regional sourcing Look to build local capability Design capability Engineering and Development Sourcing and supplier management Program management Copyright 2004, Visteon Corporation

China’s Auto Market Slowdown Essential but difficult Greater autonomy and flexibility is needed Quality and cost are the most dominant factors for successful suppliers Copyright 2004, Visteon Corporation

Summary: the way forward for suppliers China remains the most exciting market to be in despite is slowdown and rapid change Partnerships are the key to long term success The “normalizing of the market” requires suppliers to provide appropriate responses to maintaining a strong position in the automotive supply base Copyright 2004, Visteon Corporation

Questions? Copyright 2004, Visteon Corporation