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

2. 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

3. 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

4. Product Lines
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5. 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

6. 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

7. 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

8. 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

9. “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

10. “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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. Questions?
Copyright 2004, Visteon Corporation