(Microsoft PowerPoint - GAZ 2012-09

“GAZ Full Speed Ahead!”
How we did it…
…But, still “much to do”
Bo Andersson
FKG Stora Leverantörsdagen
September 13, 2012
My Focus Today
1. Russia:
Today and Tomorrow…
2. GAZ Group:
Who We Are…
3. Key Decisions:
Strategy and Results!
4. WTO:
Russia’s Entry
5. Opportunities:
How to Approach Russia
6. Summary
September 13, 2012
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RUSSIA: Today and Tomorrow
RUSSIA:
One of world’s fastest growing markets
Future
Opportunity
(2011 data)
• GDP growth:
+ 4.2%
• Consumer Spending
+ 20%
• FDI increase:
+ 20%
• Vehicle sales:
+ 40%
…the ‘Middle Class’ consumer is on the rise.
3
GAZ Group: Who We Are…
4
GAZ Group: Nizhny Novgorod Site
5
Strong Leadership in Several Segments
September 13, 2012
6
GAZ Financial Results: 2007 – 2011
Significant improvement on ALL Key Metrics
SALES, B-RUB
Sales / Employee,
K-RUB
EBITDA, B-RUB
EBITDA, %
Net profit (loss),
B-RUB
Net profit (loss), %
Debt / EBITDA
2008
2009
2010
2011
2012
(actual)
(actual)
(actual)
(actual)
(6 mos.)
143.1
65.8
96.7
132.4
57.6
106
75
140
191
174
(2.0)
(3.2)
9.3
13.97
9.7%
10.5%
6.2
10.7%
2.1
8.5
3.1
2.2%
6.4%
5.4%
4.6
2.4
MINUS
(30.5)
MINUS
N/A
MINUS
(10.7)
MINUS
N/A
GAZ Group is now Russia’s strongest automotive company
September 13, 2012
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Key Decisions: ‘Turn-around’ Strategy
1. Discipline!
2. Cut direct expenses
−
−
Headcount reduction; Property rationalization
Improve working conditions and compensation
3. Kill unprofitable programs
−
Siber, Volga, Maxus
4. Operational Efficiency
−
−
−
Improve Quality / Productivity
Update Models
Increase Sales
5. Pay-off debt
−
Loan consolidation and prioritize pay-off
6. Long-Term Strategy
−
−
New Models: GAZelle Next; GAZon Next; Frame Bus; etc.
Contract manufacturing: GM, VW/Skoda, Daimler
7. Purchasing…
−
Global Competition
September 13, 2012
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Taking Care of the People
September 13, 2012
Upgraded Factory
• Latest Technology at workstations
Installed New Showers & Toilets
• Full-service for workers
Renovated Cafeteria
• Modern facilities
• Discounted meals
Introduced Bonuses
• Motivation program
available to ALL workers
September 13, 2012
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“NEXT” LCV Generation:
Ensuring Future Competitiveness
September 13, 2012
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GAZ Group Stand at 2012 Moscow Auto Show
11
Platform Flexibility to Create Full Vehicle Range
Drop-side truck and
chassis cab (GVW 3.5t)
Sobol Next
Minibus
Van
Double Cabin
GAZelle Next (GVW 5t)
Plus over 100 modifications of specialty vehicles
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LCV
Contract Manufacturing Partnerships
Mercedes Benz ‘Sprinter’
CAR
Chevrolet ‘Aveo’
Skoda ‘Yeti’
Skoda ‘Octavia’
VW ‘Jetta’
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
GAZ Group will leverage contractual partnership for 8+ years.
September 13, 2012
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Contract Manufacturing Benefits
World Class Products and Quality
World Class Workstations
World Class Equipment
Training
14
Investments in the Future
Investments in key projects for the next 2 years: $ 400 M-USD
September 13, 2012
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Supplier Intelligence: Who & Where are
they?
< 3 h from NIZHNY REGION
405 Suppliers
< 8 h from NIZHNY REGION
705 Suppliers
> 8 h from NIZHNY REGION
525 Suppliers
Outside Russia
58 Suppliers
Top 50 Suppliers
(by Spend)
51-100 Largest Suppliers
(by Spend)
Suppliers smaller than Top 100
(by Spend)
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Automotive Opportunity in Russia
Huge and Growing market
Russian market is expected to grow to 2,8 mln. cars and LCVs in 2012,
and eventually surpass Germany as Europe’s largest Auto market
Many ‘WTO effects’ will be mitigated, and significant benefits remain
for local production and partnerships between foreign / Russian OEMs
Risks
Russia is an untapped, but unknown market for most companies
However, current economic trends and Russia’s proximity to the EU
make risk more manageable than, e.g. China
The Russian opportunity: How to begin…
First: Establish a ‘sales relationship’ with Russia
Next: Leverage international experience and superior efficiency
Later: Consider Localization: “Produce where you sell”
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Summary
1. RUSSIA’s Future: Growth & Modernization
2. GAZ Strategy:
Follow the market
3. Effect of WTO:
Opportunity
4. Opportunities for Automotive Suppliers…
… QUESTIONS …
September 13, 2012
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