Case study – Advising an automotive client in its turnaround effort
Transaction overview
Seller:
● Revenue c. € 2B
● Automotive subsidiary of a leading Chinese industrial conglomerate
● Global footprints in Germany, Spain, Mexico, Brazil, India, Hungary, China etc.
Target scope:
● Individual production plants in Europe with >1200 employees in total
Target scope:
● Individual production plants in Europe with >1200 employees in total
Project scope and challenges
Brownfield
project
● Due to excess capacity, the main project goal is to divest plants, assets and employees but retain the existing business in selected plants
Strategic
partnerships
● Sales of ICE-related products are decreasing due to the E-mobility transformation
● An overhaul of the product portfolio is required to maintain or generate sales
● Enrichment of product portfolio, especially for aftermarket
Purchase cost
reduction
● Decreasing turnover and excess capacity is increasing pressure on cost
● Purchase optimization and short-term cost reduction required to generate profit
Cross-Border
coordination
● Chinese public company
● Project communication in Mandarin, English, and German
Shentou value added:
● Brownfield spin-off project in EU and approach of potential partners with future-proofed products (battery, HMI, etc.)
● Benchmark and optimize key component procurement in Asia and find the best cost/performance suppliers
● Enlarging competitors’ part numbers to aftermarket portfolio to increase sales in line with the “last man standing” strategy
Service reference in the automotive industry
Supporting the (former) IWKA and its subsidiary companies Kuka, Ex-Cell-O AG, Boehringer Maschinenfabrik to do the co-production and localization of equipment for FAW/VW
Supporting the special machine JV between FAW and Ex-Cello-O AG
Exclusive purchase office for Deutz AG in China; training and qualifying more than 10 released key suppliers for Deutz; support the JV between Deutz AG and FAW Dalian engine works
Exclusive purchase office for Iskra Autoelectrica (today Mahle electromotor); supporting the Iskra Suzhou’s JV with FAW in Changchun; co-designing and developing the exclusive supply of AZD,AZE, AZF-starters to AwtoWaz in Russia
Exclusive purchasing office for Europart Germany for more than ten years; built up supplier relationships with more than 30 aftermarket manufacturers in mainland China, Taiwan and Korea
Purchase office for Pierburg Kolbenschmied
Purchase and quality office for Eurocarparts UK, QA/QC management of over 50 suppliers in China
Support the establishment of car production base of Geely in Belarus for the Russia, Belarus and Kazakhstan market
We are familiar with the spin-off cases of automotive suppliers
Selected spin-off cases in automotive sector
● Vitesco was the former powertrain BU of the Conti Grou.
● Vitesco spun off after treatment BU to support the group´s E-mobility strategy
● Shentou acted as a buy-side advisor of ActBlue to take over Vitecso´s after treatment BU in France
Supporting European Tier 1 automotive supplier group to spin off:
● Steering business in France
● EMS factory in France
● Diode factory in Australia