Dave Carroll & Roger Stone Capital Markets Day 2004...

Dave Carroll & Roger Stone Capital Markets Day 2004

Developments in Powertrain

2

Agenda

• Powertrain Overview• Powertrain Overview

• Stackpole Update

• Powertrain Developments

• Systems Update

• Summary

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High Value Segment

Content per vehicle = $2,750

Engine$1,800 perVehicle

Transmission$950 per Vehicle

4WD Transfer Case$450 per Vehicle1

OE powertrain accounts for 17% of Group sales

1 Not included in Total Global Content per VehicleSource: Merrill Lynch

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Powertrain Market Opportunity

% outsourced in 2002 20%Only

% outsourcing potential higher compared tonext largest content area – body / structural

49%higher

% higher than average component content of $743 270%

higher

Source: Merrill Lynch

Content per vehicle = $2,750

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A Wide Range of Powertrain Products

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Why We Like Powertrain

1

2

3

4

5

Evolving market

Highest value segment in vehicle

Largest and fastest growing segment in vehicle

Supplier technology is embraced

Differentiated technology is rewarded

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Agenda

• Powertrain Overview



• Systems Update

• Summary

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New Product Launches On Track

Precision Metal Components Engineered Products II

Significant increase in manufacturing space

9


Stackpole’s New Facilities

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New Business Highlights

• > C$ 223m in new business

• > C$ 79m in near-booked business

• > C$ 140m in business under development

• C$ 48m contract in China/Korea

Variable valve timingcomponents

4 wheel drive carriers& components

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Component to Module Migration – Carriers

Carrier component

$3

Multi-piece carrier

$20

Carrier assembly

$100

Providing customer solutions

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Stackpole Component to System Migration

2001 2008

43%43%

57%57%

SystemsSystems

ComponentsComponents

SystemsSystems

ComponentsComponents

19%19%

81%81%

13


Long Term Sales Outlook

Calendar Year

$C (‘000)

0

100,000

200,000

300,000

400,000

500,000

600,000

2004 2005 2006 2007 2008 2009

700,000

CurrentCurrentCurrent

New BookedNew BookedNew Booked

Plan

15% CAGR

Near BookedNear BookedNear Booked

In DevelopmentIn DevelopmentIn Development

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Agenda




• Systems Update

• Summary

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What is Driving Market Development?

• OEMs– cost reduction– product differentiation– risk sharing

• Legislation– fuel economy– reduce vehicle emissions– vehicle safety

$0

$15

$30

$45

‘95 ‘98 ‘00 ‘02 Jan‘03

Mar‘03

Jun‘03

Sep‘03

Dec‘03

Jan‘04

Mar‘04

Jun‘04

Sep‘04

US$ bbl• Consumer– fuel economy– improve performance– enhance feature level– reduce noise– vehicle safety

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Drivers: OEMs – Why Outsource PT Content?

Fixed cost reduction– Development costs– Manufacturing investment and labour

Variable cost reduction– Optimised designs for systems by specialist suppliers– Encourage supplier efficiency through Lean Manufacturing– Suppliers can apply parts/technology and plant

not just across platforms but across OEs

Risk sharing/reduction– Utilise supplier investment and capacity,

reducing volume risk exposure for the OE

Powertrain development costs must be better managed

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Driving Forces: Legislation

Example: Passenger Cars

MarketMarket LegislationLegislation DateDate CommentComment

Tier 2,bin 1-10 2004-09

Major challenge for diesel engine particularlyOxicat, Particulate and NOx aftertreatment Supplementary driving cycles including Aircon cycle

U.S.Federal

Cafe 2004-09 Applies to light trucks 20.7 to 22.2 mpg (U.S.)

LEV1 & ULEV1 2001-06 Emissions

LEVII, ULEV &SULEV 2004-09 Emissions

U.S.California

Possible CO2 ? In discussion/dispute with OEs

Euro V 2010? Emissions

CO2 2008 140gm/km fleet averageEuropePedestrianImpact? 2010? Underbonnet package smoothing and softening

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Impact on Engines

• Diesel Engine penetration continues to rise in Europe– Driven by running costs: better consumption, lower cost/litre– U.S. is still a long shot, but more likely now than ever before

1996 1997 1998 1999 2000 2001 2002 20030

1,000

2,000

3,000

4,000

5,000

6,000

7,000

OtherBelgiumUK

Spain

Italy

Germany

France

Car Sales (000’s)Diesel Car Sales – Western Europe

Source : Jato Dynamics/ Ricardo

Gates’ EMD, Smartdrive/TSAD etc apply to diesel engines too!

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Impact on Engines

SmartdriveTM

• Low Friction Engines– Two approaches:

• “Internal” friction reduction • Action to reduce parasitic loss from auxiliaries

• Combustion Improvement and Variable Displacement

– Both initiatives centre around variable valve timing/lift devices

• Aftertreatment– Especially for diesels

• Hybrids– Multiple technologies “in-play” – Issues with weight, cost and efficiency

still require better solutions

Confirms areas of current activity, pointers for more!

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Impact on Transmissions

Automatic transmissions• Europe: conventional technology too

inefficient for huge growth

• CVTs typically compromise driveability

• Dual Clutch Transmissions (DCT) offer best of both worlds:

– excellent driveability– better than manual fuel consumption– excellent performance

• USA: conventional auto will persist but with more 5 or 6 speed units

– Stackpole supplies the pump for the latest 6 speed unit shared between GM and Ford

Oil PumpOil Pump

DCT’s require high pressure oil pumps – Gates/Stackpole opportunity

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Capitalising on the Trends

• Gates technology– “SmartdriveTM” all belt solution– TSAD – geared hub

• Subject to customer pull

• Full launch in ‘05

• Fuel saving: 2% - 6%

• Complementary to Stop-Start

• Significant “value per engine”

Two-speed auxiliary drives

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• Traditional engine oil pumps oversized

• Our technology matches delivery with demand– Reduces parasitic loss – Improves fuel consumption

• Already used in auto transmissions

• Market demand proven

• New application– DCT transmissions

Variable displacement oil pumps

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Belts vs. Chains

0 2000 4000 6000Engine Speed [rpm]

0

0.1

0.2

0.3

Friction loss band fortiming belt drives

Friction loss bandfor chain drives

Lower Friction Loss• Growing recognition by OEs of the friction loss advantage of timing belt drives

• Fuel consumption benefit: 1%-4%

• One major OE has a high priority programme to investigate further

Source: FEV

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New Technologies

• Several IPR opportunities:– VVT– Hybrids– NVH devices – Electronic enhancements to

existing technologies

Gatescouplings

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Asymmetric Tensioners

• Cost saving opportunities

• Unique technology, tiny package

• Reduced belt tension– improves fuel consumption

• Customers:– Mazda (Japan) – in production– PSA (Europe) – in production– Several others in development

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Exploiting Technology Assets

Globalisation of Regional Strengths

• Exploiting Gates strength in Europe to market proven Stackpole technology– European OE customers interested

in oil pumps from Gates– Stackpole designs for both engine and

transmission applications– Manufacture in Gates European facilities– Initial programmes commencing– Start of production anticipated in 2008– 3 opportunities

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Agenda




• Systems Update

• Summary

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Key New Product: Electro-Mechanical Drive™

• PSA launches in Europe on the Citroën C3– Only available in France at first– Gates anticipates Europe wide availability after success in France– Very high impact launch, very positive initial market reaction

Fuel savings generated every time the vehicle stops for > 3 seconds

5.0

5.5

6.0

6.5

Manual Transmission Automated ManualTransmission

Automated manual trans.With Stop & Start

Saving FuelGasoline usage in a 1.4l Citroen C3

with 3 different powertrains

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Key New Product: Electro-Mechanical Drive™

• Several other opportunities in development – 4 in Europe, 2 in Asia and 1 in North America– Regular launches expected over coming years– An excellent customer acceptability rating is expected– Volumes will grow dramatically as customer acceptance is

established and more applications become available– Diesel applications are also in progress

High growth potential

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Key New Product: GEM 10® Update

• 1st GEM 10® Customer Development Programme– SOP mid-2006– €13m in 2007– Belt driven application includes

oil and water pumps

• GEM solutions now availablefor entire range of options

• “Modulette”– Spin off from module studies

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Agenda




• Systems Update

• Summary

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Summary

• High potential market

• Investing for future growth

• Inevitability of outsourcing

• Responding innovatively to capitalise on trends

• Strong product pipeline

• Moving up the value chain

Dave Carroll & Roger Stone Capital Markets Day 2004


Dave Carroll & Roger Stone Capital Markets Day 2004...

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Transcript of Dave Carroll & Roger Stone Capital Markets Day 2004...