Steering the Future with China: Nexteer Automotive MBS 2015

Laurent Bresson, President and Chief Operating Officer

How Nexteer came to be 1906 – Founded as Jackson, Church & Wilcox Co. in the U.S.

2009 – GM acquired

1999 – Delphi spun-off from GM as a publicly-held corporation

the steering operations from Delphi and renamed it Nexteer Automotive

The New Era 2010 – 2012:  AVIC Auto became the controlling

shareholder of Nexteer  Restructuring and operation

optimization

2013 onwards: 1998 – GM created Delphi Corporation, and its steering operations became a division under Delphi

2005 – Delphi filed for Chapter 11 bankruptcy protection

Solid foundation in technology, customer relationships and global presence

 Listed in Hong Kong in October 2013  Senior notes offering in November 2014  Further expansion in China and other

emerging markets

New shareholding

Successful IPO and future expansion

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Top independent steering & driveline supplier 

Global leading supplier in steering and driveline • •



Diverse and high quality customer base • •



The largest steering supplier in the United States Fifth largest steering and third largest halfshaft supplier globally

More than 50 OEM customers 10 of the world’s top 12 major OEMs

Global footprint • • • •

Global workforce of 12,000+ 20 manufacturing plants 10 customer service centers 5 regional application centers close to automotive markets

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Headquartered in Michigan  Long term commitment to Michigan • $400 million investment since 2010 • Workforce of 5,000 ►

~2,000 new jobs since 2010

 New Auburn Hills global headquarters • Opening in Q2 2016 • ~150 corporate jobs

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“China growing is good for the U.S.” – Henry Paulson, former U.S. Treasury Secretary

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AVIC – More than an owner; a partner in business success

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“The more ties and bonds the state has with other countries like China, the better.” – Governor Rick Snyder, Detroit Economic Club, July 21, 2014

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Aligning a common vision  Welcoming Chinese investment creates a “bridge” from the Great Wall to Detroit  One common vision is key • Leads to profitable growth • Creates a model global company  Patience, respect is vital  AVIC fully supports: • Additional resources that fuel R&D • Capital investment • Global business growth

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Recent business success Halfshaft

20%

12% 3% HPS

Column

$9B 65%

EPS

Business Backlog Enables Future Clarity 9

2014 business highlights Global Revenue (US$ mm)

+ 25%

• Operating efficiency • Cost competitiveness

3-year CAGR 10% 2,978 2,248

2,168

2011

2012

2,387

2013

 26 major programs launched  $250 million bond  Focused improvement

2014

 Chinese market growth  R&D investment • Stronger product, technology and quality leadership

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Continued commitment to R&D and investment R&D Expense

CAPEX

(US$ mm)

(US$ mm)

190 179

176

182

172

185

173

2012

2013

2014

67

2011

2012

2013

2014

2011

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Continued regional diversification and China growth Revenue by Region (US$ mm) 2,978 2,248

2011

2012 North America

2013 China

Europe

Full EPS portfolio in China



Recent program launches • • • •

2,387

2,168



2014 ROW

• • • •

BMW 1 Series Opel Corsa Peugeot 2008 SGMW Zhengcheng, Baojun 730 Fiat Doblo SGM Envision, ATS VW Golf Nissan Micra

* Including Brazil, India, Korea and Australia

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What is it like running a business together?

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Nexteer management operations and markets China

North America

Hong Kong listing 1316.HK

Europe

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International management team Laurent Bresson

Joseph Perkins

Mike Richardson

President Global COO

Senior VP CFO

Executive Director, Senior Vice President, Chief Strategy Officer and International Division COO

Frank Lubischer

Dennis Hoeg

Diane Fries

VP of Global Engineering Chief Technology Officer

VP, Enterprise Systems Manufacturing Engineering, Capital

VP of Quality

Douglas Owenby VP North America COO

Yi Fan Executive Director, Vice President and Joint Company Secretary

James Corbeil VP Chief Procurement Officer

Tao Liu

Mark Decker

VP China COO

VP Chief Human Resources Officer

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Global relationships  Communications • Differing preferences • Sensitivity to time zones and holidays

 Expectations • Speed of growth • Social agendas

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Growth opportunities in China

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New hometown player  Chinese owners make Nexteer a “hometown” player

China Revenue Growth (US$ mm)

468 168

182

2011

2012

262

2013

2014

 Brush EPS System created specifically for Chinese market • Lower cost, rugged design • Surpassed 1 millionth unit in less than 20 months

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Full range of EPS offerings in China Brush and Brushless Column – EPS

Rack – EPS

Single Pinion – EPS

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Chinese partnerships and operations growth

 Chongqing JV to expand in EPS market  New Suzhou tech center and third steering plant operational  Fourth steering plant – coming soon

 Focus is innovation and cost-effectiveness

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Creating value for stakeholders ~US $2.5B Dec. 31, 2014

Enterprise Value

~US $1.7B ~US $1.2B

Oct. 7, 2013 ~US $1.1B ~US $450M

Nov. 30, 2010

PCM China acquired Nexteer transaction value

Dec. 31, 2012

DCF method

Listing day price closed at HK$2.57

Dec. 31, 2013

Stock price closed at HK$4.43

Stock price closed at HK$6.64

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Roadmap for profitable growth  Leverage technology leadership

 Expand and diversify customer base  Exploit EPS expansion opportunities

 Target emerging market growth  Optimize cost structure

 Pursue select acquisitions and alliances

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Our relationship with the Chinese?

I would say we are ready to renew our vows.

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Steering the Future with China: Nexteer Automotive MBS 2015

Laurent Bresson, President and Chief Operating Officer