THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT INDUSTRY BELGIUM Fact Pack

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THE AUTOMOTIVE AND CONSTRUCTION EQUIPMENT
INDUSTRY BELGIUMFact Pack

• Swedish Trade Council in Belgium
• 2006

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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Belgian Construction Equipment Industry
• Recommendations
• References

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THE MANUFACTURING INDUSTRY IN BELGIUM HAS A
PRODUCTION VALUE (TURNOVER) OF 1749 BILLION SEK-
the automotive/transport industry is the fourth
largest
5 largest manufacturing industries in Belgium

• The total turnover of the Belgian manufacturing
  industry is SEK 1,749 billion
• the Swedish manufacturing industrys turnover is
  SEK 1,357 billion
• There are approximately 20,000 companies within
  the manufacturing industry in Belgium
• 582 738 employees

Billion SEK
The automotive industry amounts to 11 of the
total manufacturing industry
Includes cars, trucks, buses, ships, boats,
aerospace, bicycles, cycles
Source Federation of Belgian Enterprises
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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Passenger Cars
• Commercial Vehicles
• Suppliers
• Belgian Construction Equipment Industry
• Recommendations
• References

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IN 2005, ALMOST ONE MILLION CARS AND COMMERCIAL
VEHICLES WERE PRODUCED IN BELGIUM- a very large
majority were exported!
Production cars and commercial vehicles industry
in Belgium in units
Units in thousands
Commercial vehicles 3
Passenger cars 97
Source FEBIAC
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IN BELGIUM THERE ARE IN TOTAL FIVE MANUFACTURERS
OF PASSENGER CARS AND COMMERCIAL VEHICLES
VEHICLE MANUFACTURERS
COMMERCIAL VEHICLES (31,406 vehicles)
BUSES (1,040 vehicles)
HEAVY TRUCKS (30,366 vehicles)
PASSENGER CARS (895 109 vehicles)

• 1 manufacturer
• Van Hool (1,240)

• 1 manufacturer
• Volvo (30 377)

• 3 manufacturers
• Ford (incl. Volvo)
• (179 170 258 479)
• General Motors (Opel)
• (253,142)
• Volkswagen
• (204,402)

Ford used to be a large manufacturer of vans in
Belgium 2004 was the final year Ford
manufactured vans on Belgian soil
Source FEBIAC
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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Passenger Cars
• Commercial Vehicles
• Suppliers
• Belgian Construction Equipment Industry
• Recommendations
• References

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ON AGGREGATED LEVEL, THE CAR PRODUCTION IN
BELGIUM HAS RECOVERED AFTER THE DIP IN 2003- but
production of the Ford brand has continously
declined since 2001
Passenger Car Production in Belgium
Development the last 5 years

• On aggregated level the car production in Belgium
  has recovered after the dip in 2003
• The increase after 2003 was due mainly to Volvo
  but also to Volkswagen
• Ford (i.e. the brand Ford) has displayed a
  continous decline in production during tha past
  years

Vehicles
Source FEBIAC and STC interviews
9
THE PURCHASE DECISIONS ARE GENERALLY MADE OUTSIDE
OF BELGIUM- but certain minor decisions are
taken locally in Belgium
Passenger Cars
Source STC interviews
10
THERE ARE FOUR PASSENGER CAR MANUFACTURING PLANTS
IN BELGIUM- Ford/Volvos plant in Ghent is the
largest one
Gent (Volvo)
Antwerp (General Motors)
Genk (Ford)
Brussels (Volkswagen)
Source Febiac, STC interviews
11
THERE IS STRONG PRESSURE ON THE OEMS IN
BELGIUM- the government is aware of this and
works actively to stimulate the automotive sector
Trends within the Belgian passenger car industry

• Strong internal competition within OEMs of where
  to locate the manufacturing
• Each geographical unit must fight for its
  existence and display strong results including
  Belgian OEMs
• Tendency that non-complicated manufacturing
  modules leave Belgium whereas more complicated
  process are carried out in Belgium
• Belgian automotive actors realise that they face
  problems competing on price regarding
  non-complicated manufacturing
• Therefore the collaboration between government,
  universities and automotive players has augmented
  in order to increase competitive advantage for
  more complex processes and products

Globalization
Competition and price reductions

• Strong price pressure especially since Belgium
  does not have any own brands

• Tendency with more RD among (specialised)
  suppliers overall trend of closer collaboration
  with particularly T1 suppliers

RD-displacement
The Belgian government works very actively to
stimulate the automotive sector for instance it
has recently decreased the tax on shift work
Source STC interviews
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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Passenger Cars
• Commercial Vehicles
• Suppliers
• Belgian Construction Equipment Industry
• Recommendations
• References

13
THE TOTAL PRODUCTION OF COMMERCIAL VEHICLES
SHARPLY DECLINED BETWEEN 2003 AND 2004- due to
Ford vans/buses leaving the Belgium
Commercial Vehicle Production in Belgium
Development the last 5 years

• The decline for buses of vans is due to the fact
  that Ford closed its production (of vans and
  buses) in Belgium
• Production of the other manufacturers has been
  fairly stable throughout the past years

Vehicles
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BELGIAN VAN HOOL AND SWEDISH VOLVO ARE MAKING
MOST PURCHASE DECISIONS IN THEIR HOME COUNTRIES
Commercial vehicles
Source STC interviews
15
THE COMMERCIAL VEHICLE INDUSTRY IS CONCENTRATED
TO THE NORTH OF BELGIUM
Gent (Volvo)
Koningshooikt (Van Hool)
Bree (Van Hool)
Bold Head office
Source Febiac, STC interviews
16
THERE IS NO TENDENCY FOR COMMERCIAL VEHICLE OEMS
TO MOVE PRODUCTION OUTSIDE OF BELGIUM
Trends within the Belgian commercial vehicle
industry
Globalization

• No immediate tendency for Belgian OEMs to be
  re-located or to move production elsewhere high
  productivity, strong suppliers and for logistics
  advantageous geographical position are mentioned
  as main pros for Belgium

Competition and price reductions

• Strong competition and increasing pressure on
  margins however the quality aspect is very
  important as well

RD-displacement

• Slight tendency of more RD carried out by
  suppliers

Source STC interviews
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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Passenger Cars
• Commercial Vehicles
• Suppliers
• Belgian Construction Equipment Industry
• Recommendations
• References

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THERE ARE ABOUT 250 AUTOMOTIVE SUPPLIERS IN
BELGIUM
Geographical concentration of automotive
suppliers
Belgian automotive suppliers

• There are around 250 suppliers for the automotive
  industry in Belgium
• Most of the suppliers are fairly small with below
  40 employees
• Most suppliers are situated in the northern part
  of Belgium
• That is the centre of OEMs
• Flanders is the economically strongest part of
  Belgium (Wallonia is the southern part)
• Some internationally large companies (e.g. Delphi
  and Autoliv) not mentioned on next slide are
  active in Belgium, but focus their activities on
  just-in-time solutions for the OEM assembly lines
  rather than on manufacturing

Source STC interviews
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THE GROUP OF LEADING TIER 1 SUPPLIERS IN BELGIUM
CONSIST OF BOTH BELGIAN AND INTERNATIONAL
COMPANIES
Leading Suppliers
T1 SUPPLIERS

Electrical systems
Interior equipment
Propulsion
Body
Running gear

• Cables, bus systems, embedded systems
• Yazaki Europe
• Valeo Vision
• Bosch

• Power train, exhaust systems, engines
• Kautex Textron Benelux
• Bosal Benelux
• VCST
• Bosch

• Cockpit, seats, dash-board, air conditioning
• Johnson Controls
• Lear
• Punsch Plasttx
• Brose Gent
• Bosch
• De Witte Lietaer

• Body, roof, glass, doors, lighting etc.
• Bosch
• Valeo Vision
• AGC
• Saint Gobain Sekurit
• Punsch Plasttx
• VCST
• T1 Group Automotive System

• Suspension, brakes, axles, steering, tires
• T1 Group Automotive Systems
• Bosch

Source STC interviews, www.aiib.be
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PURCHASE DECISIONS ARE MOSTLY TAKEN AT HQ LEVEL



T1 Suppliers

Is also a Tier 2 supplier AW Europe is a
subsidiary of Japanese Aisin AW
Source STC interviews, www.aiib.be
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THE MAJORITY OF LEADING T1 SUPPLIERS IN BELGIUM
ARE LOCATED IN THE FLEMISH PART OF THE COUNTRY-
logically since that is where the OEMs are
situated
Gent (Brose) Gent (Johnson Controls)
Opglabbeek (Yazaki Europé)
Lauwe (De Witte Lietaer)
Tessenderlo (Kautex Textron Benelux)
Wervik (De Witte Lietaer)
Overpelt (Punsch Plasttx)
Hamont (Punsch Plasttx)
Genk (Lear)
Lummen (Bosal)
Meslin-LEveque (Valeo Vision)
Sint-Truiden (VCST)
Brussels (Bosch)

Beringen (T1 Group)
Sambreville (Saint Gobain)
Braine LAlleud (AW Europe)
Mons (AW Europe)
Seneffe (AGC)
Fleurus (AGC)
Bold Head office
Has production in Beringen, Lokeren, Wandre
Source STC interviews, www.aiib.be
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LEADING TIER 2 SUPPLIERS LOCATED IN BELGIUM
Leading Suppliers
T2 SUPPLIERS
Electrical systems
Interior equipment
Propulsion
Body
Running gear

• Cables, bus systems, embedded systems
• Aspel
• Bekaert
• Nitto Europe NV
• Tyco Electronics
• Waak Beschutte

• Power train, exhaust systems, engines
• Bekaert
• Saint Gobain
• NMC
• Donaldson
• Gates

• Cockpit, seats, dash-board, air conditioning
• Bekaert
• Nitto Europe NV
• Saint Gobain
• NMC
• Elco
• Libeltex

• Body, roof, glass, doors, lighting etc.
• Bekaert
• Nitto Europe NV
• Tyco Electronics
• Leraplast
• Saint Gobain
• Inalfa (Punsch)
• NMC
• Donaldson
• Gates

• Suspension, brakes, axles, steering, tires
• Bekaert

Decotrim Industries used to be a leading Tier 2
supplier in Belgium, but due to strategic
decision within the group the Belgian company
stopped their production in may 2006
Source STC interviews, www.aiib.be
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PURCHASE DECISIONS ARE GENERALLY TAKEN IN
BELGIUM- And often in collaboration with Tier 1
suppliers and OEMs 1(2)
T2 Suppliers
Source STC interviews, www.aiib.be
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PURCHASE DECISIONS ARE GENERALLY TAKEN IN
BELGIUM- And often in collaboration with Tier 1
suppliers and OEMs 2(2)
T2 Suppliers
Belongs to same group as Punsch Plasttx, who
is a Tier 1 supplier
Also a supplier to the construction equipment
sector
Source STC interviews, www.aiib.be
25
THE COMPETITION AND PRICE PRESSURE IS VERY TOUGH
FOR THE AUTOMOTIVE SUPPLIERS IN BELGIUM
Trends within the Belgian Automotive supplier
industry

• When OEMs move production to low-wage countries
  it is in many cases essential for suppliers to
  follow
• Requires high flexibility among suppliers and
  might mean losing business for suppliers unable
  to re-locate
• For suppliers staying in the country it puts high
  pressure of delivering high-quality products
  assuming that the prices offered are higher than
  in low-cost countries
• Several actors believe that the differences in
  quality will become smaller, leading to an even
  higher competition on price

Globalization
Competition and price reductions

• Extremely tough competition on price due to
  globalisation (see above), general over-capacity
  and strive for higher margins on end-products
  from the part of OEMs
• OEMs are hard on suppliers and do for instance
  no longer accept higher prices due to increased
  prices on raw material

RD-displacement

• Most RD carried out in-house but there are
  tendencies that some RD will be outsourced to
  technology centres in for instance India

Source STC interviews
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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Belgian Construction Equipment Industry
• Manufacturers
• Suppliers
• Recommendations
• References

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THE BELGIAN PRODUCTION OF CONSTRUCTION EQUIPMENT
TOTALS ABOUT 865 MILLION EURO- domestic sales is
a small part of the total turnover
Production construction equipment in Belgium
Billion SEK
Source Committee for European Construction
Equipment
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THERE ARE THREE MANUFACTURERS OF CONSTRUCTION
EQUIPMENT VEHICLES IN BELGIUM
CONSTRUCTION EQUIPMENT
EARTH MOVING (830 vehicles Caterpillars
production)
LIFTING (3,500 vehicles)
Excavators, wheel loaders
Telehandlers, boom lifts, scissor lifts

• 2 manufacturers
• Doosan/Daewoo
• Caterpillar

• 1 manufacturer
• JLG

• In addition to manufacturers, the following
  groups have headquarters (but no
• manufacturing) in Belgium
• Volvo Construction Equipment, World headquarters
• Kamatsu, European headquarters
• Hyundai Heavy Industries, European headquarters

Source STC interviews
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JLG ARE TAKING THEIR PURCHASE DECISIONS IN
BELGIUM- the decisions of the other OEMs are
mostly taken at HQ level outside Belgium


Caterpillar is by far the largest construction
equipment OEM in Belgium
Source Internet, STC
30
THE CONSTRUCTION EQUIPMENT OEMS ARE BASED IN THE
WALLONIAN (SOUTHERN) PART OF BELGIUM
Frameries (Doosan/Daewoo)
Maasmechelen (JLG)
Gosselies (Caterpillar)
Construction equipment OEMs in Belgium are
situated in the northern part of Wallonia
(Wallonia is the French-speaking southern part of
Belgium)
Source STC interviews
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CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Belgian Construction Equipment Industry
• Manufacturers
• Suppliers
• Recommendations
• References

32
IN BELGIUM THERE ARE FEW LARGE (SPECIALISED)
SUPPLIERS TO THE CONSTRUCTION EQUIPMENT SECTOR
T1 AND T2 SUPPLIERS
Electrical systems
Interior equipment
Propulsion
Body
Running gear

• Cables, bus systems, embedded systems
• Nexans
• EIA Electronics

• Power train, exhaust systems, engines
• Donaldson
• Gates
• Dana
• Bosal

• Cockpit, seats, dash-board, air conditioning etc.
• KAB Seating

• Body, roof, glass, doors, lighting etc.
• Carwall
• Stavelse
• Femstaal

• Suspension, brakes, axles, steering, tires
• Gates
• VCST

The market for supply to Construction Equipment
is fairly small in Belgium with a rather limited
number of relevant actors
Source STC interviews
33
MANY PURCHASE DECISIONS ARE TAKEN IN BELGIUM-
for several suppliers, construction equipment
OEMs are one of a number of target groups
T1 T2 Suppliers
Donaldson plans to stop manufacturing in Belgium
but to keep Leuven as European HQ Both
for cars and commercial vehicles and for
construction equipment
Source STC interviews
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THE BELGIAN SUPPLIERS TO CONSTRUCTION EQUIPMENT
ARE LOCATED MOSTLY IN THE NORTHERN PART OF THE
COUNTRY
Brügges (Dana)
Willebroek (Femstaal)
Beveren (Stavelse)
Aartselaar (EIA Electronics)
Erembodegem (Gates)
Leuven (Donaldson)
Buizingen (Nexans)
Lummen (Bosal)
Sint-Truiden (VCST)
Seneffe (KAB Seating)
Sombreffe (Carwall)
Bold Head office Bold italics European HQ
Source STC interviews
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THE CONSTRUCTION EQUIPMENT SECTOR IN BELGIUM
DISPLAYS SATISFACTORY MARGINS - and the demand
for products is strong
Trends within the Belgian Construction equipment
vehicles industry

• No major indications that manufacturing will be
  re-located
• Currently no trends of consolidation in the
  industry

Globalization

• A few years ago competition on price was fierce
  but today the competition is rather friendly
  and the margins are satisfactory
• Partly due to increasing demand of products
• Quality and service is at least as important as
  price

Competition and price reductions
RD-displacement

• RD is to a large extent carried out in-house at
  HQ

Source STC interviews
36
CONTENT

• Overview Belgian industry
• Belgian Automotive industry
• Recommendations
• References

37
RECOMMENDATIONS FOR MAKING BUSINESS WITH THE
BELGIAN AUTOMOTIVE INDUSTRY
Recommendations for making business with the
Belgian automotive industry
Country specific

• Belgians are easy to approach and appreciate a
  straight no-nonsense approach

1.
2.
A down-to-earth attitude should not be mixed up
with absence of hierarchies
3.
Important to respect agreements, delivery
deadlines and good business manner
Industry specific
Due to very strong competition and fast-paces
business, it is of vital importance to be
professional and communicate a strong and thought
-through proposal
Build upon relevant references and Swedens good
reputation
Indicate a long-term collaborative approach
Source STC
38
CONTENT

• Overview Belgian Manufacturing Industry
• Belgian Automotive Industry
• Belgian Construction Equipment Industry
• Recommendations
• References

39
HOW STC IN BRUSSELS CAN SUPPORT COMPANIES TO DO
BUSINESS IN BELGIUM AND LUXEMBOURG
Country specific
Market Check
Analysis of a general market or for a specific
product or segment. Competitors, demand,
structure, price levels, trends, business
opportunities etc.
Distribution/ Partner search
Partner search according to certain critera
set-up by client company. Full scanning of the
market. Often carried out in combination with
market check.
Customer Aquisition
STC identifies and contacts potential customers
in order to initiate business discussions
Pre Aquisition analysis
Analysis and scanning of potential acquisition
targets
Recruitment
Recruitment of for instance sales manager, shop
manager, technicians etc. according to the needs
of the client company
Company establishment
Administrative parts of set-up and registration
of company in Belgium including analysis of
most eligible kind of company
EU funding
Identification of funding opportunities within
the EU-administrations programmes and projects