1. 你好
nǐ hǎo
Sales of engineering services for the automotive sector in China.
Business case: Applus IDIADA
Manuel Quero
Manager, Business Development
February 2012

2. Business case: Applus IDIADA
01_ Short Corporate presentation
02_ OEMs Chinese market
03_ Applus IDIADA’s China implantation process
04_ Business in China
05_ 10 Keys to Success

3. Who we are & what we do
Applus IDIADA is an engineering partner to the automotive industry providing complete
solutions for product development projects worldwide
Our assets:
• Professional team Experience in
An international team of more than 1300 skilled management of
and experienced engineers and technical large projects
experts specializing in automotive product
development
• First class state-of-the-art testing facilities A
modern comprehensive proving ground and
Complete
leading-edge laboratories solutions
• International presence in 20 countries for automotive
Being close to our clients, to perform projects engineering
locally and better understand each market
requirements
• Innovation Know-how in all Testing and
major vehicle CAD & CAE tools
Continuously developing new services in a
functionalities
strategic, integrated and controlled manner

4. Main milestones in our history and shareholder structure
1971 - First steps of IDIADA as “Institute for Applied Automotive Research” at the
University of Catalonia (Higher Engineering School)
1990 - Spin-off from the University and creation of IDIADA as an independent
company belonging 100% to the Regional Government of Catalonia
1999 - Privatization and creation of IDIADA Automotive Technology SA belonging 80%
to Applus and 20% to the Regional Government of Catalonia
Regional Government
of Catalonia
80% 20%

5. Turnover evolution
(in millions of euros)
100
%
90
R: 11,7
G
80
CA 93,1
70
60 71,5
50 62,5
40 48,0
30
20
10
0
2005 2007 2009 2011
CAGR: Compound Annual Growth Rate

6. International presence
Italy Switzerland Germany 50 p. Czech Republic 100 p. Poland Russia Korea
Turin Geneva Ingolstadt Mlada Boleslav Poznan Nizhny Seoul
Munich Liberec Novgorod
Ilsfeld Hradec králové
Wolfsburg
UK
London Japan
Hinckley Tokyo
France
Paris
Mulhouse
USA
Detroit
China 40 p.
Shanghai
Spain 700 p. Beijing
Barcelona Chongqing
Headquarters & Technical Centre
Madrid
Granada
Taiwan
Mojacar
Lu Kang –
Vigo Taichung area
Thailand
Project Management Bangkok
Engineering
CAD / CAE
Testing
Homologation Brazil 180 p. Turkey Saudi Arabia India 70 p.p.
110 Malaysia
Sao Paulo Istanbul Riyadh New Delhi Kuala Lumpur
Facility Management
Curitiba Pune
Tatuí

7. IDIADA’s services
Engineering
Homologation
Proving ground testing
Testing facility design

8. Complete development projects
Development led by vehicle functionalities and performance
Comprehensive engineering capabilities for turnkey vehicle development projects
at international level: Concept, CAD, CAE and testing of all major vehicle
functionalities with unique in-house state-of-the-art facilities
Main Vehicle Functionalities
Passive Safety Active Safety Environment Comfort Reliability
Product Product
Concept Engineering Engineering
Styling & Package & Development Validation Homologation
Finding & Design Simulation
Feasibility Surfacing Test
Benchmarking (CAD) (CAE)

9. Engineering (1/7)
Passive Safety
Structural analysis / Restraint system integration / Occupant protection / Pedestrian protection

10. Engineering (2/7)
Active Safety
Advanced chassis evaluation techniques / Chassis tuning & system development / Brake system development

11. Engineering (3/7)
Powertrain
Integration / Engine calibration / CNG conversion / Alternative fuels / Anti-pollution systems

12. Engineering (4/7)
NVH
Interior noise tuning / Noise and vibration releases / Exterior noise / Vibration fatigue

13. Engineering (5/7)
Comfort
HVAC system development and validation / Thermal comfort

14. Engineering (6/7)
Reliability
Structural, Powertrain and general vehicle durability / Market driver assessment, road characterization and fleet validation

15. Engineering (7/7)
Electronics
ECU functional and fail-safe validation / SW&HW development support / On-board Networks definition & validation / EMC assessment
Break
ECU out box
(BOB)

16. Proving Ground
The most comprehensive independent proving ground

17. Homologation
Official homologation capabilities recognized in all markets worldwide

18. Testing Facility Design
Consulting services for complete project management of automotive testing
facilities, from feasibility studies to commissioning

19. Investments
Continuously investing in new testing facilities: average 8 M EUR per year
Approximate value of the existing testing facilities: 300 M EUR
Examples of some recent investments
• State-of-the-art Hemi-Anechoic Chamber for full NVH vehicle characterization
• Wet handling track that complements our capabilities in vehicle dynamic evaluation

20. Main strengths and advantages
Development Integration
• Project Management
• Integration of CAD, CAE and Testing
• Design led by functionality
• Thorough knowledge of all major vehicle functionalities
• Strong international presence

21. Business case: Applus IDIADA
01_ Short Corporate presentation
02_ OEMs Chinese market
03_ Applus IDIADA’s China implantation process
04_ Business in China
05_ 10 Keys to Success

22. OEMs Chinese Market
BHMC Brilliance
Great Wall Motor BBDC Brilliance BMW
BAIC Foton
HaFei
ZZN
Harbin
Changchun FAW
JAC
Beijing
Shenyang FAW-Mazda
NAW Iveco Baoding FAW-VW
Tianjing
NAW Fiat
Zhengzhou FAW Toyota
Hefei
NAC-MG Nanjing
Shanghai DY KIA
Chongqing Wuhan
CA Ford Mazda Hangzhou
Wuhu
SVW
Nanchang
Geely
Changan DFM Fuzhou BYD
Liuzhou
CA Suzuki DPCA Guangzhou
Geely-maple
SEM
DFM Honda SGM
Haikou
Chery SAIC
SAIC GM Wuling
GZ Toyota Jiangling-Ford
FAW Haima
DFM Nissan GZ Honda Changhe Suzuki

23. Business case: Applus IDIADA
01_ Short Corporate presentation
02_ OEMs Chinese market
03_ Applus IDIADA’s China implantation process
04_ Business in China
05_ 10 Keys to Success

24. Main milestones in China
2000 First projects in China (Homologation & Engineering)
2004 Establishment of a permanent base in Shanghai as a Representative Office
2006 Moving to bigger premises (400 sqm)
2007 Transformation of the Representative Office into a Limited company in China (WFOE)
2008 Moving to new facilities in Shanghai, Zhangjiang Hi-Tech Park (1.000 sqm)
2010 Opening of a Branch Office in Chongqing

25. Labor and office costs
LABOR COSTS
RANK RMB/YEAR (12 payments)
Shanghai KAM 200.000
Chongqing KAM 120.000 / 140.000
Senior Automotive ENGINEER 150.000
Civil SENIOR ENGINEER (on site) / Shanghai 180.000
Junior Automotive ENGINEER 90.000 / 120.000
OFFICE COSTS
M2 RMB/MONTH RMB/M2 monthly DESCRIPTION
70 20.000 285,71 Business Center in Shanghai (with furniture)
400 50.000 125,00 Business Center in Shanghai (without furniture)
1.000 80.000 80,00 Hi Tech Park PuDong
5.000 120.000 24,00 Industrial Area PuDong

26. Locations
Staff Total European Chinese
2006 4 1 3
2007 7 1 6
2008 12 2 10
2009 23 3 20
2010 26 3 23
2011 45 5 50
Locations
Beijin
g
Shanghai (main office, current location)
Chongqing (branch office)
Shanghai
Chongqing Beijing (branch office)
Guangzhou Guangzhou (office to be opened in 2012)
Shanghai Chongqing Beijing

27. IDIADA’s presence in China
Team in China
• 50 people, including 5 European Senior experts
What we do today
Homologation
Passive Safety
CAE
Vehicle dynamics
Project management
What we are developing
Durability, Brakes, Component testing
Complete vehicle testing
CAD / CAE
Offices in Shanghai, Beijing and Chongqing
Opening in Guangzhou 2012

28. New workshop space in Shanghai
• Space: up to 2.500 m2 workshop
• Operational during the first quarter 2012

29. Business case: Applus IDIADA
01_ Short Corporate presentation
02_ OEMs Chinese market
03_ Applus IDIADA’s China implantation process
04_ Business in China
05_ 10 Keys to Success

30. Aim
Doing business in China requires understanding the people, culture,
etiquette and approach to business
By acquiring cross cultural skills, international business people can
maximize their prospects of success in China
中國
Junģ gue

31. People's Republic of China – Brief
Area: 9,60 million km2
Population:1,345 B
Religion: 56 ethnic groups in China,
The Han people make up 92 percent
Languages: Chinese
Currency: RMB yuan
Capital City: Beijing
Main festivals: New Year's Day (January 1), the Spring Festival (the New Year's
Day by Chinese lunar calendar), International Labor Day (May 1), and the
National Day (October 1)

32. People's Republic of China - History & Environment
China is one of the world's oldest civilizations with a chronicled history of more
than 5,000 years
On 1 October 1949, established the People's Republic of China as a socialist
state
Located in East Asia, it is a single-party state governed by the Communist Party
of China
China has become the world's fastest growing major economy, the world's
largest exporter and second largest importer of goods
A member of multilateral organizations including the WTO, BRIC, G-20
China is a recognized nuclear weapons state and has the world's largest
standing army with the second-largest defense budget

33. People's Republic of China – Public Holiday
2011 / 2012 Major Public Holiday Calendar

34. Culture
Values
Trust / Mistrust
In business transactions, trust must be established before any serious business
relationship can be cemented
Face / Hierarchy
Face and hierarchy are closely related to the creation and development of the
business network
Time / Long Term Orientation
For Chinese, once a relation is established it is hard to break and once a relation
is broken, it is very difficult to reestablish

35. Culture
Business Culture
China's ethical system involves respect for superiors, duty to family, loyalty to
friends, sincerity and courtesy
Age brings increased respect and status
Handshaking is the accepted greeting, with a light handshake encouraged, lasting
as long as ten seconds
Chinese lower their eyes slightly as a sign of respect
Staring may make Chinese uncomfortable
It is very important for Chinese people to "maintaining face" in everything they do.
Therefore
• Never insult or openly criticize someone in front of others
• The relationship you develop with a person represents your relationship with
his or her entire company
• Gifts are important, although expensive gifts could be taken the wrong way

36. Culture
Business Culture
Do's
Be aware of all favors done for you and prepare to respond in kind
In China, business relationships are personal relationships; establish a trusting
personal relationship that demonstrates your respect
Business cards are important
Don'ts
• Avoid unintentional criticism of others
• Don't poke fun at someone, even if in fun

37. Chinese Etiquette and Customs
Meeting Etiquette
Address the person by a position title and their surname
Greetings are formal and the oldest person is always greeted first
Handshakes are the most common form of greeting with foreigners

38. Chinese Etiquette and Customs
Gift Giving Etiquette
• In general, it is always welcome by gifts given
• Do not give scissors, knives as they indicate the block of the relationship
• Do not give clocks, handkerchiefs as they are associated with death

39. Chinese Etiquette and Customs
Gift Giving Etiquette
Four is an unlucky number so do not give four of anything. Eight is the luckiest
number, so giving eight of something brings luck to the recipient
• Always present gifts with two hands
• Gifts are not opened when received
• Gifts may be refused three times before they are accepted

40. Chinese Etiquette and Customs
Dining Etiquette
The Chinese prefer to entertain in public places rather than in their homes,
especially when entertaining foreigners
If you are invited to their house, consider it a great honour.
Arrive on time
Remove your shoes before entering the house
Bring a small gift to the hostess
Eat well to demonstrate that you are enjoying the food!

41. Business Etiquette and Protocol in China
ationships & Communication
The Chinese don't like doing business with person they don't know
• Business relationships are built formally after the Chinese get to know you
• The Chinese see foreigners as representatives of their company rather than as
individuals

42. Business Etiquette and Protocol in China
ationships & Communication
Rank is extremely important in business relationships and you must keep rank
differences in mind when communicating
The Chinese prefer face-to-face meetings rather than written or telephonic
communication
Meals are not usually the place for business discussions, depends on the level of
confidence

43. Business Etiquette and Protocol in China
Business Meeting Etiquette
Meetings require patience. Mobile phones ring frequently and conversations tend
to be noisy. Never ask the Chinese to turn off their mobile phones as this causes
you both to lose the face
• Guests are generally escorted to their seats, which are in descending order of
rank. Senior people generally sit opposite senior people from the other side
•
• Only senior members of the negotiating team will speak. Designate the most
senior person in your group as your spokesman for the introductory functions

44. Business Etiquette and Protocol in China
Business Negotiation
• Only senior members of the negotiating team will speak. Designate the most
senior person in your group as your spokesman for the introductory functions
• Be prepared for the agenda to become a jumping off point for other discussions
Chinese are non-confrontational. They will not overtly say 'no', they will say 'they
will think about it' or 'they will see'
Chinese negotiations are process oriented. They want to determine if relationships
can develop to a stage where both parties are comfortable doing business with
the other
Decisions may take a long time, as they require careful review and consideration

45. Business Etiquette and Protocol in China
Business Negotiation
Do not use high-pressure tactics
Business is hierarchical. Decisions are unlikely to be made during the meetings
you attend
Your starting price should leave room for negotiation

46. Business Etiquette and Protocol in China
Business Cards
• Business cards are exchanged after the initial introduction
• Your business card should include your title
Hold the card in both hands when offering it, Chinese side facing the recipient
• Examine a business card before putting it on the table next to you or in a business
card case
• Never write on someone's card in front of the clients

47. Business Entertainment
Business Entertainment
Wait to be seated, as there is a seating etiquette based on hierarchy in Chinese
business culture
The host is the first person at the table allowed to begin eating and drinking. Then,
the rest of the company can proceed with the meal
• Business is usually not discussed during the meal
• It will be appreciated if you use chopsticks. When you are finished eating, place
your chopsticks on the table or a chopstick rest
• Toasting, usually with Chinese white wine, is an important part of Chinese
business etiquette. Toasts will be proposed throughout the meal. The popular toast
is “GanBei" ("bottoms up!")

48. Business Entertainment
pected topic of conversation
Popular Topics
Chinese scenery, landmarks
Weather, climate, and geography in China
Chinese art, antique
Food, shopping etc. in China
Your travels in other countries
Your positive experiences traveling in China
Topics to Avoid
Never use the terms such as 'Red China', 'Mainland China,' and 'Communist
China.' Just say 'China‘
Never say “Taiwan is an independent country"

49. Tips: How to Receiving Chinese Clients
Visit
• Pick up between Hotel and the company
• Souvenir is necessary
• Dinner is a plus
• Information about sightseeing and shopping is a plus
Medium Term Stay
• Pick up between Hotel and the company
• Supply the rice for lunch if necessary
• Enjoy the local attractive nightlife
• Leave some free time for sightseeing and shopping

50. Business case: Applus IDIADA
01_ Short Corporate presentation
02_ OEMs Chinese market
03_ Applus IDIADA’s China implantation process
04_ Business in China
05_ 10 Keys to Success

51. 10 Keys to Success
3. Understand the cultural gap
4. Be patient with the operation gap of the customer
5. Be patient with the skill gap of the customer
6. Be professional and flexible
7. Respect Chinese tradition
8. Understand the unclear explanations
9. Respect everybody you meet
10. Making friends prior doing business
11. Giving prior to gaining
12. Travel a lot around China

52. 非 常 感 谢 您 的 关 注
Thank you very much for your kind attention

53. Applus IDIADA Brazil Applus IDIADA Malaysia
T +603 9207 7018
T +55 11 4330 9880 e-mail: idiada_malaysia@idiada.com
e-mail: idiada_brasil@idiada.com
Applus IDIADA Poland
T +48 61 6226 905
Applus IDIADA China
e-mail: idiada_polska@idiada.com
T +86 (21) 6210 0894
e-mail: idiada_china@idiada.com
Applus IDIADA Russia
T +7 (831) 297 94 32
Applus IDIADA Czech Republic
e-mail: idiada_russia@idiada.com
T +420 493 654 811
e-mail: info@idiada.cz
Applus IDIADA Saudi Arabia
T +966 53 41 47 301
Applus IDIADA France
e-mail: idiada_GCC@idiada.com
T +33 (0) 1 41 14 60 85
e-mail: idiada_france@idiada.com
Applus IDIADA Switzerland
T +41 219 22 12 85
Applus IDIADA Germany
e-mail: idiada_switzerland@idiada.com
T +49 (0) 841 8 85 38 0 (Ingolstadt)
T +49 (0) 893 0 90 56 0 (München) T
+49 (0) 537 1 55 55 5 (Wolfsburg) T Applus IDIADA Taiwan
+49 (0) 173 6102083 (Ilsfeld)
T +886 4 7810702
e-mail: idiada_germany@idiada.com
e-mail: idiada_taiwan@idiada.com
Applus IDIADA India
For further information: Applus IDIADA Thailand
T +91 203 0556 900
T +66 86 7917071
e-mail: idiada_india@idiada.com
e-mail: idiada_thailand@idiada.com
Applus IDIADA
Applus IDIADA Italy
Applus IDIADA Turkey
Main Technical Centre T +39 011 3997 764
T +90 262 679 1370
e-mail: idiada_italia@idiada.com
L’Albornar – PO Box 20 e-mail: idiada_turkey@idiada.com
E-43710 Santa Oliva (Tarragona) Spain Applus IDIADA Japan
Applus IDIADA UK
T +81 (0) 42 512 8982
T +34 977 166 000 T +44 (0) 7 979 691 631
e-mail: idiada_japan@idiada.com
e-mail: idiada_uk@idiada.com
F +34 977 166 007
Applus IDIADA Korea
e-mail: idiada@idiada.com Applus IDIADA USA
T +82 31 478 1821
T +1 248 656 3469
e-mail: idiada@idiada.co.kr
e-mail: idiada_USA@idiada.com
www.idiada.com Applus IDIADA Madrid
Applus IDIADA Vigo
T +34 915 095 795
T +34 986 900 300
e-mail: idiada_madrid@idiada.com
e-mail: ctag_idiada@idiada.com