Innovation in rotation HOW TO REACH STRATEGIC POSITION WITH YOUR CUSTOMERS case: Iskra Avtoelektrika d.d. Ljubljana, February 2007

Iskra Avtoelektrika Group Innovation in rotation

HOW TO REACH STRATEGIC POSITION WITH YOUR CUSTOMERS

case: Iskra Avtoelektrika d.d.

HOW TO REACH STRATEGIC POSITION WITH YOUR CUSTOMERS

case: Iskra Avtoelektrika d.d.

Ljubljana, February 2007

2006 2

Iskra Avtoelektrika Group

AGENDA:AGENDA:

1.1. BASIC INFORMATION ABOUT IBASIC INFORMATION ABOUT IAEAE

2.2. HOW TO REACH STRATEGIC POSITION WITH YOUR HOW TO REACH STRATEGIC POSITION WITH YOUR CUSTOMERSCUSTOMERS ? ?

1.1. FOCUSING ON KEY CUSTOMERSFOCUSING ON KEY CUSTOMERS

2.2. 4 P4 P’s’s

3.3. CASECASE AGCO & GLOBALIZA AGCO & GLOBALIZATION OFTION OF IAE IAE

AGENDA:AGENDA:




2.2. 4 P4 P’s’s


2006 3


Šempeter pri Gorici

Iskra Avtoelektrika Plant in ŠempeterIskra Avtoelektrika Plant in Šempeter

Iskra Avtoelektrika d.d.SI-5290 Šempeter pri Gorici

Polje 15

SLOVENIA

Phone: +386 5 33 93 000

Fax: +386 5 33 93 801

E-mail: [email protected]

http://www.iskra-ae.com

2006 4


STARTER MOTORS STARTER MOTORS

& &

ALTERNATORSALTERNATORS

for the Automotive & for the Automotive & Industrial Vehicle Industrial Vehicle

IndustriesIndustries

for the Automotive & for the Automotive & Industrial Vehicle Industrial Vehicle

IndustriesIndustries

SBU AUTOMOTIVE - productsSBU AUTOMOTIVE - products

2006 5


BLPM MOTORSBLPM MOTORS

AUTOMOTIVE AUTOMOTIVE APPLICATIONAPPLICATION

CONTROLLERSCONTROLLERS

AC MOTORSAC MOTORS

SOLENOID SOLENOID SWITCHESSWITCHES

COMMUTATOR COMMUTATOR MOTORSMOTORS

SBU DRIVE SYSTEMS - productsSBU DRIVE SYSTEMS - products

2006 6


Cold forged Cold forged metal partsmetal parts AssembiliesAssembilies

SBU COMPONENTS - productsSBU COMPONENTS - products

2006 7


Corporation profileCorporation profile

Establishment 1960

R&D Activity Registration 1986

Certificate ISO 9001 1990

Privatisation Completed 1997

Joint Stock Company Establishment 1991

Certificate QS-9000 2000

Data for 2006

Number of Employees 2.569

Exports of Turnover 95% Revenue 198.000.000 EUR

Slovenian Business Excellence Award 2000

Certificate ISO 14001 2003

Certificate ISO/TS 16949 2006

2006 8


Consolidated Sales in EURConsolidated Sales in EUR

126,6126,6

166,8166,8

150,8150,8138,8138,8

198198

220220

2006 9


Sales Structure by countriesSales Structure by countries

27%

16%14%

11%

7%

2% 3%1%

19%

0

10

20

30

GERMANY USA ITALY

FRANCE UNITED KINGDOM NETHERLANDS

FINLAND SLOVENIA OTHERS

2006 10


Sales Structure by productsSales Structure by products

2006 11


AGENDA:AGENDA:




2.2. 4 P4 P’s’s


AGENDA:AGENDA:




2.2. 4 P4 P’s’s


2006 12


DEFINE MARKET NICHES WHERE YOU CAN BE SUCCESFULL

DEFINE MARKET NICHES WHERE YOU CAN BE SUCCESFULL

•MARKETMARKET ANAL ANALYSISYSIS

•SWOT ANALSWOT ANALYSISYSIS

•PORTERPORTER FIVE FORCES FIVE FORCES MODEL MODEL

•BENCHMARKINGBENCHMARKING

•BCG MATRIBCG MATRIXX

2006 13


EXTERNAL ENVIRONMENTEXTERNAL ENVIRONMENT

DEMOGRAPHICSTECHNOLOGYINNOVATIONS

ECONOMICTRENDS

REGULATORYISSUES

SOCIALCHANGES

ECOLOGICALCONCERNS

COMPETITION

2006 14


MARKET REQUIREMENTSMARKET REQUIREMENTS

QUALITY

TIME TO SUPPLY

PRICES, COSTS

FLEXIBILITYRELIABILITY

TIME TO MARKET

LIFE CYCLE

QUANTITY

2006 15


Iskra Avtoelektrika

is a global supplier of starter motors and generators for internal combustion engines, battery powered DC drive

systems and other sophisticated components for the automotive industry such as ignition coils, light alloy

pressure die castings and plastic and steel cold-forged components. Complementing this programme, we develop

our own technology, and we produce tooling and special purpose equipment.

Iskra Avtoelektrika

develops, manufactures and sells on a global basis, with its own manufacturing and distribution network, which, besides providing support to our industrial customers, also offers a

broad range of aftermarket products.

Iskra Avtoelektrika

is known for the innovation and high quality of its products, its excellence in business and the strong marketing and development support, which offers to its

customers. This recognition is based on the high degree of competence of Iskra

people and the flexibility of our processes.

Mission StatementMission Statement

2006 16


IskraA v t o e l e k t r i k a

c r e a t e s s u s t a i n a b l e

development and wants to be

among the leading world suppliers

of starter motors and generators

and battery powered DC electric

drive systems, actuators and

components in its selected

market segments.

VisionVision

2006 17


72727272

69696969

41414141

44444444

27272727

27272727

20202020

25252525

18181818

12121212

3333

8888

0000

6666

AUTOMAKERS SEEK IN AUTOMAKERS SEEK IN SUPPLIERSSUPPLIERSAUTOMAKERS SEEK IN AUTOMAKERS SEEK IN SUPPLIERSSUPPLIERS

LOW COST/PRICELOW COST/PRICE LOW COST/PRICELOW COST/PRICE

QUALITYQUALITYQUALITYQUALITY

TIMELY DELIVERYTIMELY DELIVERYTIMELY DELIVERYTIMELY DELIVERY

INNOVATIVE TECHNOLOGYINNOVATIVE TECHNOLOGYINNOVATIVE TECHNOLOGYINNOVATIVE TECHNOLOGY

ENGINEERING SUPPORTENGINEERING SUPPORTENGINEERING SUPPORTENGINEERING SUPPORT

RELIABILITYRELIABILITYRELIABILITYRELIABILITY

HONESTY/INTEGRITYHONESTY/INTEGRITYHONESTY/INTEGRITYHONESTY/INTEGRITY

20%20%20%20% 40%40%40%40% 60%60%60%60% 80%80%80%80%0%0%0%0%

Source: DuPont Automotive Survey Results 2001Source: DuPont Automotive Survey Results 2001Source: DuPont Automotive Survey Results 2001Source: DuPont Automotive Survey Results 2001Legend: 2000, 2001Legend: 2000, 2001Legend: 2000, 2001Legend: 2000, 2001

2006 18


WHAT’S IMPORTANT TO OUR WHAT’S IMPORTANT TO OUR CUSTOMERS?CUSTOMERS?WHAT’S IMPORTANT TO OUR WHAT’S IMPORTANT TO OUR CUSTOMERS?CUSTOMERS?

PRODUCT QUALITYPRODUCT QUALITYPRODUCT QUALITYPRODUCT QUALITY

3,03,03,03,0 3,53,53,53,5 4,04,04,04,0 4,54,54,54,5 5,0%5,0%5,0%5,0%

ON TIME DELIVERIESON TIME DELIVERIESON TIME DELIVERIESON TIME DELIVERIES

CLAIM SOLVINGCLAIM SOLVINGCLAIM SOLVINGCLAIM SOLVING

R & D SUPPORTR & D SUPPORTR & D SUPPORTR & D SUPPORT

KEY PERSONNEL KEY PERSONNEL AVAILABILITYAVAILABILITY

KEY PERSONNEL KEY PERSONNEL AVAILABILITYAVAILABILITY

R & D TEST REPORTSR & D TEST REPORTSR & D TEST REPORTSR & D TEST REPORTS

TECHNOLOGY LEVELTECHNOLOGY LEVELTECHNOLOGY LEVELTECHNOLOGY LEVEL

AFTERSALES SERVICEAFTERSALES SERVICEAFTERSALES SERVICEAFTERSALES SERVICE

4,7%

4,6%

4,5%

4,2%

4,2%

4,1%

4,1%

PRODUCT RANGEPRODUCT RANGEPRODUCT RANGEPRODUCT RANGE 4,0%

4,3%

IT SUPPORTIT SUPPORTIT SUPPORTIT SUPPORT 3,9%

AutomotiveAutomotiveAutomotiveAutomotive

2006 19


CORPORATE STRATEGYCORPORATE STRATEGY

11PROFITABLE GROWTH ANDPROFITABLE GROWTH ANDFINANCIAL STRENGTH STRATEGYFINANCIAL STRENGTH STRATEGY

22CUSTOMER RELATION FOCUSEDCUSTOMER RELATION FOCUSEDSTRATEGYSTRATEGY

33GLOBAL MANUFACTURING ANDGLOBAL MANUFACTURING ANDSOURCING STRATEGYSOURCING STRATEGY

44INNOVATION AND INTELLECTUALINNOVATION AND INTELLECTUALCAPITAL STRATEGYCAPITAL STRATEGY

55HUMAN RESOURCES MANAGEMENT ANDHUMAN RESOURCES MANAGEMENT ANDLEARNING STRATEGYLEARNING STRATEGY

2006 20


PROFITABLE GROWTH& FINANCIAL STRENGTH

STRATEGY

PROFITABLE GROWTH& FINANCIAL STRENGTH

STRATEGY

CUSTOMERRELATIONSHIP

MANAGEMENT STRATEGY

CUSTOMERRELATIONSHIP

MANAGEMENT STRATEGY

GLOBALMANUFACTURING &

PURCHASING STRATEGY

GLOBALMANUFACTURING &

PURCHASING STRATEGY

INNOVATION ANDINTELLECTUAL CAPITAL

STRATEGY

INNOVATION ANDINTELLECTUAL CAPITAL

STRATEGY

HUMAN RESOURCESMANAGEMENT AND

LEARNING STRATEGY

HUMAN RESOURCESMANAGEMENT AND

LEARNING STRATEGY

QUALITYQUALITYQUALITYQUALITY

RETURNRETURNON EQUITYON EQUITY

RETURNRETURNON EQUITYON EQUITY

QUALITYQUALITYMANAGEMENTMANAGEMENT

QUALITYQUALITYMANAGEMENTMANAGEMENT

INTELLECTUALINTELLECTUALCAPITALCAPITAL

INTELLECTUALINTELLECTUALCAPITALCAPITAL

CREATIVECREATIVECOLLABORATIONCOLLABORATION

CREATIVECREATIVECOLLABORATIONCOLLABORATION

COMPETENTCOMPETENTPEOPLEPEOPLE

COMPETENTCOMPETENTPEOPLEPEOPLE

CUSTOMERCUSTOMERSATISFACTIONSATISFACTION

CUSTOMERCUSTOMERSATISFACTIONSATISFACTION

RESPONSIVENESSRESPONSIVENESSRESPONSIVENESSRESPONSIVENESS

GLOBALGLOBALSOURCINGSOURCINGGLOBALGLOBAL

SOURCINGSOURCING

INNOVATIONINNOVATIONINNOVATIONINNOVATION

PROCESSPROCESSAPPROACHAPPROACHPROCESSPROCESS

APPROACHAPPROACH

CORPORATE STRATEGIC MAPCORPORATE STRATEGIC MAPCORPORATE STRATEGIC MAPCORPORATE STRATEGIC MAP

NEWNEWTECHNOLOGYTECHNOLOGY

NEWNEWTECHNOLOGYTECHNOLOGY

MANUFACTURINGMANUFACTURINGMANUFACTURINGMANUFACTURING

PROFITABLEPROFITABLEGROWTHGROWTH

PROFITABLEPROFITABLEGROWTHGROWTH

CUSTOMERCUSTOMERSUPPORTSUPPORT

CUSTOMERCUSTOMERSUPPORTSUPPORT

2006 21


AGENDA:AGENDA:




2.2. 4 P4 P’s’s


AGENDA:AGENDA:




2.2. 4 P4 P’s’s


2006 22


ON A GLOBAL ON A GLOBAL MARKET MARKET

PRODUCT AND PRODUCT AND PRICE ARE PRICE ARE

PRECONDITIOPRECONDITION FOR A N FOR A SUCCESSSUCCESS

SUPPLIERS

CHANNELS

PRODUCT

PROMOTION

PLA

CEM

EN

T

PR

ICE

CUSTOMERFOCUS

ANAYS

IS

ANAYS

IS

CONTRO

L

CONTRO

L

IMPL

EMEN

TATI

ON

IMPL

EMEN

TATI

ON

PLANNIN

G

PLANNIN

G

FOUR PFOUR PFOUR PFOUR P

COMPETITORS

SOCIETY

A KEY P IN AA KEY P IN A B B TO B TO B

EVIROMENT IS EVIROMENT IS THE THIRD THE THIRD

P - P - PLACEMENTPLACEMENT

IN CASE OFIN CASE OF IAE: IAE:

1. 1. THROUGH THROUGH FOLLOWING OF OUR FOLLOWING OF OUR KEY CUSTOMERS TO KEY CUSTOMERS TO THEIR KEY MARKETS THEIR KEY MARKETS

WORLDWIDEWORLDWIDE

2. 2. THROUGHTHROUGH OPTIMIZAOPTIMIZATION OF TION OF

SERVICE AND SERVICE AND DISTRIBUTION CHANELS DISTRIBUTION CHANELS FOR OUR CUSTOMERS FOR OUR CUSTOMERS

WORLDWIDEWORLDWIDE

2006 23


““MEET AND EXCEED CUSTOMER DEMANDS”...MEET AND EXCEED CUSTOMER DEMANDS”...

..... is already a used phrase. is already a used phrase..

BUT IT IS ALSO A GOOD WAY TO SECURE STRATEGIC BUT IT IS ALSO A GOOD WAY TO SECURE STRATEGIC POSITION WITH YOUR CUSTOMER, IF YOU MEAN ITPOSITION WITH YOUR CUSTOMER, IF YOU MEAN IT ! !

““MEET AND EXCEED CUSTOMER DEMANDS”...MEET AND EXCEED CUSTOMER DEMANDS”...

..... is already a used phrase. is already a used phrase..

BUT IT IS ALSO A GOOD WAY TO SECURE STRATEGIC BUT IT IS ALSO A GOOD WAY TO SECURE STRATEGIC POSITION WITH YOUR CUSTOMER, IF YOU MEAN ITPOSITION WITH YOUR CUSTOMER, IF YOU MEAN IT ! !

2006 24


AGENDA:AGENDA:




2.2. 4 P4 P’s’s


AGENDA:AGENDA:




2.2. 4 P4 P’s’s


2006 25


PARTNERSHIP WITH GLOBAL PLAYERPARTNERSHIP WITH GLOBAL PLAYER

Europe:Europe: Linnavuori, Finland Linnavuori, Finland Beauvois, France Beauvois, France Marktoberdorf, Germany Marktoberdorf, Germany North America:North America: Beloit, Kansas, USA Beloit, Kansas, USA Hesston, Kansas, USA Hesston, Kansas, USA Jackson, Jackson, Minnesota, USA Minnesota, USA Queretaro, Mexico Queretaro, Mexico South America: South America: Canoas, Rio Grande do Sul, Canoas, Rio Grande do Sul, Brazil Mogi das Brazil Mogi das Cruzes, Brazil Cruzes, Brazil Asia: Asia: Istanbul, TurkeyIstanbul, Turkey Tabriz, Iran Tabriz, Iran Lahore, Pakistan Lahore, Pakistan Chennay, India Chennay, India

Europe:Europe: Linnavuori, Finland Linnavuori, Finland Beauvois, France Beauvois, France Marktoberdorf, Germany Marktoberdorf, Germany North America:North America: Beloit, Kansas, USA Beloit, Kansas, USA Hesston, Kansas, USA Hesston, Kansas, USA Jackson, Jackson, Minnesota, USA Minnesota, USA Queretaro, Mexico Queretaro, Mexico South America: South America: Canoas, Rio Grande do Sul, Canoas, Rio Grande do Sul, Brazil Mogi das Brazil Mogi das Cruzes, Brazil Cruzes, Brazil Asia: Asia: Istanbul, TurkeyIstanbul, Turkey Tabriz, Iran Tabriz, Iran Lahore, Pakistan Lahore, Pakistan Chennay, India Chennay, India

AGCO AGCO CorporationCorporation

2006 26


AGCO & ISKRA AE WORLDWIDEAGCO & ISKRA AE WORLDWIDE

Brazil

China

Belarus

Iran

BiH

USA

UK

F

E

D

I

Russia

India

2006 27


GLOBALIZING BUSINESSGLOBALIZING BUSINESS

INCREASING GLOBALIZATION& COMPETITION

INCREASING GLOBALIZATION& COMPETITION

INCREASING POSSIBILITIES OFTHE INFORMATION TECHNOLOGYINCREASING POSSIBILITIES OF

THE INFORMATION TECHNOLOGY

TURBULENCEIN DEMAND

TURBULENCEIN DEMAND

INCREASED MOBILITY OF THE PEOPLE

INCREASED MOBILITY OF THE PEOPLE

SHORTER PRODUCT LIFE CYCLE& COMPLEXITY OF TECHNOLOGYSHORTER PRODUCT LIFE CYCLE& COMPLEXITY OF TECHNOLOGY

MERGERS, ACQUSITIONS,TAKEOVERS &

STRATEGIC ALLIANCES

MERGERS, ACQUSITIONS,TAKEOVERS &

STRATEGIC ALLIANCES

2006 28


WHY GLOBALIZAZION?WHY GLOBALIZAZION?

PARTNERSHIPS WITH THE GLOBAL PARTNERSHIPS WITH THE GLOBAL PLAYERSPLAYERS PARTNERSHIPS WITH THE GLOBAL PARTNERSHIPS WITH THE GLOBAL PLAYERSPLAYERS

GROUP SALES GROWTHGROUP SALES GROWTH GROUP SALES GROWTHGROUP SALES GROWTH

DIFFERENCES IN CULTURE AND LANGUAGEDIFFERENCES IN CULTURE AND LANGUAGE DIFFERENCES IN CULTURE AND LANGUAGEDIFFERENCES IN CULTURE AND LANGUAGE

DIFFERENCES IN SOCIAL CLIMATE (COSTS)DIFFERENCES IN SOCIAL CLIMATE (COSTS) DIFFERENCES IN SOCIAL CLIMATE (COSTS)DIFFERENCES IN SOCIAL CLIMATE (COSTS)

CURRENCY EXCHANGE RATE CURRENCY EXCHANGE RATE RISKSRISKS CURRENCY EXCHANGE RATE CURRENCY EXCHANGE RATE RISKSRISKS LOCAL LOCAL CUSTOMS AND TAX CUSTOMS AND TAX LEGISLATIONLEGISLATION LOCAL LOCAL CUSTOMS AND TAX CUSTOMS AND TAX LEGISLATIONLEGISLATION GOVERNMENT EXPORTS INCENTIVESGOVERNMENT EXPORTS INCENTIVES GOVERNMENT EXPORTS INCENTIVESGOVERNMENT EXPORTS INCENTIVES

2006 29


KEY PROCESSES DEFINITIONKEY PROCESSES DEFINITION

GLOBAL MARKETINGGLOBAL MARKETING GLOBAL MARKETINGGLOBAL MARKETING

CENTRALIZED RESEARCH & DEVELOPMENTCENTRALIZED RESEARCH & DEVELOPMENT CENTRALIZED RESEARCH & DEVELOPMENTCENTRALIZED RESEARCH & DEVELOPMENT

CENTRALIZED IT SYSTEMCENTRALIZED IT SYSTEM CENTRALIZED IT SYSTEMCENTRALIZED IT SYSTEM

GLOBAL PURCHASING GLOBAL PURCHASING - - SPECIALISPECIALIZINGZING GLOBAL PURCHASING GLOBAL PURCHASING - - SPECIALISPECIALIZINGZING

GLOBAL DISTRIBUTION & SERVICE GLOBAL DISTRIBUTION & SERVICE NETWORKNETWORK GLOBAL DISTRIBUTION & SERVICE GLOBAL DISTRIBUTION & SERVICE NETWORKNETWORK

GLOBAL MANUFACTURING GLOBAL MANUFACTURING - - SPECIALIZSPECIALIZINGING GLOBAL MANUFACTURING GLOBAL MANUFACTURING - - SPECIALIZSPECIALIZINGING

GLOBAL SALES FROM LOCAL PLANTSGLOBAL SALES FROM LOCAL PLANTS GLOBAL SALES FROM LOCAL PLANTSGLOBAL SALES FROM LOCAL PLANTS

2006 30


FORMS OF STRATEGIC COOPERATIONFORMS OF STRATEGIC COOPERATION

Financial Financial involvementinvolvement

HIGHHIGHLOWLOW

HIGHHIGH

JOINT JOINT

PURCHASINPURCHASINGG

Organisational Organisational

involvementinvolvement

LOWLOW

MANUFACTURINMANUFACTURINGG

AGREEMENTAGREEMENT

JOINT JOINT SELLINGSELLING

FRANCHISFRANCHISEE

LICENSEELICENSEE

JOINT JOINT

MARKETINMARKETINGG

AGENTAGENT DEALERDEALER

MERGER, MERGER, ACQUISITIONACQUISITION, TAKEOVER, , TAKEOVER,

JOINT JOINT VENTUREVENTURE

PARTICIPATION PARTICIPATION IN EQUITY IN EQUITY CAPITALCAPITAL

2006 31


IAE’s ROAD TO THE GLOBAL COMPANYIAE’s ROAD TO THE GLOBAL COMPANYC

om

ple

xit

yC

om

ple

xit

y

ACTIVEACTIVE

HIG

HH

IGH

EXPORT/IMPORT EXPORT/IMPORT DEPARTMENTDEPARTMENT

GLOBAL GLOBAL COMPANYCOMPANY

LO

WLO

W

Commitment of managementCommitment of managementPASSIVEPASSIVE

LICENCEESLICENCEES

FOREIGN FOREIGN SUBSIDIARIESSUBSIDIARIES

JOINT JOINT VENTURESVENTURES

INTERNATIONAL INTERNATIONAL STRATEGIC STRATEGIC

PARTNERSHIPSPARTNERSHIPS

2006 32


PRODUCTION FACILITIESPRODUCTION FACILITIES

Global support from local Global support from local facilitiesfacilities

PRODUCTION FACILITIESPRODUCTION FACILITIES

Global support from local Global support from local facilitiesfacilities

2006 33


1. ISKRA AVTOELEKTRIKA 1. ISKRA AVTOELEKTRIKA HEADQUARTERHEADQUARTER

1. ISKRA AVTOELEKTRIKA 1. ISKRA AVTOELEKTRIKA HEADQUARTERHEADQUARTER

Global support from local facilitiesGlobal support from local facilities

2006 34


33.. ISKRA AUTOELECTRIC IRANISKRA AUTOELECTRIC IRAN - - IAIIAIIAE OWNERSHIPIAE OWNERSHIP 90%90%PRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZD 1.1 kW UP TO 150.000 pcs/yearSTARTERS AZD 1.1 kW UP TO 150.000 pcs/year2.2. STARTERS AZE 0.8 kW UP TO 350.000 pcs/yearSTARTERS AZE 0.8 kW UP TO 350.000 pcs/year3.3. ALTERNATORS AAK IF UP TO 250.000 pcs/yearALTERNATORS AAK IF UP TO 250.000 pcs/year

33.. ISKRA AUTOELECTRIC IRANISKRA AUTOELECTRIC IRAN - - IAIIAIIAE OWNERSHIPIAE OWNERSHIP 90%90%PRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZD 1.1 kW UP TO 150.000 pcs/yearSTARTERS AZD 1.1 kW UP TO 150.000 pcs/year2.2. STARTERS AZE 0.8 kW UP TO 350.000 pcs/yearSTARTERS AZE 0.8 kW UP TO 350.000 pcs/year3.3. ALTERNATORS AAK IF UP TO 250.000 pcs/yearALTERNATORS AAK IF UP TO 250.000 pcs/year

Iskra AutoelectricIskra Autoelectric Iran Iran LtdLtd

2006 35


22.. ISKRA ISKRA SUZHOU AUTOELECTRIC Co.SUZHOU AUTOELECTRIC Co.,, Ltd.Ltd. CHINA CHINAIAE OWNERSHIPIAE OWNERSHIP 880%0%PRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZF 4 STARTERS AZF 4 5,5 kW 5,5 kW -- 250.000 pcs/year 250.000 pcs/year2.2. ALTERNATORS AAT ALTERNATORS AAT -- 30.000 pcs/year 30.000 pcs/year3.3. STARTERS AZSTARTERS AZDD--TTRR1.1.Kw1.1.Kw - 5- 500.000 pcs/year00.000 pcs/year4.4. ALTERNATORS AAK - 200.000pcs/yearALTERNATORS AAK - 200.000pcs/year5.5. DC MOTORS AMJ – 150.000PCS/yearDC MOTORS AMJ – 150.000PCS/year

22.. ISKRA ISKRA SUZHOU AUTOELECTRIC Co.SUZHOU AUTOELECTRIC Co.,, Ltd.Ltd. CHINA CHINAIAE OWNERSHIPIAE OWNERSHIP 880%0%PRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZF 4 STARTERS AZF 4 5,5 kW 5,5 kW -- 250.000 pcs/year 250.000 pcs/year2.2. ALTERNATORS AAT ALTERNATORS AAT -- 30.000 pcs/year 30.000 pcs/year3.3. STARTERS AZSTARTERS AZDD--TTRR1.1.Kw1.1.Kw - 5- 500.000 pcs/year00.000 pcs/year4.4. ALTERNATORS AAK - 200.000pcs/yearALTERNATORS AAK - 200.000pcs/year5.5. DC MOTORS AMJ – 150.000PCS/yearDC MOTORS AMJ – 150.000PCS/year

Iskra Suzhou Ltd.Iskra Suzhou Ltd.

2006 36


Iskra Avtoelektrika d.d. 33.. FAWER FAWER - ISKRA - ISKRA CO.CO., CHINA, CHINA - FIC - FICIAE OWNERSHIPIAE OWNERSHIP 440%0%PRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZF 4 STARTERS AZF 4 5,5 kW UP TO 250.000 pcs/year 5,5 kW UP TO 250.000 pcs/year

33.. FAWER FAWER - ISKRA - ISKRA CO.CO., CHINA, CHINA - FIC - FICIAE OWNERSHIPIAE OWNERSHIP 440%0%PRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZF 4 STARTERS AZF 4 5,5 kW UP TO 250.000 pcs/year 5,5 kW UP TO 250.000 pcs/year

Changchun Fawer Iskra Changchun Fawer Iskra Ltd.Ltd.

2006 37


4. 4. ISKRA DO BRASIL Autoelectrica, ISKRA DO BRASIL Autoelectrica, BRASILBRASIL

4. 4. ISKRA DO BRASIL Autoelectrica, ISKRA DO BRASIL Autoelectrica, BRASILBRASILPRODUCTION PROGRAMPRODUCTION PROGRAM

1.1. STARTERS AZE-TR UP TO 100.000 pcs/yearSTARTERS AZE-TR UP TO 100.000 pcs/year2.2. ALTERNATORS AAK UP TO 100.000 pcs/yearALTERNATORS AAK UP TO 100.000 pcs/year

Iskra do Brasil AutoelIskra do Brasil Autoelééctrica ctrica LtdaLtda

2006 38


5. 5. IskRaIskRa, Grodno –, Grodno – BELARUS BELARUSIAE OWNERSHIPIAE OWNERSHIP 98.5%98.5%

PRODUCTION PROGRAMPRODUCTION PROGRAM1.1. STARTERS AZJ – STARTERS AZJ – 10100.000 pcs/year0.000 pcs/year

5. 5. IskRaIskRa, Grodno –, Grodno – BELARUS BELARUSIAE OWNERSHIPIAE OWNERSHIP 98.5%98.5%

PRODUCTION PROGRAMPRODUCTION PROGRAM1.1. STARTERS AZJ – STARTERS AZJ – 10100.000 pcs/year0.000 pcs/year

IskRa o.o.o.IskRa o.o.o.

2006 39


6. PRAMO ISKRA, RZEV –6. PRAMO ISKRA, RZEV – RUS RUSSIASIAIAE OWNERSHIPIAE OWNERSHIP 94%94%

PRODUCTION PROGRAMPRODUCTION PROGRAM1.1. STARTERS AZSTARTERS AZDD – UP TO – UP TO 1150.000 pcs/year50.000 pcs/year

2.2. STARTERS AZSTARTERS AZEE – UP TO – UP TO 10100.000 pcs/year0.000 pcs/year

6. PRAMO ISKRA, RZEV –6. PRAMO ISKRA, RZEV – RUS RUSSIASIAIAE OWNERSHIPIAE OWNERSHIP 94%94%

PRODUCTION PROGRAMPRODUCTION PROGRAM1.1. STARTERS AZSTARTERS AZDD – UP TO – UP TO 1150.000 pcs/year50.000 pcs/year

2.2. STARTERS AZSTARTERS AZEE – UP TO – UP TO 10100.000 pcs/year0.000 pcs/year

Pramo IskraPramo Iskra

2006 40


77. ISKRA AE KOMPONENTE. ISKRA AE KOMPONENTE - IAK - IAK Bosnia and Hercegovina Bosnia and HercegovinaIAE OWNERSHIPIAE OWNERSHIP 95%95%

PRODUCTION PROGRAMPRODUCTION PROGRAM1.1. VARIOUS COMPONENTS WITH MANUAL WORK OPERATIONSVARIOUS COMPONENTS WITH MANUAL WORK OPERATIONS

2.2. STAMPED METAL PARTSSTAMPED METAL PARTS

3.3. SUBASSEMBLIESSUBASSEMBLIES

77. ISKRA AE KOMPONENTE. ISKRA AE KOMPONENTE - IAK - IAK Bosnia and Hercegovina Bosnia and HercegovinaIAE OWNERSHIPIAE OWNERSHIP 95%95%

PRODUCTION PROGRAMPRODUCTION PROGRAM1.1. VARIOUS COMPONENTS WITH MANUAL WORK OPERATIONSVARIOUS COMPONENTS WITH MANUAL WORK OPERATIONS

2.2. STAMPED METAL PARTSSTAMPED METAL PARTS

3.3. SUBASSEMBLIESSUBASSEMBLIES

Iskra AE Komponente Iskra AE Komponente d.o.o.d.o.o.

2006 41


GLOBAL LOGISTIC STREAMSGLOBAL LOGISTIC STREAMS

CHINA

BRAZIL

USAIRAN

BELARUS

2006 42


CRITICAL SUCCESS FACTORSCRITICAL SUCCESS FACTORS

MARKET RESEARCH AND ANALYSISMARKET RESEARCH AND ANALYSIS MARKET RESEARCH AND ANALYSISMARKET RESEARCH AND ANALYSIS

BUSINESS PARTNERS SELECTIONBUSINESS PARTNERS SELECTION BUSINESS PARTNERS SELECTIONBUSINESS PARTNERS SELECTION

COMMUNICATION & FAST COMMUNICATION & FAST IMPLEMENTATIONIMPLEMENTATION COMMUNICATION & FAST COMMUNICATION & FAST IMPLEMENTATIONIMPLEMENTATION

KEY PROCESSES DEFINITIONKEY PROCESSES DEFINITION KEY PROCESSES DEFINITIONKEY PROCESSES DEFINITION

PROJECT MANAGEMENT & TEAMPROJECT MANAGEMENT & TEAM PROJECT MANAGEMENT & TEAMPROJECT MANAGEMENT & TEAM

RESOURCES PROCUREMENTRESOURCES PROCUREMENT RESOURCES PROCUREMENTRESOURCES PROCUREMENT

CLEAR VISION STATEMENT & STRATEGYCLEAR VISION STATEMENT & STRATEGY CLEAR VISION STATEMENT & STRATEGYCLEAR VISION STATEMENT & STRATEGY

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Innovation in rotation HOW TO REACH STRATEGIC POSITION WITH YOUR CUSTOMERS case: Iskra Avtoelektrika d.d. Ljubljana, February 2007