Description of Modine Manufacturing Co's Business Segments
Americas, Europe, and Asia Segments
The continued globalization of our OEM customer base requires us to manage
our strategic approach, product offerings and the competitive environment on
a global basis. This trend offers significant opportunities for us with our
market positioning, including our presence in key global markets (U.S., Europe,
Brazil, China, India, South Korea, Japan, and Mexico) and a global product-based
organization with the expertise to solve technical challenges. We are recognized
for having strong technical support, product breadth, and the ability to support
global standard designs for our customers.
Each of our main vehicular competitors, AKG Group, BorgWarner, Dana Corporation,
Delphi Corporation, Denso Corporation, Mahle Behr, Tata Toyo, TitanX, T. Rad
Co. Ltd., Valeo SA, Visteon Corporation, and Zhejiang Yinlun Machinery Co. Ltd.,
have a multi-regional or worldwide presence. Increasingly, we face heightened
competition as these competitors expand their product offerings and manufacturing
footprints through expansion into low-cost countries or low-cost sourcing initiatives.
In addition, competitors from some low-cost regions are beginning to expand
into new geographic OEM markets.
The Americas, Europe, and Asia segments represent our original equipment segments
and serve the commercial vehicle, automotive, and off-highway markets. In addition,
our Americas segment provides custom-designed heat exchangers, utilizing microchannel,
heat recovery, and round tube plate fin coils, to the commercial refrigeration,
residential heating, and commercial heating and air conditioning markets. The
Americas segment also serves Brazil’s automotive and commercial vehicle
aftermarkets. The following summarizes the primary markets served by our original
equipment segments:
Commercial Vehicle
Other trends influencing the commercial vehicle market include a call by global
commercial vehicle manufacturers to standardize U.S., Canadian, and Eurozone
emission regulations. Global standardization would likely lead to further consolidation
of our customer base and competitors, as they leverage higher volumes, consolidate
development costs, and rationalize distribution channels. Additionally, truck
manufacturers are evaluating alternative powertrains and fuels, electrification,
waste heat recovery, and other technologies aimed to improve vehicle efficiency,
all of which could present opportunities for us.
OEMs continue to expect greater supplier support and seek new technology solutions
at lower prices for their thermal management needs. In general, this creates
a challenge to us and the entire supply base, but also provides an opportunity
for suppliers, like Modine, who develop innovative solutions at a competitive
cost. Global standardization, fuel economy, and emissions regulations are driving
the advancement of product development worldwide and are creating demand for
incremental improvements to thermal transfer products that we are well positioned
to support.
Products – Powertrain cooling (engine cooling modules, radiators, charge
air coolers, condensers, oil coolers, fan shrouds, and surge tanks); on-engine
cooling (EGR coolers, engine oil coolers, fuel coolers, charge air coolers and
intake air coolers); and auxiliary coolers (transmission and retarder oil coolers
and power steering coolers).
Automotive
Market Overview – The global automotive market improved in most regions
during fiscal 2016. We expect this trend to continue in fiscal 2017, supported
by favorable oil prices and monetary policies. The automotive market is gradually
beginning to move away from traditional internal combustion engines towards
alternative powertrains, such as electric, hybrid, and fuel cell. This shift
is expected to increase the thermal management requirements for these vehicles,
and we are capitalizing on this trend by applying our base heat transfer components
to new applications. We expect our global automotive market production to increase
in fiscal 2017, with modest market improvements in North America and Europe
and stronger improvement in Asia.
Products – Powertrain cooling (engine cooling assemblies, radiators,
condensers and charge air coolers); auxiliary cooling (power steering coolers
and transmission oil coolers); component assemblies; radiators for special applications;
on-engine cooling (EGR coolers, engine oil coolers, fuel coolers, charge air
coolers and intake air coolers); and battery cooling (layered core battery chillers).
Off-Highway
Products – Powertrain cooling (engine cooling modules, radiators, condensers,
charge air coolers, fuel coolers and oil coolers); auxiliary coolers (power
steering coolers and transmission oil coolers); and on-engine cooling (EGR coolers,
engine oil coolers, fuel coolers, charge air coolers and intake air coolers).
Building HVAC Segment
Market Overview – After two consecutive years of strong growth, the North
America heating market contracted slightly in fiscal 2016, primarily due to
warmer-than-normal winter temperatures. We expect modest improvement in the
North America heating market in fiscal 2017. We anticipate market demand for
our data center cooling, ventilation, and geothermal heat pump products to increase
in fiscal 2017. We expect continued growth in demand for data and connected
devices, coupled with increasing requirements for energy-efficient and green
solutions, will continue to drive increased demand for our data center cooling
products and, in particular, our high-density and free-cooling solutions. Likewise,
we expect improvement in construction markets and energy efficiency legislation
to drive increased demand for our ventilation and geothermal products.
Products – Unit heaters (gas-fired, hydronic, electric and oil-fired);
duct furnaces (indoor and outdoor); infrared units (high- and low-intensity);
hydronic products (commercial fin-tube radiation, cabinet unit heaters, and
convectors); roof-mounted direct- and indirect-fired makeup air units; commercial
packaged rooftop ventilation units; unit ventilators; single packaged vertical
units; geothermal and water-source heat pumps; precision air conditioning units
for data center applications; air-handling units; chillers; ceiling cassettes;
and condensing units.
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