Annual Report 2010 - Knorr-Bremse AG.

MANAGEMENT REPORT
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2010 after falling 65% in 2009, the steepest decline of any
segment in the region. Following on from 70,000 units
built in 2009, trailer output increased by over 50% and exceeded
the forecast level of 105,000 units. The level of aftermarket
sales rose by 21% against the prior year to reach
an all-time high in 2010 after adjustment for foreign exchange
effects. Production of trucks in Central and Eastern
Europe also increased, rising 37% from around 55,000 units
in 2009 to 75,000 units in 2010, as the pace of recovery
failed to match that of Western European truck output.
The key sales driver in Europe in 2010 was once again the
disc brake, which also celebrated a milestone in the year
under review. In the fall of 2010, the 20 millionth disc brake
came off the line at the company‘s largest disc brake production
facility in Aldersbach, Germany. In the Western European
OEM market, Knorr-Bremse was able to maintain its
leading role as supplier of disc brakes for tractor units.
Another production milestone came up in 2010 at the
company‘s Kecskemét plant in Hungary, where the 1 millionth
Air Processing Unit (APU) was manufactured in the
spring of 2010. Since 1997, the APU, which was originally
developed by Knorr-Bremse in the 1990s, has seen successful
service with Daimler, Iveco and DAF, among others.
2010 also brought the next stage in the expansion of the
exceptionally successful Knorr-Bremse KAMA joint venture
initiated in 2007 between Knorr-Bremse and the largest
Russian commercial vehicle builder KAMAZ. May 2010 saw
the inauguration of the first assembly line for torsional vibration
dampers at the production plant in Naberezhnye
Chelny. The new line expands the product portfolio of the
joint venture, which was previously focused on the production
of drum brakes.
North America
Rail Vehicle Systems
The freight car market in North America experienced a further
decline in 2010. New freight car construction decreased
from around 22,000 units in 2009 to approximately
15,000 units in the year under review, the lowest level since
1987. On top of this, North American customers took delivery
of just 350 locomotives in 2010, a downturn of around
30% and the lowest level since 1992. For equipment manufacturers
in the freight car and freight locomotive sectors,
however, second-half order intake showed signs of improvement
and orders on the books at year-end indicated
better prospects ahead. Even so, and despite a decline of
almost 10% in the North American freight car fleet due to
scrapping, some 20% of the fleet remained idle, even at
year-end. The aftermarket too was severely impacted.
In the freight sector, Knorr-Bremse was able to mitigate the
effects of the continued strong market downturn in 2010
by improvements in market share and freight car content.
The key factors here were the company‘s strong position in
the original equipment and aftermarket sectors, increased
exports, especially via the growing number of inter-company
shipments to China, and gains due to increased investments
by railroads in new technology products, such
as the electronic braking system EP-60 and the Locomotive
Engineer Assist Display and Event Recorder, LEADER.
In North America too, several major projects in the passenger
transportation sector were cancelled or postponed.
But even against this difficult backdrop Knorr-Bremse succeeded
in winning the contract from the Washington Metropolitan
Area Transit Authority (WMATA) to equip 364 vehicles
with brakes and HVAC systems by 2015.
2010 brought growing demand for the type VV-120T oilfree
Air Supply Unit in the North American market. WMATA,