LONDON - Textron Automotive Co. expects its new German subsidiary, Kautex Textron, to quadruple its sales of plastic fuel tanks in the next three years. Most of that growth will be in North America.
Textron also expects to increase its sales of high-tech plastic instrument panels in Europe. The engineering expertise is based in North America, but the products will be manufactured in the Netherlands.
Earlier this year Textron bought out Marley Foam Ltd., its joint-venture partner in a plant in Born, the Netherlands.
'That will give us more flexibility,' said John Janitz, chief executive of Textron Automotive, in an interview after he toured Textron's European operations.
The Born factory has been supplying instrument panels for the Ford Mondeo in Genk, Belgium, and the Chrysler Voyager in Graz, Austria. He said the plant has won some business with NedCar, the Volvo-Mitsubishi joint venture in the Netherlands, but he did not give details.
The German subsidiary, Kautex Textron, is based in Bonn. Textron Automotive, based in Troy, Michigan, bought Kautex last summer.
The acquisition instantly changed Textron from a North American company to an international one. Formerly, 94 percent of Textron Automotive's business was in North America. The figure has dropped to 70 percent with the addition of Kautex and the Valeo Wiper Systems Ltd. business in the UK that Textron purchased last year.
Kautex sells two million plastic fuel tanks a year now, said Janitz. This will rise to eight million a year by 2000. He said that would give Kautex global leadership in plastic fuel tanks.
In Europe, 60 percent of cars use plastic fuel tanks, while in North America the figure is 30 percent and in Asia it is only 5 percent.
Plastic tanks are lighter, less permeable to evaporation and can be molded into complex shapes.
Janitz said Textron Automotive was strong enough in Europe now to grow organically, by increasing sales with existing resources. Kautex has good customer relations, especially with Volkswagen Group, its biggest customer. Janitz also said Textron was close to making some unspecified new acquisitions in Europe.
In general, he said, 'the next frontier is to expand the trim business here' in Europe. The company gives that a higher priority than increasing its tiny foothold in Asia.
Textron Automotive has been growing rapidly: sales of $700 million in 1991 rose to $1.5 billion in 1995, and will be $2 billion this year. He expects $3 billion in sales in four years' time.
Janitz said the Kautex acquisition was a 'really solid marriage.' Although Kautex continues to operate separately, the top executives look for synergies.
For example, the combined purchasing power of the companies saves money when it comes to buying resins. Textron Automotive was already the biggest user of resins in North America. Also, space can be found in each other's plants.
Textron aims to increase its automotive business by 10 percent a year. Since its big markets are growing at only 1-2 percent a year, the company needs to do two things. It has to be in growth areas for components, such as plastic fuel tanks, and it needs to add value, as Textron has been doing with instrument panels.
'If we sell an instrument panel structure of plastic, foam and some steel, and the customer decks it out with instruments, etc., we get maybe $40,' said Janitz. 'If we add features, like the wiring harness, we get maybe $80. If we put it all together, sequence it, and deliver it every two hours, we sell it for maybe $300. Then if we are involved in the engineering, finding ways to make two parts into one, we can drive down the costs.'