VILLERON, France - The new Delphi Chassis Systems brake plant in Villeron is a sign of the megasupplier's rosy outlook for Europe.
Almost one-quarter of the plant's 16,300 square meters is unused and awaiting new business from a European customer. Plant officials maintain the empty space will evaporate over the next two years as Delphi's European sales and marketing teams take more non-General Motors business from Europe's entrenched suppliers.
In fact, Delphi as a whole hopes to make fuller use of its 38,000 workers at 63 European facilities with more business from outside its parent. It is a story the world's largest
partsmaker has been telling since it changed its name from General Motors Automotive Components Group in 1995 to take the focus off its ties to the automaker.
The strategy involves partnerships and acquisitions, leveraging Delphi's global manufacturing base, and selling integrated systems and module technology.
But to date, Delphi's progress in Europe has been slow. Since 1995, annual European sales have remained at about $4.1 billion, although fluctuating exchange rates that strengthened the dollar over that period are partly responsible for holding down the figures.
More revealing is the percentage of Delphi business that comes from GM's European subsidiaries, Opel and Vauxhall. It also has remained unchanged at around 53 percent, or $1.7 billion last year.
Still, that compares favorably with Delphi's worldwide sales, of which more than 65 percent come from General Motors.
And growth in non-GM business is what Delphi is counting on ultimately to boost its sales in Europe. One bright example has been Fiat Auto, from which Delphi took over two parts plants in 1991 and 1994. Delphi's sales to Fiat have subsequently grown from less than $70 million in 1989 to more than $450 million last year.
Other acquisitions in Germany and France, including Merit GmbH & Co. KG (switches) and DeCarbon (shock absorbers), as well as strategic partnerships such as one with Calsonic Corp. (air conditioners), have helped give Delphi wider access to Europe's automakers.
The company now supplies every major automaker in Europe and provides cockpit modules to Fiat, Volkswagen AG and Daimler-Benz.
Graham Bell, Delphi's marketing and operations planning director for Europe, hopes for a 10 percent increase in Delphi's non-GM European business over the next four years. He says Delphi's product diversity and system-supplier status will ultimately ensure success.
Still, the barriers to winning more business in Europe are daunting. Much of Delphi's technology pitch - including electronics integration, modular interiors, advanced brake and steering systems and high-pressure injection - echoes that of competitors with home-turf advantage, such as Robert Bosch GmbH and Siemens AG.
In addition, European nationalism has locked Delphi out of some opportunities, such as when French original-equipment customers prevented the sale of the supplier group Valeo SA to Delphi in 1996. To some, Delphi will always be just the American parts division of General Motors.