ABINGDON, UK - In April, TI Group plc bought US-based fuel systems producer Walbro Corp. for $570 million. It announced that Walbro would be integrated with its own fluid-carrying business, Bundy, to form TI Group Automotive Systems division. Allan Welsh, chief executive of the new unit, was interviewed by Automotive News Europe's Ian Morton about his plans for the company and the future of the fuel systems market.
What does Walbro bring to TI Group, and how does it fit with Bundy?
With Walbro we get multi-layer tank manufacturing capability, and we get pumps, valves and sender units. Now we can supply everything from one end of the fuel system to the other, from the filler pipe to the injectors. Walbro's automotive fuel storage and delivery technology will combine with Bundy's fuel lines and quick connectors, creating a unique supplier of complete fuel storage and delivery systems on a global basis.
In addition to fuel storage and delivery systems, Walbro has also brought to TI stakes in a series of important licensing agreements and joint ventures. These include a 49 percent stake in Marwal, a joint venture with Magneti Marelli in Europe and South America; a 50 percent-owned joint venture with Mitsuba in Japan; and a 48 percent-owned joint venture in Vitec LLC, in the USA.
In what areas do you foresee the highest growth?
Because emissions regulations are so tight, manufacturers want to opt for [fuel] systems designed and supplied as one module. Although full systems are not a reality yet, they are beginning to happen - and TI Group Automotive Systems is ready to take advantage of this trend.
Through Walbro, we are also becoming a lot more expert in plastic multi-layer fuel tanks. The move to a whole-systems design requirement is one of the results of increasingly stringent regulations. Multi-layer tanks can provide lightweight containers in any shape.
This is a rapid growth market. In Europe, about 80 percent of fuel tanks are in multi-layer composites; in the USA it is slightly less but increasing; in Japan it is 10 percent.
Where does this move place you on the world stage?
Bundy fluid-carrying and Walbro fuel storage and delivery will together form a £1.25 billion (euro 1.9 billion) business able to offer a single fuel system from the filler pipe to the injectors.
What growth are you looking for?
TI Group Automotive Systems has a 15 per cent share of all fuel systems and fluid carrying systems. We should be able to grow that share. Half our business is in North America, including shareholdings in licensees, and 35 percent is in Europe. The remainder is in Asia Pacific and South America. Our total turnover is £1.25 billion, and we have a total workforce of 21,000. Even without any other acquisitions, we believe we can take this business a few points above the market growth rate.
Are further acquisitions a part of your growth plan?
We are always on the prowl for any company whose acquisition would fit into our strategy. We would certainly not do anything on the same scale as Walbro in the near future. We need time to get TI Group Automotive Systems working. But we will take opportunities whenever they arise.