The merger of Siemens Automotive and the VDO business of Atecs Mannesmann will create the world's largest supplier of cockpit modules and navigation systems.
The new joint venture, Atecs Siemens Automotive AG, will be 50 percent owned by Siemens AG, and 50 percent by Atecs Mannesmann AG. It will start operations on July 1, subject to regulatory approval. Siemens Automotive CEO Franz Wressnig, will run the new unit.
The group will have combined sales of about A7 billion, and a work force of 50,000. The new company will be 'the world leader in driver information, cockpit systems and car communication,' said the parent companies. The two suppliers have almost equal sales of about $3.5 billion each worldwide.
VDO, with its background in instrumentation, has been one of the early leaders in the development of cockpit modules. It has assembly contracts for cockpits at Volkswagen's plant in Mosel, Germany, and Seat's plant in Martorell, Spain.
VDO was also responsible for the development of the cockpit systems for the MCC Smart, one of the most completely outsourced cockpit developments to date.
Still, analysts had expressed doubts about VDO's ability to keep pace with the rapid growth in demand for cockpit systems.
Siemens' automotive division brings expertise and volume to VDO's business. Siemens has a cockpit systems joint venture with French supplier Sommer Allibert and has recently entered the navigation systems market. VDO is one of the market leaders in European navigation systems through its Phillips Car Systems business.