Outsourcing of car doors and other surface body parts is set to increase rapidly in Europe, according to the head of one Europe's leading suppliers of door systems and automotive stampings.
There also will be increased outside supply of complete bodies-in-white, especially for low-volume models, said Nick Brayshaw, chief executive of Wagon plc.
'Body-in-white is going to be the next big area of innovation, consolidation and growth,' Brayshaw said in an interview.
A body-in-white usually consists of major body panels welded together before prime and paint processing.
Brayshaw expects outsourcing of low-volume surface parts - such as panels for station wagon versions of high-volume sedans - to be worth 'easily £1 billion E1.65 billion)' in Europe by 2005.
These parts traditionally have been made in-house, said Brayshaw, but 'the manufacturers are trying to get it out.'
The growing interest in aluminum spaceframe technology creates one opportunity, said Brayshaw. He predicted that outside suppliers would be asked to supply outer panels to be fitted onto low-volume, niche models using spaceframes.
Brayshaw said Wagon would announce a partnership with Italian coachbuilder Stola, allowing it to offer Stola's body-in-white technology to Wagon customers across Europe.
Stola now supplies bodies-in-white to Fiat plants in Italy and Brazil.
'We already have a couple of programs on which we are working with other European customers utilizing Stola body-in-white capability,' said Brayshaw.
Wagon, based in Solihull, England, has grown its automotive business by 30 percent a year for the past three years. It expects to continue expanding at that rate in the next three years. That would take Wagon's automotive sales to around £600 million.
Wagon's main competitors are Germany's Thyssen Krupp Automotive, Dura Automotive of the USA and Magna International of Canada.
Brayshaw believes the outsourced market for surface body parts in Europe will be a major area of growth for his group. But he said that outsourcing of doors also is growing fast, including doorframes and window mechanisms.
'Our order books, particularly for our door technologies, are at an all-time high,' said Brayshaw. 'We have about 200 different projects in development.'
He said the aluminum door business 'is really taking off' as carmakers are becoming more concerned about reducing weight.
Brayshaw said Wagon is also chasing aluminum door contracts in North America, where it expects to get its first development contract this year.
'Our next step will be to build an engineering capability [in North America] and then grow through partnerships and collaboration with existing North American suppliers,' he said.
Wagon recently reported a 9 percent rise in group revenue to £408.8 million in the year ending March 31, 2000.
Automotive sales were up 28 percent to £282.7 million, largely due to the consolidation of Aries Structures' operations. Wagon acquired France-based Aries, which makes door systems and body structures, last November.
Wagon's UK profitability was hit by the problems at Rover. But this was offset by the strength of some European customers, including Renault, Audi and Peugeot.
In 1999-2000, 64 percent of Wagon's sales were made outside the UK, mainly in continental Europe. This share is expected to rise to 75 percent in 2000-2001.