German piston and filter supplier Mahle is growing in Japan through an aggressive acquisition effort.
In 1999, Mahle bought Izumi Corp., a Japanese piston manufacturer with sales of E1.76 billion.
In April, Mahle acquired a 33.3 percent stake in Japan's Tennex Corp., and raised its equity to 57.72 percent by August. A former subsidiary of Nissan, Tennex, produces air and oil filter systems. It had sales of E450 million last year.
The Tennex acquisition gives Mahle's filter-systems business global sales of E1 billion and makes it the world market leader in filters.
Tennex also helps in terms of geography and customers, said Mahle CEO Heinz Junker. Mahle had been concentrated in Germany, Austria and France, with two plants in the USA and joint ventures in Mexico and Korea.
'If you look at the Tennex plant structure it gave a good fit, because they are located where we are not,' Junker said.
Tennex's Japanese clients broadened Mahle's customer base beyond European clients such as Daimler-Chrysler, BMW, Audi, Volkswagen and Porsche. Tennex supplies Nissan, plus most Japanese transplant operations in the UK and USA.
'So we get access not only to Nissan but also Toyota, Honda and Mazda,' Junker said.
Before the Tennex acquisition, European customers made up 80 percent of Mahle's business.
Tennex's three plants in Japan and Mahle's European locations make the combination especially well placed for serving the Renault-Nissan alliance, Junker said. The alliance is focusing on sharing cost-cutting and purchasing expertise.
'Wherever the Renault plants are globally, we are right next door to them,' Junker said. 'We are in France, the UK, USA, Mexico and Japan, so we can support Renault-Nissan on a global basis, which nobody else could.'
Mahle believes that adding Tennex gives it a size advantage in the still-fragmented filter segment.
'In other products, such as suspension or engine parts, there are typically two, three or four major global players,' Junker said. 'We expect the same consolidation in the [filter] business.'