Last year showed just how drastically a suppliers fate can change – for better or for worse – based on a close relationship with a single automaker.
Global sales at General Motors former in-house supplier Delphi and Fords former partsmaking unit Visteon fell more than $3.3 billion (E2.6 billion) between 2004 and 2005.
Meanwhile, Denso of Japan gained 14.8 percent or $2.9 billion in global sales last year as Toyota, its top customer and a 24.6-percent shareholder in the supplier, recorded solid worldwide growth.
Delphi and Visteon each remain dependent on their former parents, therefore GMs and Fords continued losses, particularly in the US, have resulted in huge problems for the US-based suppliers.
Visteon restructured last year with Fords assistance.
Delphi put its US operations in Chapter 11 bankruptcy protection last October largely because GM, its biggest customer, lost $10.6 billion in 2005 and saw its US market share dwindle.
Delphi has been harder hit because of the GM situation, said Antonio Ferreira, manager of European components research at CSM Worldwides London office. But I expect Visteon will begin to feel the effects quite soon, too.
On a brighter note, Visteons 2005 sales in Europe increased 2.5 percent to $3.8 billion.
Densos sales in Europe rose 23.6 percent to $3.2 billion in 2005. The supplier also reported a E10.5 million profit in Europe in its fiscal year ended March 31, up from a loss of about E63 million in its previous fiscal year.
Denso plans to keep growing globally and in Europe by capitalizing on increased demand for diesel systems. About half of the new cars sold in Europe are diesels.
The supplier aims to make more than 2 million passenger-car common-rail diesel units by 2006, up from 1 million in 2004.
Denso says 30 percent to 40 percent of its common-rail business is with Toyota. Its other European customers for diesel systems include Ford of Europe, Opel/Vauxhall, Nissan and Mazda.
Denso has the security of a lot of business with Toyota, Ferreira said. But has been successful in getting business from other auto-makers as well.
Most made gains
Most major partsmakers in-creased their sales to European automakers last year, according to data compiled by the Automotive News Europe Data Center.
Just seven of the top 30 suppliers to European automakers lost revenue in the region last year. They were: Lear and Delphi of the US; ZF Friedrichshafen, Hella and Karmann of Germany; Autoliv of Sweden; and Magneti Marelli of Italy. But Lear, ZF, Magneti Marelli and Autoliv gained in overall revenues.
The members of the top 30 reported combined 2005 sales in Europe of $142.9 billion, up 6.6 percent from 2004. The top 30s combined 2005 global revenues were $293.4 billion, up 5.1 percent from the previous year.
Two suppliers fell out of the top 30 this year: Dana of the US, which was No. 27 last year, and Federal-Mogul of the US, which was No. 26 .
New to the list are German contract coachbuilder Karmann at No. 17 and engine management and transmission specialist BorgWarner of the US at No. 29.
You may e-mail Jesse Snyder at [email protected]
– Tony Lewin contributed