MILAN (Bloomberg) -- Sogefi S.p.A., the Italian auto parts supplier controlled by financier Carlo De Benedetti, aims to return to profit in 2010 by selling more components in the United States to Ford Motor Co. and Chrysler Group LLC.
Sogefi will probably more than double U.S. revenue in the next two years to about 5 percent of total sales, CEO Emanuele Bosio said in an interview at company headquarters in Milan. Supplying auto parts to Fiat S.p.A., Italy's biggest manufacturer, helped Sogefi win a contract to provide engine-oil filters for a model that Chrysler, a Fiat affiliate, is developing, he said.
Suppliers based in the European Union, where CO2 emissions limits will be tightened starting in 2012, are in a position to expand in the United States as auto manufacturers respond to President Barack Obama's moves to impose stricter rules for vehicles' fuel use and air pollution, Bosio said. Ford is adding to its lineup of small cars, while Turin-based Fiat plans to introduce its 500 model in cooperation with Chrysler.
“European partsmakers will have a competitive advantage in the U.S. if the market starts to demand the kinds of energy-efficient automobiles that President Obama wants,” Bosio said. “This is a market where historically we didn't have much of a presence.”
The Obama administration set the first national regulations targeting climate change on April 1, boosting U.S. automobile fuel-economy standards by about 30 percent by 2016. The American Petroleum Institute, an oil and gas industry association, said the partnership between the U.S. Transportation Department and Environmental Protection Agency will set a precedent for restricting greenhouse-gas emissions across the economy.
Sogefi retooled its vehicle-suspension factory in the U.S. state of West Virginia to supply diesel-engine filters to Dearborn, Michigan,-based Ford, Bosio said.
“We invested in the factory four years ago to provide suspensions to Ford and then we all know what happened to the car market in North America,” Bosio said. “Now we're growing again, thanks primarily to the relationship with Ford for the filters.”
The Italian company will also supply filters for Fiat's 500 minicar, which will be introduced in the United States in December.
Auburn Hills, Michigan,-based Chrysler, which is 20 percent owned by Fiat, has also asked Sogefi to supply filters for about 150,000 vehicles from a line of models still being developed, Bosio said.
Sogefi is 57 percent owned by de Benedetti's Compagnie Industriali Riunite S.p.A. holding company. With a network of 39 plants worldwide, Sogefi competes with ThyssenKrupp Automotive AG, NHK Spring Co. of Japan and Mubea Engineering AG as one of the world's top four makers of suspension components, as well as with Germany's Mann & Hummel GmbH and Mahle GmbH in filters.
Bosio said Sogefi is looking to buy smaller competitors to enter new markets, though the company isn't in talks with anyone at the moment.
“We are considering small and medium-sized acquisitions in our businesses in markets in which we are not present such as Turkey or South Korea,” Bosio said. “In this phase, we are not interested in bigger transactions.” The company is also expanding in emerging markets such as China and India.
The company had a net loss of 7.6 million euros ($10 million) last year compared with net income of 28.5 million euros in 2008. Sales fell 23 percent to 781 million euros.
Sogefi is also likely to increase revenue this year in addition to returning to profit, Bosio said in the March 31 interview, declining to specify figures.
U.S. new-car sales in March jumped by 24 percent from a year earlier to 1.07 million vehicles. Fiat CEO Sergio Marchionne said on March 30 that, in contrast to a possible 15 percent contraction in the European car market, the United States is recovering.
Said Bosio: “We hope the U.S. car market continues to evolve in this direction.”