CLEPA CEO, Paul Schockmel at the supplier bodys Annual Reception in Brussels

CLEPA CEO, Paul Schockmel at the supplier body's Annual Reception in Brussels

European automotive supplier body, CLEPA says a certain amount of consolidation in the component sector is necessary as the segment recovers after the deep recession of the past few years.

CLEPA's view comes hot on the heels of this week's announcement China National Chemical Corporation (ChemChina) has agreed to buy Italy's Pirelli, the world's fifth-largest tyre manufacturer, in a deal valued at EUR7.1bn (US$7.8bn).

The acquisition will give ChemChina's tyre-making unit, China National Tire & Rubber, access to advanced tyre manufacturing and product technology, allowing it to move into the high-margin premium tyre segment as well as giving it access to significant OEM and aftermarket contracts around the world.

"We have a tremendous amount of suppliers and with or without China, a certain amount of consolidation is necessary, especially if you see the growth opportunities ahead," CLEPA CEO, Paul Schockmel told just-auto at the organisation's Annual Reception this week in Brussels.

"If [the] Chinese are buying European technology companies it confirms we have the right companies in Europe and China of course, they are trying to catch up. In certain areas they have only one option - the acquisition option in many cases is the only realistic option.

"In many cases these are not financial investments but strategic investments."

ChemChina will initially buy 26.2% of the Italian holding company Camfin, which owns Pirelli & C Spa, to be followed by a mandatory full takeover later on.

The deal is the latest in a string of takeovers of Italian and European companies by cash-rich Chinese firms, who are keen to take advantage of the weak euro and position themselves for the recovery of the Eurozone economy.