Engine filter and suspension component manufacturer Sogefi says it intends to be a major player in industry consolidation, although this will likely occur against a backdrop of European shrinkage and Asian expansion.
Addressing media at this year’s EquipAuto show in Paris, Sogefi CEO Emanuele Bosio made his comments as he formally outlined the acquisition of French automoitve components group Mark IV Systemes Moteurs for around EUR150m (US$205m).
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Mark IV Systemes Moteurs claims it is one of the largest air intake and engine cooling producers in the world with revenues of around EUR250m last year and slightly more than 1,000 employees. It has eight production plants – three of which are in France – while the remainder are in Canada, Mexico, Romania, China and India.
“We are absolutely sure Sogefi will be a leading player – we want to be an actor in the consolidation process,” said Bosio. “I see merger and acquisition has restarted and therefore Sogefi would like to be a consolidator in the future.”
Despite that optimism, Bosio is not flinching from wielding the axe in Europe where he intends to reduce the size of the business. “We have a clear strategy to downsize our performance in Europe where expansion is difficult,” he said.
“We will continue to close plants and reduce our capacity in Europe but at the same time, we have a clear strategy of further expansion in the growing markets such as Asia and South America.
“Looking to the east and China, we were pioneers in China, today we have three plants. We supply many Western car makers, helping install production capacity. India is the most promising market and in 2010 we saw 70% growth compared to 2009. It is a bit lower in 2011 but continues to grow at 30%-40%, therefore India for us will be the number one market.”
