Formerly known as the American Sunroof Company, American Specialty Cars has kept its initials but re-invented itself over the past two years as a specialist body engineering company for low volume production vehicles. Matthew Beecham talked with Jeff Steiner, Executive Vice President and Chief Marketing Officer for ASC about how the company has evolved since the acquisition by Questor three years ago, its latest innovations and plans for international expansion.
ASC is now looking to emulate the success of European styling and engineering houses such as Pininfarina, Karmann, Valmet and Bertone by expanding into Europe and China. The company has almost entirely come out of the sunroof business apart from its joint venture with Yachiyo at Columbus, Ohio while it has also retained its 20-year association with Toyota with the convertible-roof system on the Solara and with Mitsubishi on the Eclipse. It sees China as real opportunity and has already been contracted by one North American manufacturer to design a line of vehicles specifically for the Chinese market.
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At the 2005 Detroit motor show, ASC showcased five concept vehicles including a convertible version of the Chrysler 300 Hemi C, the first four-door open-top since the Lincoln Continental of 1967. ASC took the current 300 Hemi C production body and conducted a full engineering exercise to ensure that the concept had the necessary stiffness and was able to meet all the safety standards of the production car. Europe is another hunting ground for growth although the company accepts the competition there is greater and the market more fragmented. Growth in Europe would probably be through a mixture of organic growth, acquisitions or joint ventures. In 2002, the family of ASC’s late founder, Heinz Prechter, agreed to sell the company to Questor Partners Fund II. Questor is a private-equity fund headed by turnaround expert Jay Alix. ASC is now 100% privately held by Questor.
Just-auto.com: As we see it, ASC is in the throes of moving from an entrepreneurial company — whose success was highly dependent on the abilities of its late founder, Heinz Prechter — to a professionally managed one which relies on technical capabilities, process and financial discipline to improve continuously.
Jeff Steiner: I would agree with that. Heinz Prechter was a very intelligent and charismatic man with great vision. He spent a lot of time carrying the company on his personal energies. But today, some of our [new] leadership [team] has come from the automakers and tier one suppliers. So we are used to working as one. We are looking at this more as a company that is dependent on its processes and systems than on any one individual. The acquisition by Questor has been a very positive move for ASC, enabling the company to grow. Questor invested money into the company, which has allowed us to fund an aggressive new product development group, focus our R&D and manufacturing processes.
j-a.com: Why are we seeing a resurgence of convertibles in the US?
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By GlobalDataJeff Steiner: There are a couple of reasons for that. The first is due to the current hyper-segmentation of the market. Automakers are looking for unique features that are causing consumers to rush into a showroom and buy a car. The second relates to the need to have fun in your vehicle. Some recent research estimated that 42% of the US market buys cars strictly on value-based transportation needs. In other words, these consumers are not style-conscious; they want basic, reliable transportation. [But] then the remaining 58% of the market are influenced by styling and perception. This group is looking for more fun, style and emotion from their vehicle. Convertibles are a way to achieve both. For automakers, it is a way to differentiate their product line as well as add a little bit more fun and excitement for those consumers looking for that.
j-a.com: ASC showcased its Helios four-door convertible concept at the Detroit auto show last January. And yet four-door convertibles have been extinct for 40 years. Why now?
Jeff Steiner: I think there are two reasons. The four-door convertible is first and foremost a body-engineering challenge to make it work. We knew we could put a convertible top on it — that was the easy part. The hard part was whether we could make the body stiff enough to make a prototype. Our goal for the [2005 Detroit] motor show was that we wanted an engineered, production feasible prototype that we could show and drive. It was a learning laboratory for us. To my mind, there were three key things that came out of that project.
The first is that we believed that we could do a four-door convertible on a rear-wheel-drive architecture utilizing a lot of the patents on the structural rigidity elements that we put into it. So any rear-wheel-drive platform using our structural technology could become a four-door convertible.
The second element is that a lot of those structural discoveries can also be used on a two-door convertible because any convertible has an inherent challenge in keeping the body as stiff as you would like it to be.
And the third element relates to the top system. Because we are trying to package an enormous top into a very small package, we have a patent-pending, inward-folding top mechanism which basically allows you to take a 2-metre-long top and package it into a 0.5-metre space. That again can be applied to smaller two-door convertibles. So on the 300 Hemi C production we didn’t change the rear decklid at all to package that top. When the top is down and you open the trunk, you can put four golf bags plus a few small suitcases.
j-a.com: And you are targeting baby boomers for this system?
Jeff Steiner: Yes. Those consumers in their late 40s and early 50s are the prime age to have a vehicle like this. We see a tremendous amount of wealth in the US among that demographic group who are looking for fun vehicles.
j-a.com: What are the considerations you give when setting out to develop such a concept? i.e. for any company, this type of activity costs a lot of money and it also means you have to ramp up your skills as a supplier at the consumer level as well.
Jeff Steiner: We measure innovation not on the number of cool ideas we create but on the cool ideas created that actually have true market value. We use a process called Planned Innovation. It means you spend a lot of time understanding the market need and target price in order for that to be successful in the market. Once we establish that, we then have greater confidence in spending serious money on engineering and developing it. The Helios project started in November 2003 with the goal of showcasing it just over a year later at the Detroit auto show in January 2005. Following the Planned Innovation process, we took just over two months of upfront study of setting the technical and financial targets in order to determine whether or not it was possible to engineer a four-door convertible. We then invested some heavy money to initiate the engineering work and prove out our theory. There’s no point in spending $10 million on two really cool ideas only to discover that nobody wants them.
j-a.com: What are the trends you are seeing in sunroof designs?
Jeff Steiner: I think the general observation is that bigger equals better. The challenge is weight: you are putting more weight on the roof, which for SUVs and high centre of gravity vehicles is not a good thing. The second thing in a lot of cases is the overall sun loading of a car. If you have a huge glass paneled roof, that presents a problem from a heat-loading standpoint.
We are also seeing more combinations of fixed glass and moving glass roofs because it is a feature that you need to experience. Once you experience a vehicle with a lot of glass or an open-air vehicle and you can manage some of the heat loads, you find that that is a very desirable feature that a consumer wants for their next vehicle.
j-a.com: Do you have any plans for international expansion?
Jeff Steiner: We are looking at growth opportunities in Europe as well as Asia. The Chinese and Korean markets cannot be ignored. But the European market is more mature. There are some good and well-established players that are similar to ASC that are located in Europe such as Pininfarina and Karmann. We continue to have discussions with European automakers primarily about opportunities that they have in Europe as well as in the US. And in order for us to be successful in meeting their needs, we are evaluating either partnering with or setting up our own operations that support those European OEMs, primarily from an engineering and design standpoint. And then if the right opportunity presented itself, also from a manufacturing standpoint. Time will tell and opportunities will dictate whether we do that or not.
j-a.com: What was the background to ASC’s decision to split the 50/50 joint venture with Germany’s Edscha, known as Premier Roof Systems?
Jeff Steiner: Edscha is a very reputable company. The joint venture was formed in the US to supply BMW. Whenever you have a joint venture formed by two companies in a market place where both have chosen to compete, it becomes a challenge to manage that venture. It came to a point where both companies were not putting in their best resources or effort into that particular facility. We agreed that in order for that facility to continue to grow and maintain good customer relationships with BMW, the best thing was to split it into either a wholly-owned ASC component or Edscha component. We mutually concluded that it made sense for Edscha to purchase that joint venture.
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In this third edition report, we extend the analysis to provide market volume and value forecasts by product segment for conventional-size sunroofs in Western Europe, North America and Japan, from 2000 through 2011. We also take a closer look at the size of the convertible market in Europe and North America, the reasons for growth including an exclusive interview with ASC.
