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April 21, 2005

UK: Auto Chassis International invests in Spain, Iran and looks to India

The expansion of capacity in emerging markets, and the growth of Asian transplant assembly in North America and Europe, is creating opportunities for axle suppliers to grow the business, says Gilles Levassor, director of Auto Chassis International (ACI).

The expansion of capacity in emerging markets, and the growth of Asian transplant assembly in North America and Europe, is creating opportunities for axle suppliers to grow the business, says Gilles Levassor, director of Auto Chassis International (ACI).

ACI is a medium-sized chassis systems supplier with sales of €980 million in 2004.

“More or less all the Asian manufacturers coming to Europe are looking for a partnership or production agreement” said Levassor.

The company produces the suspension for Nissan models assembled in Europe, said Levassor, and has a partnership with Yorozu to provide Nissan with suspension modules in Japan and Mexico.

But the biggest growth prospects come from the emerging market strategy of parent company Renault.

ACI is a fully owned subsidiary of Renault, and there are no plans to change its status, says Levassor.

The international share of its production is set to grow rapidly.

ACI is supplying chassis components to the Renault Modus, Renault’s B-platform vehicle, and at the end of 2004 opened a new facility in Valladolid, Spain, to supply chassis components to the Modus assembly in Spain.

More importantly, ACI is globalising with Renault and addressing emerging markets such as Romania and Brazil with its low-cost €5,000 Logan model.

ACI has already opened a plant for the Logan in Romania in 2004, and now has 800 of its 4,000 employees in the country.

Romania is operating as a centre of expertise for the new model.

Ninety per cent of ACI’s business is with Renault/Nissan and with the globalisation of the Logan, ACI will be fully occupied with this business in the next three years says Levassor.

ACI’s chassis system volume will increase from three million car sets in 2004 to 4 million in 2007.

“At the moment we are concentrating on these projects rather than looking for new markets or facilities” said Levassor.

The next major facility expansion is in Iran where ACI has created a joint-venture with local axle manufacturer Robat Machine.

The local, privately owned partner already produces axles for other projects, including components for local assembly by Nissan, but not at the high volume of the Logan project.

ACI Pars will invest about €15 million in its plant at Karadj, 40 km from Tehran, to weld sub-frames and rear axles and assemble front and rear axles, using lower suspension arms and some stamped parts brought in from ACI’s operations in France and Romania.

“We chose them because they have stamping and welding facilities and have knowledge of the component” said Levassor.

It was also attractive that the company is based just 25 km from Renault’s assembly plant.

ACI plans to establish the joint-venture’s facilities in the next year and start production for the Renault Logan in June 2006.

Total investments in the project will be €20 million over six years, and the plant will employ 350 for sales of €50 million a year by 2007.

The Iranian car market is expected to grow from 370,000 units in 2002 to over 600,000 and 2008, according to ACI, and Iranian economic reforms are extending to the automotive sector where technical regulations are being brought up to international standards, ACI says.

Levassor says that after a year or two ACI Pars will look for other customers as the Iranian market grows.

ACI is also looking at supporting Renault with the front and rear axle in India, where the OEM plans to take the Logan next. It also expects to be asked to support Renault in China if the carmaker decides to take the plunge and build the Logan there too, although because the market is so competitive it may look to work with its Japanese partner there.

SupplierBusiness.com

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How attractive are current investment opportunities in Europe?

Europe has been identified as one of the most favorable regions for investors, seeing high investment activity in the past year. Most of these investments have been through Debt Offering, valued at close to $700 billion. The region has provided attractive investments in a diverse set of companies. Companies who tend to major themes such Digital Media, Cloud, Artificial Intelligence, E-commerce, and Big Data are recording the highest number of deals, with Digital Media recording close to 2,000 deals. However, GlobalData’s whitepaper offers a full view of the market, analyzing less successful or attractive points of investment as well, examining statistics on Equity Offering investments and PE/VC deals. Understand how government agencies for economies around the world use GlobalData Explorer to:  
  • Track the M&A and Capital Raising volumes into their target market
  • Identify the top sectors in the target market attracting the investments
  • For any investment segment, identify the top Investors inside and outside the target economy that are already investing in the Segment
  • Assess and showcase the growth potential for various Industries in the target economy
Don’t miss out on key market insights that can help optimize your next investment – read the report now.
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