Karmann executives say the Crossfire is showing US automakers what it can do. But they also say that demand for niche vehicles may have peaked. Karmann is looking to new capabilities and expanding businesses such as roof systems to ensure continued growth in its business. Karmann CEO Bernd Lieberoth-Leden was interviewed for SupplierBusiness.com.
Where is Karmann now in its business cycle?
We’re at the end of a long series of launches. It started with the A4 convertible. We’re now in the process of launching the Chrysler Crossfire Roadster, and the Chrysler Crossfire coupe and Roadster RST6. When we launch this car we have completed the renovation of the product mix at Karmann. We are not able to plan our production program like an OEM, so we are very pleased that our product mix is based on cars that are very successful in the market. For example, the Audi A4 convertible is being produced at more than 150 units per day, a remarkable figure for a convertible. And other models are also innovative and successful – like the Renault Megane.
What is the outlook for Karmann?
We are not able to plan our capacities like an OEM. We don’t know what we will produce in 2010. This is a special challenge that can only be met through extreme flexibility both upwards and downwards. In 2001 we produced 45,000 vehicles. Last year we had 73,000, and most probably we will produce a little more this year. 2004 will be the peak of our production figures.
More carmakers are bringing niche vehicle assembly in-house. Some niche vehicle assemblers are struggling. Will there be a long-term demand for niche assembly?
Yes. We have decided to modernise our paint shop, an investment of approximately €120 million. We started two years ago, and we will finish the final part of the construction work this year. This is a commitment from our owners that we will continue to produce cars. In addition these days you have to bring other strengths to market – the strengths and capabilities to develop complete cars from beginning to end. We are enhancing our capabilities in virtual engineering and simulation and in testing to give the OEMs the possibility of giving a project for a complete car, including all the difficult integration work, to Karmann.
Do you choose the second tier suppliers for roof systems?
One of our assets is the fact that we develop approximately four convertibles a year, and OEMs are launching one convertible roughly once every four years. It is a main area of interest for us. We know the market, we know the suppliers in the market, so purchasing responsibility on the special convertible parts are mostly on the side of Karmann. Purchasing responsibility for other parts of the complete vehicle are mostly the responsibility of the customer. On the material planning, steel, aluminium and magnesium and other materials are on our side, but the purchasing responsibilities are on the side of the customer.
What have you got in the pipeline?
We are now developing the Nissan Micra coupe convertible C+C. It is another way of co-operating, because we are planning a plant in a plant with Nissan. That means Karmann Osnabrück and Nissan UK will jointly develop the convertible. We will produce the roof system within the Nissan plant and deliver it over the shop floor to the Nissan workers, to make the final installation in the car.
What is the timeline and background to the programme?
Talks started in 2002 and start of production is next year. Co-operation up to now is very positive. One of the assets of Karmann is flexibility, and one of the most important things our development teams have to do is get a feeling for the plants’ philosophies from the very start of the project. The heritage of the brand must be inside a Nissan Micra, like all the other Nissan cars. Nissan is a new customer and it was very interesting to experience. We see the difference in co-operating with a Japanese company.