The two companies signed a letter of intent Oct. 12 to set up a 50-50 joint venture based in Webasto’s hometown of Stockdorf, Germany. The unnamed venture is slated to launch in January under the management of Webasto-selected leadership. Financial terms weren’t disclosed.
Webasto is a newcomer to the convertible market, but with a few new contracts under its belt and the pending joint venture, the company aims to make inroads fast.
Smart’s soft topIn addition to the convertible top for DaimlerChrysler’s Smart car, the supplier recently secured contracts for a North American soft top convertible program that debuts in the 2005 model year and a retractable hard top system that launches in the 2003 model year for the Asian market.
“This (venture) means we offer vehicle manufacturers the extensive competence of the entire value-added chain, from design and styling to manufacturing and marketing of our products,” Webasto Chairman Franz-Josef Kortum said.
Webasto’s existing convertible programs will continue to be controlled by the German company, but any new programs after Jan. 1 will be shuttled through the joint venture, said Fred Olson, president and CEO of the company’s North American unit, Webasto Roof Systems Inc.
The venture’s strategy makes sense, one market watcher said.
“The real future for (convertible systems) — and this is probably why they’ve done this with Pininfarina — is to really be a vehicle outsourcer,” said Greg Janicki, vice president of CSM Worldwide Inc. in Northville, Mich. “These vehicles are typically niche vehicles: they’re low-volume, and it’s difficult for the OEMs to justify the investment that is required to build 10,000 or 15,000 units in a facility that’s designed for 300,000 units.”
Battling ASC, KarmannKarmann and other European coach builders have succeeded with that approach in Europe, Janicki said, while ASC is using the strategy in North America. With automakers exploring more niche vehicles, often convertibles, based on existing platforms, the opportunity for a supplier that can design, engineer and build the vehicle is growing.
For 2001, CSM estimates 705,000 convertibles will be produced in North America, Europe, Japan, Korea and South America. That represents 1.5 percent of total automotive production in those regions.
“It seems like it could work,” Janicki said of the Webasto-Pininfarina venture.