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German suppliers counting on sizeable growth in US market this year

Munich/Detroit. German suppliers hope to significantly expand their North American business in 2004, according to a survey by Automobilwoche.

German companies with sizeable sales in the world's largest automobile market were contacted for the survey.

The suppliers told Automobilwoche that they forecast increased sales ranging from 3 percent to 20 percent during 2004.

In the first ten months of 2003 German suppliers exported goods worth 2.33 billion euros to North America, compared to 2.08 billion euros for all 12 months of 2000, according to the German Automobile Industry Association (VDA -- Verband der Automobilindustrie).

Hella, the lights and electronics specialist, hopes to increase its current US sales of 134 million dollars by at least 3 percent.

Brose boss Michael Stoschek expects sales to rise during 2004 by more than 20 percent to reach 294 million dollars.

The specialist for window raisers, seat adjusters and locking systems plans to "more than double" its US business by 2006, Stoschek said, with sales of approximately 530 million dollars, which would represent approximately 23 percent of group sales.

Transmission manufacturer ZF also believes in US growth. In 2004 its Chicago plant will supply complete axle systems for the new Ford 500 and the Freestyle.

ZF has manufactured continuously variable automatic transmissions (CVT) for passenger cars in the USA since last year.

In 2003 ZF posted sales of approximately 2 billion euros in the NAFTA regions. For this year the supplier expects growth of between 5 percent and 9 percent.

Franz Fehrenbach, chairman of Bosch's board of directors, believes that diesel engines with make a breakthrough in the US market, where they only account for 3 percent of industry sales, compared to 50 percent in Europe.

Bosch has joint ventures with General Motors, Ford and Chrysler for diesel injection systems.

The Kolbenschmidt Pierburg Group is also optimistic. With a turnover of approximately 300 million euros, the group generates approximately 17 percent of its sales in North America.

Kolbenschmidt Pierburg has identified the light and heavy commercial vehicle market as sector for growth.

"We believe that in 2004 the situation on the American domestic market will continue to recover," says Kolbenschmidt Pierburg. It will focus on products such as throttle valves and water pumps.

Radiator specialist Behr is also investing in the U.S. market. Last year the supplier had U.S. sales of approximately 830 million dollars, nearly a quarter of the company's income.

During the next three years the Stuttgart based company plans to invest approximately 100 million dollars in the Dayton Thermal Products plant, which it bought from DaimlerChrysler in 2002.

But Continental AG's view of the U.S. market is less positive. During the business year 2002 the company won 25 percent of its total sales of 11.4 billion euros from the North American market.

Continental plans to increase its U.S. business in passenger car tires as original equipment but will wait and see how demand develops in the spare tire market.

Continental managers complain about high manufacturing costs in North America. The company plans to expand its capacity in San Luis Potosi, Mexico and to open a new plant in South America for its passenger car tire sector.

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