OSNABRUCK, Germany - Specialist assembler Wilhelm Karmann GmbH has seen a wave of new business for niche products recently. Rainer Thieme, chairman of Karmann's management board, expects further growth to come from Karmann's hard-top coupe project.
The company showed a four-passenger coupe with a retractable hard top at the Frankfurt auto show last September. The hard-top concept offers the comfort and convenience of a fixed-roof vehicle in winter and the fun of a convertible in summer. Unlike a traditional ragtop, it offers protection against theft and vandalism.
'The market for retractable hard tops will grow considerably,' Thieme said, citing forecasts of a European market of 100,000 vehicles by 2004. Karmann also sees growth in its traditional contract assembly and convertible business.
A key convertible job for Karmann is assembly of the new fourth-generation Volkswagen Golf cabriolet. It is produced at Kar-mann in Osnabruck for the European market. Production for North America is at Volkswagen's plant in Puebla, Mexico. But the next Golf cabriolet will be produced only in Osnabruck, Thieme said. Production will start in 2001, at double the current rate.
Karmann also will work on the New Beetle convertible. Thieme said the company will produce the top stack, the metal structure that composes the roof top, for the car in Mexico with its North American partner, Dura Convertible Systems.
Karmann is the system partner for Volkswagen Group for the development of open vehicles, Thieme said. 'All Volkswagen convertibles are and will be developed by Karmann,' he said. 'Both companies are familiar with each other's working methods and means of communication.'
But that does not mean Karmann automatically receives the production contracts. For the next Golf cabriolet, the company had to compete with in-house assembly alternatives.
Karmann has seen big growth in volumes for the Mercedes-Benz CLK convertible, although production of the Kia Sportage and Golf station wagon has ceased.
Although Karmann has seen a rapid increase in sales in the past few years, profit growth has slowed. In 1997, the company reported a post-tax profit of 28.5 million German marks, or about $14.2 million at current exchange rates, on sales of 1.3 billion marks, or about $645.5 million at current rates.
Sales rose to 2.2 billion marks in 1998, but profits fell to 20.3 million marks. Thieme said that was due to increased investment.
In 1999 Karmann produced 76,603 cars, compared with 104,195 the previous year. Although units delivered fell, the value of sales rose slightly to an estimated 2.25 billion marks.
Thieme said Karmann made post-tax profits of more than 20 million marks last year.