Two new production cars demonstrate Plastic Omnium's decision to supply complex modules rather than simple bumpers.
"The backbone of our modular strategy is innovation," says Plastic Omnium Vice Chairman Laurent Burelle. "If the idea is just to put together all the parts, there is no added value for the customer."
Paris-based Plastic Omnium makes exterior components, largely in plastic, and owns 50 percent of Inergy, the global market leader in plastic fuel tanks.
"The new Porsche Cayenne is an example of our expertise," says Burelle.
Plastic Omnium supplies the front and rear bumpers for the Cayenne. The front bumper alone contains as many as 70 different components.
Plastic Omnium is also supplying front ends for the new Renault Megane range through a joint venture with Valeo.
When production of the new-generation Scenic compact minivan is fully ramped up, the Megane venture will produce 3,000 front-end modules a day. The new Scenic debuted at the Geneva auto show last week.
"We feel very much that front-end modules are the future," says Plastic Omnium President Marc Szulewicz. Although some carmakers will initially produce the modules in-house, "long term they will certainly begin to outsource them," he says.
Plastic Omnium also supplies rear door modules to various carmakers through a joint venture with Inoplast.
Plastic Omnium's aim is to add value through the modules, rather than just become a subassembler of the carmaker.
The company invests 6 percent of sales a year in research and development. It opened a new international technical centre, Sigmatech, near Lyon, France, in July 2002. The 15,000-square-meter center employs 400 and includes a pilot production line.
Plastic Omnium can recreate the temperature and humidity of 22 of its plants at the center to test manufacturing processes at its facilities around the world.
The settings of point robots can be optimized on the pilot line and then transferred electronically to the assembly plant.
Plastic Omnium's automotive business has grown rapidly in the last 15 years, and even in the current uncertain environment Burelle says the company can outperform the automotive industry by 5 percentage points.
In 2002, Plastic Omnium's automotive sales grew by 6.8 percent to E1.29 billion. The company's automotive business accounts for almost 80 percent of total sales, which were E1.6 billion last year. The growth rate was held back by shifting exchange rates, according to Plastic Omnium. At constant exchange rates, sales would have risen by 10 percent, the company says.
Plastic Omnium says its full year results will show a strong increase in profitability and reduction in debt, helped by a slowing of the rate of new plant openings.
In 2000 Plastic Omnium opened 10 new automotive plants - seven in its wholly owned Auto Exterior Division, and three in the joint-venture fuel systems business with Inergy.
The number of new plants dropped to three in 2001 and in 2002 Plastic Omnium opened only one new plant. No new plants are planned for this year.
Plastic Omnium now has 70 plants worldwide, including the part-owned Inergy operations.
The plants give Plastic Omnium a wide global footprint. Burelle says the company has squeezed more volume out of existing plants without significant additional investment. Plastic Omnium supplied parts to 50 new model launches in 2002.
Seventy percent of Plastic Omnium's sales are outside France, and its largest individual market is the USA. But in 2002 the company's fastest growth was in Asia and Eastern Europe.