Top Europe-based suppliers took advantage of growing North American vehicle production in 2002 to boost global sales.
Each of the 10 Europe-based companies among the 25 largest global auto suppliers boosted overall revenue in 2002. All also boosted sales volume in North America during a year when light vehicle production there grew 5.3 percent.
For example, Michelin sales would have fallen except for North American growth. Michelin 2002 global sales grew $50 million (E47 million) to an estimated $4.65 billion, but the French tire maker's growth in North America rose E106 million to $1.26 billion, according to the annual North American supplier rankings from Automotive News, a sister publication of Automotive News Europe.
For UK-based GKN Automotive, half the global revenue growth of $605 million came from North America. More than a third of Valeo's $1.44 billion gain in global revenue last year came from growth in North America.
Combined, the top 10 European suppliers sold $21.73 billion of parts in North America last year, up $2.8 billion or 12.9 percent from 2001. The same group of suppliers posted global revenue of $79.17 billion last year, up $10.33 billion or 15 percent from 2001.
The group's North American growth rate was greater than for the 150 largest suppliers of parts in North America, which recorded a 9.5 percent increase to $182.1 billion last year.
Six of the 10 moved higher on the rankings for North American sales: Valeo, Siemens VDO, ZF, Thyssen-Krupp, GKN and Autoliv. Bosch, Faurecia, Continental and Michelin kept their 2001 ranks.
The complete list of the 150 largest automotive parts suppliers ranked on their North American sales can be seen online at www.automotivenews.com. A separate list of the top 30 European parts suppliers will be published in Automotive News Europe's Global Market Data book in the June 16 issue.
The results reflect greater global diversification among European suppliers. ThyssenKrupp and GKN are ranked higher in North America than they are globally, for example. ThyssenKrupp of Bochum, Germany, is No. 15 globally but No. 11 in North America with sales of $2.19 billion in 2002. England's GKN is No. 19 worldwide but No. 15 in North America.
Such diversification is useful when home markets decline. Passenger car production in western Europe dropped more than a quarterof a million units to 14.79 million vehicles last year, a fall of 1.7 percent. For the 10 largest Europe-based auto suppliers, North American sales accounted for 27 percent of revenue.
|Europeans thrive in America|
|Top Europe-based suppliers owe much of their 2002 global sales growth to gains in North America|
|Global Rank||NA Rank||Company||Net gain* ($million)||NA gain** ($million)|
|* Global sales increase in 2002 vs 2001|
|** North American sales increase in 2002 vs 2001|
|(e) Automotive News Data Center estimate|
|Source: Automotive News Data Center|
The burgeoning sales come despite auto manufacturers' relentless pressure on their suppliers to reduce prices.
But automakers are simultaneously outsourcing more parts and more component development responsibilities to Tier 1 suppliers, analysts said. That contributes to the revenue growth among top suppliers.
Robert Hinchliffe of UBS Warburg estimated that last year on average 50 percent of the cost of a vehicle was outsourced to suppliers.
Automakers in Europe, North America and Asia are increasingly using electronic content to differentiate their high-end vehicles. For suppliers of electronics such as Siemens VDO or Bosch, that means higher per-vehicle content and sales growth. Siemens VDO global revenue jumped 46.6 percent to E8.5 billion last year. At Bosch, global parts sales gained $1.17 billion to $19.09 billion, an increase of 6.5 percent.
"A supplier with electronic content and applied technology is likely to grow faster and, frankly, have greater 'curb appeal' with investors," said analyst David Leiker of Robert W. Baird in Milwaukee, Wisconsin, USA.
Consolidation among suppliers has contributed strongly in the past to revenue gains among the major players, but mergers and acquisitions were down sharply in 2002.