TRAVERSE CITY, Mich. - Freudenberg-NOK G.P., a supplier known for its automotive seals business, is making a push into the brake hose and noise-vibration filter businesses under its new CEO.
Mohsen Sohi, CEO of the Plymouth, Mich., company, said it might make a small acquisition or two to bolster that effort, but most growth will come internally. Sohi was hired in March as the replacement for Joseph Day, who retired in September 2002.
Competitors in those businesses include Dana Corp., Cooper-Standard Automotive, Woco Industrietechnik GmbH, Hitachi Cable Indiana Inc. and Goodyear Tire & Rubber Co.
Although they are outside the company's specialty of sealing systems, brake hoses and noise-vibration filters such as engine mounts use many of the same materials and manufacturing processes.
While Freudenberg-NOK is No. 1 in brake hoses and No. 2 in noise-vibration on other continents, it's a small player in North America, Allen said.
The business accounted for about 15 percent of Freudenberg-NOK's $807.5 million in total North American revenue for 2002. The company ranked No. 55 on the Automotive News list of top 150 original equipment suppliers to North America, with original equipment sales of $720 billion in 2002.
The goal is to make the brake hose and noise-vibration business unit about 20 percent to 25 percent of revenue within four to five years, Sohi said.
"We don't make mega-acquisitions," Sohi said. "We'll look for a good fit if it will help us, but we have never made a mega-acquisition."
An analyst said companies can be successful in businesses outside their core competency if they are similar enough to its expertise.
"It's a market with similar characteristics where Freudenberg-NOK has been successful," said Kim Korth, president of the Grand Rapids consulting firm IRN Inc. "Over time, you can support the core business with that."
Terry Kosdrosky is a staff reporter for Crain's Detroit Business, a sister publication of Automotive News.