PARIS – French auto logistics company Groupe STVA needs to expand through acquisitions to cope with the flood of cars being shipped from new and expanded plants in central Europe.
“We expect flows to increase from the east to the west,” said Sylvie Charles, chairman of STVA’s executive board. “We are ready to grow.”
STVA is a good example of the growth potential for the entire auto industry as a result of the boom in vehicle production in central Europe.
STVA is looking for acquisitions in the E50 million to E100 million bracket, Charles said during a press briefing here.
She said it should not be too difficult to find candidates to buy as the logistics industry is still largely composed of family-owned businesses that are ripe for consolidation.
STVA transports cars to western Europe from a number of plants including Renault’s factory in Novo Mesto, Slovenia, and Fiat’s plant in Tychy, Poland.
Charles says the company will bid for two transport contracts in Slovakia, one with PSA/Peugeot-Citroen’s plant in Trnava, the other with Kia’s factory in Zilina.
If it wins the PSA job, it will work for logistics firm Gefco, which is a PSA subsidiary.
In 2004, a total of 900,000 cars were exported from east to west compared with 400,000 vehicles from west to east, according to STVA. By 2010, east-to-west exports are forecast to reach 1.3 million and west-to-east shipments are expected to hit the 700,000-unit mark.
Production capacity in central Europe is expected to grow to 3.8 million units by 2010 from 2.2 million units last year, according to analysts CSM Worldwide and Global Insight.
Automakers such as Volkswagen group’s Skoda subsidiary, PSA, Toyota, Renault and Kia are either building new plants in central Europe or expanding capacity to take advantage of low-labor costs there.
STVA is France’s largest independent logistics supplier for finished cars, with 2.8 million vehicles transported in 2004 and revenues of
The company is about half the size of UK-based AutoLogic, the largest independent provider of logistics for finished vehicles. AutoLogic transports about 4.5 million cars a year and last year had sales of £667 million (E994 million).
STVA, which is 67 percent owned by the French national railway company SNCF, is already operating in nine European countries, directly or through partnerships.
In 2004 STVA carried 1 million vehicles by rail and 1.8 million by road for 22 carmaker clients including General Motors, Ford Europe, Renault, PSA, the Volkswagen group, Nissan and Kia.
STVA also has contracts with PSA’s Gefco and Renault’s former logistics arm, CAT, which was sold four years ago to a consortium led by AutoLogic.
Besides transporting cars, STVA also prepares cars – 600,000 units a year – for distributors and short-term rental companies such as Avis, Europcar and Hertz. It has workshops where cars are modified to the specifications of individual clients.
Said Charles: “We want to do more of that for small utility vehicles.”