Swiss auto parts manufacturers may not be showing off their wares at this year's Geneva motor show.This content was published on March 10, 2005 - 17:12
But even though their products may lack the glamour of the new cars unveiled at the show, the Mercedes, Fords and Toyotas of this world would be empty shells without them.
Due to fierce competition in the car market and efforts to cut costs, carmakers are becoming increasingly reliant on suppliers.
According to a study in 2002 by the Mercer consulting firm, suppliers accounted for two-thirds of all car parts. Ten years from now, the figure is expected to reach 77 per cent.
That and continual advancements in electronics and the higher demands placed on materials has meant that there has been steady growth in the auto parts sector.
"Swiss suppliers are cost and innovation leaders and they are taking prominent market positions," says Mercer’s Jan Dannenberg.
Suppliers design whole areas of a car, build components, test them and pass them on to several car manufacturers.
In terms of value, the manufacturers produce 24 per cent of transmission systems. This will be reduced to nine per cent by the year 2015.
With chassis, the real net output ratio will sink from 31 per cent to 13 per cent.
This development is making suppliers equal partners of the manufacturers.
"We are usually involved very early on in the conception of new models and can bring in our know-how," says Franziska Tschudi, CEO of the Wicor plastics technology company.
While most of the big firms are moving some of their production to countries with low wages, development, research and management are remaining in Switzerland.
"As a location, Switzerland still has its advantages. But for the past ten years we have no longer been making products that require much labour," explains Fritz Gantert, CEO of the Schaffner company, one of the world leaders in electromagnetic compatibility.
Schaffner has high hopes that the greater electricity required by cars will lead to further growth. The conventional 12-Volt battery will be replaced in the not too distant future by a 48-Volt system, therefore increasing demand.
Although the car market is saturated in the industrialised world, many of the cars that are sold come with all the extras; air conditioning, complex airbag systems, navigation tools, infotainment and electronic motoring aids.
Seven out of ten cars in Europe now have air conditioning, with experts saying that will increase to nine out of ten.
The Swiss Saia-Burgess firm is the world leader of step motors for air conditioning and has consolidated its position in the United States with a series of acquisitions.
Saia-Burgess has high hopes of more business with the increasing use of swivelling headlights which function with step motors (the beam follows the steering wheel position).
Another Swiss firm, Komax, is also taking advantage of the increasing use of electronics. Komax controls almost a half of the world market in cable and there’s more and more of that in new cars.
The company’s future could be determined by technical innovations such as space- and weight-saving flat cabling.
Car developers also have to take weight reduction into account. The chassis of newer models in the premium market are entirely made out of aluminium and this trend is set to continue.
"In future I expect very strong impulses from this sector," said Marcel Menet, director of the Swiss Aluminium Association.
swissinfo, Andreas Keiser
The largest Swiss car suppliers
Ems: Electric primers for air bags
Feintool: Metal parts
Georg Fischer: Cast components
Rieter: Acoustics and heat protection
Schaffer: Electro-magnetic compatibility
Saurer: Transmission technology
Sika: Sealing technology
According to new estimates, the Swiss suppliers to the car industry have a total annual turnover of more than SFr7 billion ($5.95 billion).
Suppliers will gain in importance in the industry.
A Credit Suisse First Boston study said in December that Swiss suppliers were "well positioned."
The Geneva Motor Show runs till March 13.
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