Spain’s Gestamp surged when main rivals slumped

Spanish supplier Gestamp will continue along the growth path it started down when the auto industry was hit by the last financial crisis.

Instead of retreating when the global economy went into meltdown after Lehman Brothers collapsed in September 2008, Spain’s biggest supplier went on an expansion spree that has boosted its operations in markets as far apart as Germany and China.

“We used the crisis as an opportunity to grow,” Gestamp CEO Francisco Riberas told Automotive News Europe sister publication Automobilwoche.

Gestamp’s expansion has been fueled by acquisitions in Germany and expansion into China. It bought German supplier Edscha’s hinge business in 2010 and ThyssenKrupp’s metal-forming division in 2011. Riberas expects this year’s growth to be organic.

In December, Gestamp opened a chassis innovation center in a former ThyssenKrupp complex in Bielefeld, Germany, to design and test chassis prototypes for global automotive platforms. The investment is part of its goal of deepening its role as a strategic supplier to German automakers. Buying ThyssenKrupp’s metal-forming division, also in Bielefeld, helped the company to “significantly increase our expertise in the chassis area,” Riberas said.

The acquisition of Edscha’s hinge business gave the company a strong position in automatic opening systems for hoods and trunk lids that are now mainly offered on SUVs and other large vehicles. Here Riberas expects the trend to be as strong as the spread of power windows 25 years ago. “In the future, we hope to be able to offer still more systems for all types of vehicles,” he said. Gestamp has spent 111 million euros on its six German factories over the past four years.

Riberas said most of this year’s growth will come from China where the supplier has built substantial business in the past six years from nothing. “In 2015, we want to achieve about 700 million euros in revenue in China. We were at zero in that country in 2008,” he said.

Southeast Asia prospects

Gestamp is now looking for growth opportunities in countries such as Indonesia, Vietnam, Thailand and the Philippines. “These countries are currently dominated by Japanese automakers. So you need contacts with Japanese car manufacturers to be successful in Southeast Asia,” Riberas said about the region, which has more than 400 million people. Affordable vehicles and pickups are primarily in demand in this fast-growing part of the world. “That means we must proceed differently there than we are proceeding in China,” he said.

Riberas expects the group’s automotive business revenue to grow by 10 percent this year to between 6.8 billion and 6.9 billion euros.

The company forecasts that 2014 sales will be about 6.25 billion euros, an increase of nearly 10 percent over 2013. In 2009, the peak year of the crisis, the supplier was still at about 2 billion euros in revenue. The automotive division contributes about three-quarters of the company’s revenue.

Gestamp’s main products include metal components for vehicle bodies, such as roofs and fenders. It also produces front and rear axles and mechanisms such as door holders. “Our main focus is on steel as a material, but we also work with other materials such as carbon and aluminum,” Riberas said.

Gestamp has opened 18 new factories since 2009 and now employs 32,000 people at 93 plants around the world. The company ranked No. 27 on the Automotive News Europe list of the top 100 global suppliers based on worldwide sales to automakers in 2013.