European bumper market faces shakeup

By Colin Whitbread, Automotive News Europe

London-The auto industry's bumper sector appears set for a shakeup as buyers compete to take over two of Europe's market leaders.

Venture Holdings Co. LLC of Fraser, Michigan, has a major slice of its European Peguform operations for sale. Dynamit Nobel, Europe's No. 3 bumper supplier, has been put up for sale by its parent company, mg Group.

Dynamit Nobel supplies General Motors' Bochum, Germany, plant and makes bumpers for the Mercedes-Benz A, E and S class. Its latest contract is for new multifunctional bumpers systems for the BMW X3 SUV that will go on sale in the US in February.

Potential buyers of the two businesses include existing bumper suppliers, other components companies and private equity firms.

But one bumper supplier, Decoma International Inc. of Concord, Ontario, appears content to stay on the sidelines.

Decoma announced an initial 10 million euro bid - about $10.8 million - for Peguform France's bumper operations in January 2003. One month later, the bid was withdrawn.

Decoma officials reviewed and rejected two more potential acquisitions during a board meeting in November. Alan Power, Decoma's CEO, said the company had to make improvements in Europe, but acquisitions are a low priority.

Plastal, a minor player in Europe but a key supplier to Volvo, unsuccessfully pursued Peguform France.

But Plastal is one of three suppliers and three private equity firms that are believed to be interested in Peguform Germany.

Bumpers are an increasingly important area on vehicles as carmakers add extra equipment such as parking assist systems and develop new functions such as self-deploying front spoilers.

They are also vital in new passive pedestrian safety systems.

Managers at Venture's Peguform subsidiary in Germany filed for insolvency in May 2002, blaming the US parent for financial difficulties.

Peguform was subsequently declared bankrupt in October 2002 despite a bailout organized by such key customers as DaimlerChrysler, Audi, BMW and Porsche.

Administrators currently run the operation. European plants outside of Germany were unaffected at first but that didn't last.

Peguform France filed for insolvency in October 2002. Venture Holdings filed for Chapter 11 protection in the US in March.

Top suppliers

European bumper market shares

Venture Holdings: 28%

Plastic Omnium: 15%

Dynamit Nobel: 13%

Decoma: 10%

Faurecia: 8%

Collins & Aikman: 5%

Compla: 4%

Plastal: 3%

Others, including automakers: 14%

Source: Decoma