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May 05, 2004 12:00 AM

European suppliers pursue more Japanese business

ERJ Staff
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    By Bradford Wernle Automotive News Europe

    Gothenburg, Sweden-European suppliers are seeking more business with Japanese automakers because the parts makers believe the Japanese are the best business partners.

    A record number of European suppliers came here for a conference staged jointly by CLEPA, the European auto component suppliers association, and JAMA, the Japanese Automobile Manufacturers Association.

    Last year Japanese automakers spent nearly Euro8000 million on parts from EU suppliers, about twice as much as they purchased eight years ago.

    At the same time, supplier relations with some US and European carmakers have deteriorated, recent surveys show.

    Japan's share of Europe's auto market is soaring. Through the first three months of the year, the Japanese share of new-car sales grew 16.4 percent to 540 744 units in Europe. Only the Koreans gained more.

    For European suppliers the rapid growth means increased sales to companies that they say value their technical competence and treat them fairly.

    "If we look at our relationships with Japanese OEMs, they do some things right," said Jürgen Harnisch, departing president and CEO of ThyssenKrupp Automotive and a former president of CLEPA.

    "They make long-term decisions. They follow suit. Once they make a decision, they stick with it," Harnisch said. "They don't make late changes. Once you've made a decision, they don't ask for price decreases."

    Joachim Gelhaar, sales division director for vehicle lighting supplier Hella, said: "There are a lot of good reasons to believe every one of the Japanese manufacturers will be a winning team."

    A record 122 Japanese purchasing executives came to Gothenburg as part of the JAMA delegation. There was also a record number of European suppliers-representing about 100 companies from 18 different countries, even some from Russia and Monaco.

    The conference is designed to achieve real results by putting Japanese OEM purchasing executives together in face-to-face meetings with sales representatives from European suppliers. A record 266 such meetings were scheduled.

    The Japanese automakers, previously restrained by import quotas, see a big opportunity to grow in Europe.

    At about 17 million vehicles annually, the European market is roughly the same size as the North American market, but the Japanese are much further ahead in their penetration of North America. They aim to make up some of that ground in Europe, and they want to increase their spending on European-sourced parts.

    "We want to produce the kind of vehicles people wish to have," said Teruyuki Minoura, chairman of the JAMA purchasing committee and senior managing director of Toyota.

    "If we wish to have cars produced in the locality, we have to have parts produced close to production," Minoura said. "The European Union is well-known for suppliers having very high quality standards."

    Tom Johnstone, CEO of Swedish bearing manufacturer SKF, said he hopes the 200-plus face-to-face meetings between suppliers and Japanese OEMs prove beneficial.

    "Meetings and discussions are good and necessary," Johnstone said, "but they must lead to results."

    Purchase of EU-made parts by Japanese automakers, 1995 vs. fiscal year ending March 31, 2003

    1995 E3.9 billion

    2003 E7.9 billion

    Purchase of EU-made parts by Japanese automakers, fiscal 2003

    E6.8 billion -- to Japanese plants in Europe

    E1.1 billion -- to plants in Japan

    Sales of Japanese vehicles in Europe

    1990 1.49 million

    2003 2.03 million

    Production of Japanese vehicles in Europe

    1990 0.2 million

    2003 1.3 million

    Source: Japanese Automobile Manufacturers Association

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