Automotive News Europe - August 2019 - 24

AUTOMOTIVE NEWS EUROPE

SUPPLIERS

Supplier TALK FROM THE TOP

Raising the pressure
Gestamp CEO says EV shift means opportunities and headaches

Our most important target area is China. It represent about 28 to 29 percent
of the global market but only about
10 percent of our sales. We had focused
our strategy on high-end technology and
working with global automakers, but
now there is an opportunity for us because many domestic Chinese companies are moving to premium segments
and to EVs. Last year we signed a joint
venture deal with BHAP, part of BAIC,
and this year we signed a memorandum
of understanding with Wuling.

utomakers are pressuring suppliers more than ever as they ramp
up their investment in electric vehicles.
The industry's shift to electrification
is both an opportunity and a headache
for Gestamp, which dominates the supply of body-in-white and chassis parts in
Europe. CEO Francisco Riberas spoke
about the challenges with Automotive
News Europe Correspondent Nick Gibbs.
Is pressure from automakers getting
worse for suppliers such as Gestamp?
They always push but today the trend is
a bit different. Most important to them
is the need to preserve cash to invest
in connectivity, autonomous driving,
launching new EV platforms. It will take
a lot money out of the business until they
can generate profits, so right now automakers want suppliers to invest more for
them. They want suppliers that are bigger
and are able to do co-development.
Does co-development mean automakers want you to do r&d for free?
Yes. This is always the fight. They want
to do co-development and they want
the best conditions. If we are awarded
the orders, there is no problem. The
problem is when you are doing this research and development and you are
not able to get new orders.
How will the shift to electric vehicles
help Gestamp?
Based on the latest RFQs [requests for
quotations from customers] EVs will have
a very positive impact for us. Batteries
are a real headache for automakers in
terms of price and capacity, so they want
as much range as possible. That means
they need to go further in light-weighting
- more hot-stamping, more aluminum,
more hybrid solutions between steel
and aluminum. EVs' battery boxes are a
structural part for safety in the event of a
crash. We will be a very important partner
in their co-development.
What are the downsides of the shift
to electrified models?
We need to be much more flexible to
cope with level of flexibility demanded
by customers. This level will not be the
traditional 10 percent flexibility [covering unforeseen spikes in demand] but

www.autonewseurope.com

Meet the boss
❚ NAME: Francisco Riberas
❚ TITLE: Gestamp Chairman

and CEO

❚ AGE: 55
❚ MAIN CHALLENGE:

Coping with automakers'
requests for flexibility around
electric vehicle parts amid
uncertain demand.

much more like 30 percent to 40 percent. It implies you need a different way
of working.
Could you explain the reason for this
demand in flexibility?
Probably none of our customers are sure
how fast the market will move to EVs.
For example, we are working with Audi
on their new PPE premium platform for
EVs, but they are not convinced about
how fast these models will sell, so they
will continue with the sister platform for
combustion engines. They then award
you a part that's a similar part to the EVs
but tell you "It's 80 percent combustion
and 20 percent EVs, but I want to have
the flexibility to have 30 percent in case
that I am wrong and demand changes."
Which regions will be Gestamp's
strongest growth areas?

You already have operations in China.
Why do you also want JVs?
In China it's always convenient to have
a good partner. And in terms of financing, what we want to do is quite aggressive. We need to grow in China
and at the same time keep our financial profile, so one of the ways to do so
is to have a partner.
What factors contributed to Gestamp's
30 percent rise in first-quarter revenue
in North America?
We invested quite heavily there in the
last three years and now all these projects are ramping up. For example, we
have had full replacement for our business in South Carolina for BMW with
the launches of all the SUVs. This is
also true for Daimler in Alabama. We invested in a very important program for
Fiat Chrysler in Upper Michigan for the
launch of the Dodge Ram and invested
heavily in supporting the manufacturing
of the VW Atlas SUV in Chattanooga.
We also invested a lot in Mexico.
You now have 91 hot-stamping lines
globally. Does this make you the biggest player?
Overall it's difficult to say. Magna is our
big competitor, but they are not just
producing metal components. When
they disclose data for metal parts they
are mixing things, but we feel the size
of Magna in metal components is probably similar to ours. But they are much
more focused on North America and a
big part of their business is frames for
pickups, which is not our most important market. We are stronger in Europe
and South America. ANE

AUGUST 2019

http://www.autonewseurope.com

Automotive News Europe - August 2019

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