Here's one hint that you're dealing with an international auto parts maker: when a German-based supplier moves its French-born head of its North American operations to run its newly acquired subsidiary in South Korea, and taps a Brazilian executive to replace him.
For Ludwigsburg, Germany-based Mann+Hummel GmbH, the maneuvers are part of a global growth plan that involves expanding into new markets while developing new products for existing customers.
``We want to speed up the implementation in our worldwide organization,'' President and Chief Executive Officer Dieter Seipler said in an Aug. 13 interview, at the auto industry's Management Briefing Seminars in Traverse City. ``You cannot make business just out of North America or Europe.''
In July, the maker of injection molded air-intake manifolds, oil filters, air filters and other functional auto parts completed the acquisition of Dongwoo Co. Ltd. of Munmak, South Korea, adding to a corporate profile that took in 1.6 billion euros ($2.5 billion) in global sales in 2007.
Claude Mathieu, who led Portage, Mich.-based U.S. subsidiary Mann+Hummel Automotive Inc., has moved to South Korea to oversee the new unit, Mann+Hummel Dongwoo. Francisco Gomes Neto, chief executive officer of Mann+Hummel Brasil Ltda. in Indaiatuba, Brazil, will take over North American operations in November.
Seipler said the company hopes close contacts with Korean automakers like Hyundai Motor Co. and Kia Motors Corp. in their home countries will give Mann+Hummel an inside track for those companies' global cars.
Suppliers need to be everywhere today to expand with key customers, Seipler said. Each region plays a role globally.
As South America's largest economy, for instance, Brazil always has been a focus for potential growth. But in the past few years, the country has taken off, Gomes Neto said. That has made a big impact on the auto industry, with car sales growing 20 percent each year, aided by 60-month financing options now available in the country.
``More people have access to cars, and the potential is huge,'' Gomes Neto said.
Brazil has benefited from its mining and natural resources as prices for raw materials such as iron ore and bauxite have increased. The country hit the economic jackpot late last year when the oil industry discovered an underwater oil reserve off the coast, holding as much as 8 billion barrels of crude. That has helped bring Brazil a new stability.
``Because of the new source of oil, and the [ethanol] flex fuel industry, we don't need to import oil anymore,'' Gomes Neto said.
At the same time, the auto industry can use Brazil as a key in producing cars that should sell well in other developing countries, Seipler said.
``Emerging markets like India are closer to Brazil than to the U.S. or Europe,'' he said ``There have been some complaints that if you develop a car in the U.S. or in Germany, that it's always too expensive.''
Brazilian engineers know how to build small, simple, inexpensive and robust cars that the masses can afford, Gomes Neto said. That gives them an edge in meeting the demands of customers in those regions.
``The local demand asks for a simple car, not for the sophisticated German model,'' Seipler said. ``They know how to make them.''
Mature markets like North America and Western Europe, meanwhile, are primed for expansion in new auto parts, such as the thermoplastic oil pan that Mann+Hummel will begin producing in 2009.
Growth is not limited to emerging markets, Seipler said. The company may want to build a new plant in the southeastern United States within the next few years to locate manufacturing near European and South Korean automakers building cars there.
``If you do not distribute your risks in terms of customers and regions, you never know what will happen with the exchange rate, for example, or the local economy,'' he said. ``I think it's a good policy to have this global footprint and not just bet on one horse.''