Grupo Ficosa International

views updated

Grupo Ficosa International

Gran Via Carlos III 98
Barcelona, E-08028
Spain
Telephone: (34 93) 216 34 00
Fax: (34 93) 490 10 63
Web site: http://www.ficosa.es

Private Company
Incorporated: 1949 as Pujol y Tarragó
Employees: 6,550
Sales: EUR 824.2 million ($1.08 billion) (2005)
NAIC: 336399 All Other Motor Vehicle Parts Manufacturing; 333612 Speed Changer, Industrial High-Speed Drive, and Gear Manufacturing; 333613 Mechanical Power Transmission Equipment Manufacturing

Grupo Ficosa International is a global developer and manufacturer of components for the automotive industry. Based in Barcelona, Spain, Ficosa has thrived by focusing on a small number of niche areas, including side-view and rearview mirror systems and windshield cleaning systems. Ficosa is best known for its mirrors, and the company is a global leader in this category, producing more than 20 million mirrors per year. The company's automotive industry production is conducted through four major divisions.

The Command and Control System Division develops and manufactures manual and automatic gearshift systems, parking brakes systems, and door and seat operating systems. Ficosa's Rear-View Systems Division produces rearview and side-view mirrors for automobiles, buses, trucks, and other industrial vehicles, as well as antennas and other components. Among this division's innovative products is a side-view-mirror–mounted "blind spot" alarm system. The Plastics and Electrical Systems Division manufactures washing systems for windshields and headlamps, as well as heating and air-conditioning intact ducts; this division also produces sun visors and fluid reservoirs. The Security and Locking Systems Division develops security access systems, including lock and key sets and antitheft systems, as well as door handles.

More than 70 percent of Ficosa's EUR 842 million ($1 billion) in sales comes from outside of France. Since the 1980s, the company has developed an international network of manufacturing, design and engineering, and sales subsidiaries and joint ventures. The company operates in 18 countries throughout Europe, North and South America, and Asia. This international presence enables the company to supply many of the world's leading automobile companies, including Renault, General Motors, PSA, BMW, Ford, Volkswagen, and many others. Ficosa remains a private company controlled by the founding Tarragó and Pujol families. José Maria Tarragó Fabo is company chairman, while Javier Pujol Artigas is managing director, and José Maria Tarragó Pujol acts as chief executive.

CABLE PRODUCER IN 1949

Ficosa was founded by José M. Pujol and José M. Tarragó in Barcelona in 1949 to produce spare parts for the local automobile market. The company initially focused on manufacturing cable components, and control cables in particular. At the time, the Spanish automotive market itself was still very small, with fewer than 75,000 automobiles in the entire country. Years of civil war, followed by economic isolation (in part because the West shunned the Franco dictatorship for its support of the Axis powers during World War II as well as the Franco government's insistence on self-sufficiency) had left the Spanish economy in tatters. With few resources for new automobile purchases, the market for spare parts remained important throughout the 1950s.

By the middle of that decade, Franco had been forced to recognize the failure of his self-sufficiency program. The Spanish government began enacting a series of economic reforms, including allowing the entry of foreign investment capital. The automobile industry was chief among the industries targeted by the government for growth during this period. Indeed, the automobile industry was later recognized as one of the primary motors for the Spanish economic "miracle" that lasted from the end of the 1950s through the mid-1970s. The success of both the automobile market and Spanish economic policy during the period was reflected in the enormous growth in automobile sales. By the mid-1960s, Spanish roads boasted more than one million vehicles.

Pujol y Tarragó played their own part in the growth of the automotive market. The launch of automobile manufacturing in Spain, including the creation of SEAT, as a Spanish-based subsidiary of Italy's Fiat, represented an important opportunity for the company. Pujol y Tarragó quickly shifted its operations toward the production of original equipment manufacturing for the automotive industry. The company became an important supplier to SEAT, then rapidly expanded its list of customers as other automotive vehicle manufacturers launched operations in the fast-growing Spanish market. Into the 1960s, the company's clients include Citroën, Avia, Imosa, Fasa (part of Renault) and Barreiros. By the 1970s, with the arrival of such global giants as Ford, Peugeot, Nissan, and Mercedes Benz, the company had established itself as a leading components producer in Spain.

The future Ficosa had by then diversified its operations to include a wider range of components. As part of this effort, the company created a number of new, dedicated subsidiaries, including Industrias Technoflex, created in 1972 to supply components to the construction industry. Other subsidiaries included Transpar Ibérica, which produced mirrors and windshield washing systems; Cables Gandia, which inherited the company's cables production; and Technomatic, which developed electric window systems as well as sun visors. These operations were placed under a newly created holding company in 1974. Originally called Serco, the holding company was renamed as Ficosa S.A. in 1976.

GOING INTERNATIONAL IN 1988

Ficosa operations remained almost entirely focused on the Spanish market until the mid-1980s, an exception remained the company's addition of a factory in Porto, Portugal, which produced control cables. In the early 1980s, the company's Spanish operations continued to provide the company with steady growth. This was especially so after the arrival of General Motors into Spain in 1983. When the U.S. auto giant launched production of the Opel Corsa in Spain, Ficosa was tapped as a primary component supplier. By the middle of the decade, the company's sales had more than tripled, rising from 1.98 billion pesetas in 1980 to more than 6.1 billion pesetas. The company had also made some headway in the export market, and by 1986, the company's exports neared 10 percent of its total sales.

Spain's entry into the European Union in 1986, however, provided the company at once with new opportunities and new challenges. Faced with the certainty of increasing competition at home, the company recognized that its survival depended on its ability to expand its sales beyond Spain. As Pujol explained to the Financial Times: "In Spain we were kings, but outside Spain we were nothing. We had three alternatives: to stay as we were, which was certain death; to sell out, which was not our plan; or to go European."

COMPANY PERSPECTIVES

Our products, technology, quality service and shared values make us the preferred choice of our customers. Ficosa International is the supplier chosen by automotive brands throughout the world.

Ficosa signaled its intentions with a change of name in 1987, becoming Ficosa International S.A. The following year, the company launched the first prong of its assault on the European market, by opening technical development offices in France, Portugal, and England. The company backed up its expansion into these markets with a number of investments. The company gained its first manufacturing presence in France through the purchase of Maurice Leroy S.A. in 1989. In 1991, the company expanded its French production capacity with the creation of a new subsidiary, Fico Cipa, which focused on the production of automotive mirrors for the French automobile industry. Similarly, in the United Kingdom, Ficosa spent £3 million in order to build a 21,000-square-foot plant in the town of Tam-worth, in the West Midlands. That plant then launched production of the company's control cable and window washing systems. In 1992, Ficosa boosted its presence in Portugal, creating a dedicated subsidiary for that market and opening a second factory in Tondela. The company also invested in the development of new products, creating a new research and development subsidiary, Fico Triad. That company focused on developing a new generation of automotive gearshift systems.

Yet the company's attempt to penetrate the European market was at first marked by indifference at best, and even outright hostility in some cases. As Pujol described it: "We were greeted first with total ignorance, then contempt, then hate."

Thwarted in its hopes for a rapid expansion into the European market, the company quickly recognized that it needed to adjust its strategy to a global level. The company turned its sights on the North American market, hoping to capitalize on its decade-long relationship with General Motors. The company made its move in 1993, establishing an engineering office in Detroit. At the same time, the company added manufacturing capacity for the North American market, building a factory in Mexico. The company's reception in this market proved a marked contrast to its struggles to establish a presence in Europe. As Pujol explained: "We thought we would face the same difficulties as in Europe, but we didn't. It has been a spectacular success."

Indeed, Ficosa turnover skyrocketed into the mid-1990s, surging past ESP 32.5 billion by 1995. By then, foreign sales accounted for the majority of the group's revenues, at 59 percent of the total. The company's swift penetration of the North American automotive market was underscored by the creation of a new engineering and development subsidiary, Ficosa North America Corporation, formed in 1996.

CONQUERING ASIA IN THE NEW CENTURY

Backed by its success in North America, Ficosa set its sights on wider expansion toward the dawn of the 21st century. The company entered South America in 1997, launching subsidiaries in Brazil and Argentina. The company also targeted expansion into the Asian region, which held several of the world's most dynamic new automobile markets. The company entered India first, forming a joint venture with that country's Tata conglomerate in 1997.

In the meantime, Ficosa had gathered the clout to take on the European market. The company targeted Germany for its newest market in 1999, buying Metallwarenfabrik Wilke. That acquisition gave the company new capacity in the production of mirrors for the bus and truck sectors. Mirrors, including side-view and rear-view mirror systems, played an increasingly important part of Ficosa's operations at the turn of the century. By the beginning of the 2000s, the company had become one of the world's leading producers of automotive mirrors. This position was further boosted in 2000 when the company bought the Mirror Division of Magneti-Marelli, a Fiat subsidiary. That purchase gave the company a network of factories in Italy and Spain, as well as in France, Turkey, Poland, Argentina, and Brazil. Two years later, Ficosa entered Romania as well, creating a joint venture with that country's SC UAMT in order to product components for Dacia automobiles.

KEY DATES

1949:: Creation of Pujol y Tarragó in Barcelona in order to produce spare parts for Spanish automobiles.
1956:: Launch of OEM production for newly emerging Spanish automotive sector.
1974:: Creation of holding company, soon renamed Ficosa.
1987:: Ficosa International name is adopted in anticipation of international expansion.
1993:: Ficosa enters North American market.
2002:: A 79 percent stake in Shanghai automobile mirrors manufacturer is acquired.
2007:: A joint venture with Avtocomponent establishes Ficosa presence in Russia.

Ficosa's move into Romania came as part of the company's efforts to shift parts of its production to lower wage markets. This effort led the company to its next expansion move in 2002, when the company reached an agreement to buy up to 70 percent of Shanghai Benyuan, a major producer of mirrors for the Chinese and other markets. The acquisition, expected to be fully completed by 2006, enabled Ficosa to transfer a number of its existing contracts, including supply deals with PSA and General Motors, to the Shanghai plant. The company also added a new contract there, that of the supply of mirrors for the Volkswagen Polo. In 2004, the company expanded its presence in China again with the launch of a new subsidiary, Ficosa International (Shanghai) Automotive Components, Ltd. The following year, the company expanded its relationship with India's Tata, when that joint venture added a second factory.

By the middle of the decade, Ficosa's sales had topped EUR 825 million and the company had succeeded in establishing itself as a leading global player in selected automotive component niches. The company continued to seek out new markets for further expansion. In 2003, the company formed a joint venture with Fractus, using that company's technology as the basis of the newly formed Advance Automotive Antennas. In 2005, Ficosa took full control of that company, which specialized in developing and manufacturing automotive antenna systems combining radio, Global Positioning Systems, and portable telephone reception.

Ficosa also continued to expand its geographic presence. The company formed a joint venture with Hyundai Corporation, providing it with a manufacturing presence in South Korea in 2005. In 2007, Ficosa entered Russia as well, launching a joint venture with that country's Avtocomponent. Ficosa had successfully negotiated the transition from small-time Spanish company to global automobile components leader, while remaining committed to its family ownership structure.

M. L. Cohen

PRINCIPAL SUBSIDIARIES

Cables Gandia S.A.; China; Ficosa Shanghai (China); Daeshin Machinery Ind. Co. Ltd. (Korea); Fico Cables S.A.; Ficosa Do Brasil Ltda.; Ficosa International GmbH (Germany); Ficosa International Lda. (Portugal); Ficosa International Ltd. (United Kingdom); Ficosa International S.A. (France); Ficosa International S.R.L. (Italy); Ficosa North America Corporation (United States); Ficosa North America S.A. De C.V. (Mexico); Tata Ficosa Automotive Systems Pvt. Lvd.; Tata Ficosa Automotive Systems Pvt. Lvd. (India).

PRINCIPAL COMPETITORS

Robert Bosch GmbH; SH Fundiciones C.A.; Magna International Inc.; Adam Opel GmbH; MAN AG; Continental AG; Faurecia; ZF Friedrichshafen AG; Valeo S.A.; Mondragon Corporacion Cooperativa; Schaeffler KG; Adolf Wuerth GmbH and Company KG.