Structural Adjustment in the Automotive Parts Industry

Summary

The automotive parts industry is experiencing a wave of structural adjustments, with key players like the Volga Automobile Plant and BorgWarner making strategic moves to enhance their operations. This article explores the specifics of these adjustments, including new engine production plans, strategic partnerships, and significant business transactions. Discover how these changes are set to impact the industry and what it means for the future of automotive manufacturing.

Volga Automobile Plant's Strategic Moves

New Engine Production for Renault-Nissan Alliance

The Volga Automobile Plant, located in Togliatti, Russia, is making significant strides in its collaboration with the Renault-Nissan Alliance. As part of this partnership, the plant plans to supply a new batch of 1.6-liter displacement engines to the Autoframos car factory. This move is part of a broader strategy to enhance the production capabilities and product offerings of the Volga Automobile Plant.

Investment and Production Details

• Investment: Approximately €220 million has been invested in this project.
• Production Capacity: The plant aims to produce around 300,000 units annually for the first two engines, with a third engine expected to increase production to 450,000-500,000 units by 2015.
• Engine Specifications: The new engine will have a power output of 120 horsepower and will be installed in C-Class models.

Shareholders' Meeting and License Agreement

On June 28, 2012, the shareholders of the Volga Automobile Plant approved amendments to the license agreement signed with Renault in 2008. These amendments address various production issues, including the gearbox and two gasoline engines on the BO platform.

Impact on Autoframos Car Factory

Experts believe that supplying chassis to the Autoframos car factory will improve its sales and capacity utilization. The chassis quality meets Renault's standards, ensuring that the brand's image remains unaffected.

BorgWarner's Strategic Sale

Sale of Beru Spark Plug Business

BorgWarner recently announced its decision to sell its Beru spark plug business to the U.S.-based Mogul Group. Although the specific transaction amount was not disclosed, the sale is expected to have significant financial implications.

Financial Impact

• Pre-Tax Loss: BorgWarner anticipates a pre-tax loss of $50 million to $60 million due to the sale and related restructuring activities.
• 2011 Sales: The Beru spark plug business generated $80 million in sales in 2011.

Production and Market Impact

• Production Facilities: The sale includes Beru spark plug factories in France and Germany.
• Market Reach: Beru spark plugs are used by European original equipment manufacturers (OEMs) and in the automotive aftermarket.
• Mogul Group's Production: Post-acquisition, Mogul expects to produce over 350 million spark plugs annually.

Shenyang City's Auto Parts Testing Platform

In Shenyang City, the Academy of Sciences has made substantial progress in developing the Dadong auto parts public testing service platform. This initiative aims to enhance the quality and reliability of auto parts through rigorous testing and research.

Key Details

• Team Composition: The project involves a full-time business team of 14 people and a part-time R&D team of 22 members.
• Facilities: The testing and laboratory facilities cover an area of 1,377 square meters and house 250 sets of equipment worth 40 million yuan.

Conclusion

The structural adjustments in the automotive parts industry, exemplified by the strategic moves of the Volga Automobile Plant and BorgWarner, are set to reshape the landscape of automotive manufacturing. These changes highlight the industry's focus on enhancing production capabilities, forming strategic partnerships, and optimizing business operations.

For more insights into the automotive industry, you can explore Automotive News and Reuters.

Sources:

1. "Volga Automobile Plant's Strategic Moves," Interfax News Agency.
2. "BorgWarner's Sale of Beru Spark Plug Business," Reuters.
3. "Shenyang City's Auto Parts Testing Platform," Local Government Reports.