A rePort: How is a head- liner actually produced? friedrich ... - polytec

customers we do not have enough power. In projects which are
especially important to us, like the follow up orders for existing
major projects which can fundamentally infl uence our future we
are in a position of weakness. If, for example, we did not get the
follow up order for door casings for the BMW 3 Series, this would
have a profound effect. The customers know it and we know it,
therefore we cannot look them straight in the eye. If we were 5
times bigger than we are today and we lost a contract for EUR 30
to 35 million, our future would not be fundamentally threatened,
but given our current size we are very vulnerable when negotiating
large contracts.
You complain on the one hand that VW Group places enormous
price demands on its suppliers and yet on the other
hand you have recently acquired a sensational new order for
VW Polo. How do these two statements fi t together?
The order from the VW Group was indeed out of the ordinary
not only have we received the production order for the Headliner
for the VW Polo, a high volume model, we have received a further
two orders for Headliners for niche VW vehicles. All three products
are still in development and we have not yet supplied production
parts. We have to believe that VW want POLYTEC to be the supplier,
but we still had to quote aggressively low prices in order to
secure this business from this important customer. There was also
a strategic logic to winning this business as we wished to maximise
the use of our Spanish factory. Despite the low prices we have
some optimism that we can reduce our estimated costs during the
production life and thereby improve our profi tability. This kind of
thinking is both normal and necessary in a production plant, but
up until now it has not been normal for POLYTEC.
“We will expect some
success from our efforts
sooner or later.”
Friedrich Huemer about the price pressure of the VW-Group
Will you modify this aggressive pricing policy in the future?
No, I see it as my own personal task to dictate the strategy in
this area and I will make no modifi cations. Even if I am not personally
involved in the price negotiations you can be sure that in
these special cases I have clearly signalled to the customer that
we will make aggressive prices and that we will expect some success
sooner or later. If I did not take this position it would lead to
a decline in our future involvement with strategic customers.
How would you present your price strategy to other customers?
We will signal to BMW for instance, as our biggest customer,
that we will do anything to satisfy them whether they need follow-the-customer
investments (for example if the X3 were to be
produced in the US) or if they require speculative pre-development
tasks. Those car manufacturers who currently have good
customer-supplier relationships – BMW, Toyota and (with certain
INTERVIEW
19
exceptions) Daimler Chrysler are fully aware that part of their
extraordinary success is due to these successful supplier relationships.
You have recently indicated that your medium term goal is a
turnover of EUR 1 billion. What does the phrase medium term
mean?
By medium term I mean a period of 2-4 years, which might
signify a rather short term for us! I believe that, with an aggressive
approach it would still be possible in our industry to create, by
acquisition, a business 10 times our current size within 5 years.
To do this however, it would be necessary to take high risks, with
high debts or extensive increases in capital. Whilst there are some
attractions in both scenarios I would choose to pursue the expansion
by more prudent fi nancial routes. The take over of a same
size or larger company is for me, not just a wish but more a real
desire.
Following the increases in capital which resulted from last
year’s IPO the war chest is full to bursting.
Full to bursting is relative and others might see it differently.
We are essentially debt free and could fi nance an acquisition with
POLYTEC
ANNUAL REPORT 2006