LONDON-Avon Rubber P.L.C. is concentrating its efforts on the automotive sector through growth and mergers, according to CEO Steve Willcox. The company expects its sales to the automotive sector to increase to 50 percent from 40 percent of group sales during the next few years.
To help achieve this, Avon is in the final stages of forming a joint venture with Indian automotive component supplier Gold Seal Engineering Products Pvt. Ltd., and is ``actively seeking joint ventures in China and South America,'' Willcox said.
The Indian venture is all but signed, he said. ``Our engineers are out there already installing equipment and we have orders from Ford (Motor Co.) which wants deliveries to start by early 1997.''
Avon also recently bought out its former partner in the Avon-Clevite joint venture and now can sell those vibration control components throughout the world, rather than only in Europe.
Having a strong global presence gives Avon an edge, he said.
``We are not the biggest supplier, but we aim to be important to our customers,'' he said. ``Size is one element, but geographic presence is also a factor. We have full-service R&D and use low-cost manufacturing sites.''
Willcox was referring to a new Avon hose-making plant in Portugal. The firm also has plants in the Czech Republic and France as well as the United Kingdom and the U.S.
The chief executive said he expects to use production at the lower-cost sites to supply customers in the more expensive markets.
Willcox noted a major difference between U.S. and European markets.
``We see more value per vehicle going into North America, but there is more value for fewer suppliers,'' he said. ``In Europe the pattern is more product oriented, so the orders tend to run with each model.''
Another difference is the technological push.
In North America, the customers are driven by such things as emission controls, which isn't as highly developed in Europe, he said. ``When those requirements come to Europe, we will be ready.''