Swiss High-Tech Suppliers Drive Auto Industry

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By Andreas Keiser

Over the next ten days hundreds of thousands of car fans will be making their annual pilgrimage to Geneva for the 82nd International Motor Show.

But as they stroll through the packed halls and ogle at the glitzy selection of new models, few will probably be aware that Swiss technology is packed away under the shiny bodywork.

“Switzerland doesn’t produce complete cars. Parts manufactured by Swiss suppliers are concealed within the system and are therefore less visible,” Anja Schulze, head of the Centre for Automotive Research at Zurich’s Federal Institute of Technology (ETHZ), told swissinfo.ch.

“You can’t mention the fact – like Intel does on computers – that ‘this car has Georg Fischer technology inside’.”

Swiss suppliers are active in different sectors of the car industry and the list of manufactured parts and components is extensive: from simple screws to crankshafts, automatic systems, protective coatings, hi-tech cables, steering systems, throttles, electronic and special aluminium components.

Today’s car engineers face numerous challenges getting a new vehicle onto the market: greater energy efficiency, lower emissions, new drive technologies, better security and integrated mobile phone and computer technologies.

Saving weight is a key objective requiring lighter materials that guarantee similar – or even better – vehicle stability.

“This is an extremely high-tech field and requires considerable research,” said Schulze. “The development of these kinds of parts will enable the Swiss industry to stand out in the future.”

Major employer

The Swiss auto parts industry currently comprises 310 firms, employing 34,000 staff. By comparison, the Swiss watch industry has 50,000 staff.

The difference in public profile between the two can be explained partly by the fact that “most car suppliers carry out other activities”, said Schulze.

“They are also active in fields like medical technology or textile machinery,” she added.

As well as advanced electronic and lightweight components, many Swiss firms also produce huge quantities of cheap auto parts, as a 2008 ETHZ study revealed.

“We wanted to know exactly what happens in this branch. As there were no figures we decided to look into it ourselves,” said Schulze. “There is no umbrella organisation in Switzerland for the car industry like there is in Germany. But eventually we managed to collect the figures.”

Survivors

At the time of the study Swiss auto suppliers, like the industry as a whole, were hit by the economic crisis.

“Swiss suppliers managed to come through the crisis quite well as they owned a relatively high percentage of their own capital,” said Schulze. Very few firms had to shut up shop and numbers have remained stable.

Since then orders have come flooding in.

“Suppliers have difficulty organising their staff to meet the demand from manufacturers. No one imagined that the recovery would be so quick and so strong,” she said.

Signs that the crisis is definitely a thing of the past have been confirmed by business results for 2011.

“The auto sector grew faster than our other two sectors of activity,” said Beat Römer, spokesman for Georg Fischer AG, adding that innovations in lightweight components had stimulated growth.

Know your customer

Schulze said interest in Swiss mass-produced car parts, as shown in the study, was due to their quality and high precision.

But she doubted whether Swiss suppliers and their more expensive parts could stay ahead of Asian competitors in the long run.

The ETHZ survey also revealed that several suppliers did not know in which cars or models their parts were fitted.

“When a supplier delivers directly to a car manufacturer, it’s not a problem. But from a strategic perspective it becomes risky when a firm delivers electronic or mechanical parts to another supplier. They don’t know which client they depend on and cannot react when they face problems,” said Schulze.

Yet various studies forecast excellent future growth for auto part suppliers. Projections are based on the rapid increase in the number of electronic components integrated into modern vehicles and higher demands on materials in terms of weight, strength of car seats and paint coatings, for example.

Meanwhile, competition between car makers has become ever more fierce, forcing them to continually improve new models to adapt to the latest technologies and lower costs.

Firms can no longer develop and produce all the parts they need for their vehicles but increasingly turn to suppliers like those based in Switzerland.

(Translated from German by Simon Bradley)

SwissInfo

swissinfo is an enterprise of the Swiss Broadcasting Corporation (SBC). Its role is to inform Swiss living abroad about events in their homeland and to raise awareness of Switzerland in other countries. swissinfo achieves this through its nine-language internet news and information platform - www.swissinfo.ch.

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