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AUTOMOTIVE SWEDEN
NEWSLETTER
More can be done - and done better
International Automotive Components (IAC) has been travelling a rough road the last few years in Sweden. From six development and production units to three. From 6 million in turnover to 2. From 2,300 employees to 1,000. But now the journey is at an end, and after some major reconstruction efforts, the company has achieved a good structure, good organization and good volume.
It was a relaxed and positive Marcus Nyman I met at IAC's  offices in Göteborg. The offices are situated directly above the production unit, and during the meeting, we could look down at the machines and the people working. The open-plan office felt a bit crowded, something that Marcus was quick to confirm. "We don't have enough offices and workrooms here and need more office space." Uniting and focusing business activities was an important element in the reconstruction process. There is a large overcapacity in the industry and IAC was no exception. To gain control and get a grip on costs, and to reach a good profitability level, IAC decided to keep as much in-house as possible with a "seed-to-loaf" production concept. They work with as few subcontractors as possible and manufacture many of the ingoing components. They've also focused business activities in Sweden to Färjelanda, Skara and Göteborg.

In addition the the reconstruction initiatives necessitated by the recession, IAC has also expanded its activities from a position of enormous dependence on the passenger car sector to a move into the heavy vehicle sector. In 2006, only 5% of turnover was connected to the heavy vehicle sector. Today, that figure is closer to 20%. This is a very positive development, according to Nyman, who adds that they have been very successful in this strategy.

IAC has been one of the suppliers most closely linked to Saab Automobile, who was responsible for 15% of the turnover. The fact that Saab is now boasting a production figure of 1,000 vehicles a week is extremely positive, says Nyman. - "The standstill was not good for anyone. If Saab can generate long-term employment, IAC will be able to offer a competitive structure that can bring positive results," says Nyman.

Unfortunately, however, he doesn't feel that the industry has learned its lesson during the recession. There are far too many subcontractors. We should have discovered more solutions and been more aggressive during the recession. And in Nyman's opinion, automakers should have been more proactive.

What is needed to preserve the Swedish automotive industry? What insight should we be bringing with us from the recession?
The financial crisis has created a better and closer relationship between customers and suppliers. We are all in the same boat and we've reduced the number of one-sided partnerships.  We now have a greater chance for symbiosis and it is important to build upon and strengthen this. But, as Nyman concludes, "We can do more, of course. And we can do it better."

Malin Norén
Automotive Sweden

maj 18 2010
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