Winterthur, Switzerland -- Automotive acoustics supplier Rieter Group saw a "decline in demand that was unprecedented in its intensity and rapidity," in the 2008 financial year, and said that, for the first time, this affected both its textile machinery and its automotive supply business simultaneously.
Orders received by Rieter over the year dropped by 37 percent compared to 2007, largely in textile systems, which saw a 68 percent drop, while automotive orders were only 14 percent down. A 20-percent decline in consolidated sales to CHf 3142.5 million ($2718 million) was less steep than the drop in new orders, the group said.
The declining business trend in the first half of 2008 continued and intensified in the second half, as a result of the global financial crisis and economic downturn, said Rieter, whose automotive acoustic division uses polyurethane foam in many of its carpets, underbody and other parts for sound and vibration damping.
Nevertheless, Rieter said that despite the difficult overall economic environment it succeeded in maintaining - or in certain regions even improving - its market position in both divisions.
Global vehicle production dropped "for the first time in years," Rieter pointed out, dipping to 68.5 million vehicles from 70.3 million the year before.
High North American fuel prices, plus cyclical and structural problems suffered by the automotive industry, resulted in a sharp fall in vehicle production in H1 of 2008, and then in autumn the downswing also started to affect manufacturers in Europe, Asia and South America, the acoustics supplier said.
Automotive production dropped in both Rieter's main markets: in North America by 16 percent and in Western Europe by more than 7 percent. Rieter also pointed out that all major heavy commercial vehicle makers "recorded massive reductions in output as of mid-2008," and this also affected the Asian growth regions.
After years of steady growth, Reiter's sales into the automotive sector dropped 14 percent to CHf 2022.1 million in 2008 (in local currencies sales were 10 percent lower).
But Rieter said that, despite this difficult business environment, its automotive division maintained its market position "by virtue of its broad-based customer portfolio and its innovative product offer."
PIC: Examining an underbody shield at Rieter Automotive Systems facility in Sevelen, Switzerland."