Winterthur, Switzerland-Rieter Group, which makes automotive acoustic systems and textile machinery, achieved double-digit growth in sales and orders received in 2006. Order intake increased by 21 percent in 2006 to SwFr3904 million ($3142 million) and sales by 15 percent to SwFr 3580 million, said the Winterthur-based group.
Rieter's 1 Feb results statement said that the global economy "developed well in 2006," although economic momentum in the US slowed, especially in the second half of the year. "Growth remained vigorous in Asia and accelerated significantly in Europe," Rieter commented.
The emerging "dynamically expanding markets" of China and India also raised global economic activity in 2006, said Rieter.
In automotive, Rieter's sales rose by 7 percent to SwFr2179 million, in a market where global production in 2006 rose by some 4 percent to 68.7 million vehicles, Rieter said, with emerging markets in eastern Europe, Asia and South America recording "striking growth." Output declined, however, in Rieter's main markets of North America and western Europe. Meanwhile, Japanese and Korean manufacturers continued to expand capacity worldwide, Rieter commented. Growth was almost entirely organic, the group added.
Sales trends differed in the division's two main markets, the group said, pointing out that Rieter achieved growth in western Europe despite a negative trend in vehicle output overall, and especially among French car makers. Rieter's positive sales trend "was based on the market success of a large number of models," for example, in Italian brands.
Tooling sales to vehicle makers also added to Rieter Automotive's results. Declining output by US manufacturers was the main reason for Rieter's lower North American sales.
Rieter also pointed out that its large customers "lowered vehicle production at short notice in the second half of the year to reduce car dealers' high inventory levels."
The group also thinks high fuel prices cut into demand for pick-ups and heavy off-road vehicles. Japanese OEMs in North America also slowed production growth slightly, and Rieter said its major delivery programmes there only came on stream in the autumn.
To participate in the transfer of vehicle plants to low-cost countries, Rieter said, it has expanded capacity further in Poland, Brazil and China. The group said it has also "secured access to the rapidly growing Indian automotive market by raising its interest in a former Indian licensee to 100 percent."