DETROIT – MBtech Group is moving ahead with its strategy to win contract engineering and consulting work outside its German parent company, and the downsizing in Detroit could boost the supplier’s prospects considerably.

Daimler AG created the Mercedes-Benz technology division in 1995 to assist as its vehicle portfolio was expanding within the Mercedes brand and to include new offerings from 18-wheel heavy-duty trucks to the Smart minicar.

But in 2000, after Daimler’s 1998 acquisition of Chrysler Corp., MBtech, based in Sindelfingen, launched a corporate initiative to expand its customer base beyond Mercedes and other DaimlerChrysler brands and to new regions worldwide.

That strategy included opening a test track in Laredo, TX, and MBtech’s North American headquarters in Troy, MI.

While 2008 began a severe downturn for U.S. auto makers, MBtech President Hartmut Tresp has a different perspective.

“Last year was our best year,” he tells journalists here at this week’s SAE World Congress. The company reported 2008 global sales of E360 million ($471 million).

Auto makers outsourcing additional engineering work to companies such as MBtech and seeking consulting services have helped boost the supplier’s bottom line, Tresp says.

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As downsizing continues, engineering services should be in high demand as the vehicle market recovers and leaner auto makers seek to fill the pipeline with new product. At least that’s the model that drives MBtech into the future.

MBtech now employs 120 people in the U.S., where operations include a manufacturing engineering facility in Tuscaloosa, AL, Tresp says. The Troy headquarters employs 100 people.

Globally, MBtech has opened similar facilities in Beijing, Shanghai and the Czech Republic.

The supplier works in four sectors: powertrain, vehicle engineering, electronics and consulting.

In 2007, MBtech completed a Lightweight Body research project with Chrysler LLC, the American Iron and Steel Institute and Mercedes Group Research.

Newly developed high-tensile steels substantially reduced the weight of the vehicle body while maintaining noise, vibration and durability characteristics.

In the area of powertrains, MBtech conducted a feasibility study for a U.S. auto maker that proved one of the company’s diesel engines could comply with the stringent Euro5 emissions standards.

MBtech also has played a role in Mercedes’ development of a testing facility in Ann Arbor, MI, for hybrid-electric vehicles. The supplier says it is working on a number of HEV programs currently for various customers and has completed a hybrid project for small trucks.

Daimler retains its 100% ownership of MBtech today. Globally, the supplier derives 80% of its revenues from Daimler Group companies, such as Mercedes. In the U.S., 60% of sales comes from outside Daimler, Tresp says.

tmurphy@wardsauto.com