Equip Auto Stresses Internationalization

More than 2,000 exhibitors from 56 countries are jammed into six halls of the Paris-Nord Exhibition Center for six days in the City of Lights, and despite a sagging local market, no one appears interested in throwing in the towel just yet.

But as the automotive market of Western Europe goes, so goes Equip Auto, a giant every-other-year auto supplier trade expo held in October: Show organizers stress internationalization and innovation as a means of turbocharging growth.

Automotive suppliers display components and services as diverse as the world itself, and show organizers are happy 70% of the 2,100 exhibitors are not French companies.

On the same floor as booths from well-known Tier 1s such as Robert Bosch GmbH, Federal-Mogul Corp. and Valeo SA are displays featuring heat exchangers from Columbia, plastic fascias from Egypt and aluminum engine blocks and a host of other products from Iran.

Argentina, Turkey and Morocco also have significant pavilions, alongside big players such as China, India, Korea and Brazil — and that's just Building 6. The other five buildings are focused on areas such as body repair, the aftermarket and recycling.

To U.S. visitors, the large presence of Iranian and North African companies is a bit surprising, but France and auto makers PSA Peugeot Citroen and Renault SA have long-standing relationships with these regions.

Iran is a significant supplier of components to both auto makers, and the Renault Nissan Alliance is building a major new low-cost assembly plant in Morocco that eventually will produce up to 400,000 units annually.

Imagine Detroit's SAE International World Congress exhibition rolled into Automotive Aftermarket Industry Week held in Las Vegas every fall (which includes the Specialty Equipment Market Assn. show and the Automotive Aftermarket Product Expo), and you get the flavor of this exhibition.

Only here, female models handing out brochures at the booths are more likely to be wearing burkhas than bikinis.

Equip Auto 2007 was expected to draw about 130,000 visitors this year even though Western Europe's vehicle market — including France — is struggling.

That number dwarfs the 35,000 visitors the SAE World Congress attracted last April in Detroit and is larger than the 115,000 AAIW drew to Las Vegas in 2006. Still, Equip Auto President Armand Batteux does not try to sugar-coat the near-term automotive outlook for Western Europe.

Innovation and internationalization are the keys to future growth, Batteux emphasizes, both for Equip Auto and the auto industry at large.

Tomorrow's leading auto suppliers need to focus more on the industry's constant structural growth rather than regional economic conditions, monetary fluctuations and soaring raw material costs, Equip Auto organizers argue.

While growth of global automotive production has been uneven, it still has increased steadily, rising from 48 million vehicles in 1995 to more than 69 million in 2006, organizers say.

A billion vehicles are predicted to be on the world's roads next year.

The rate of vehicle ownership in China has risen from eight vehicles per 1,000 inhabitants in 1995 to 23 in 2006. In India, the ratio has increased from six vehicles to 12 per 1,000 inhabitants.

The focus on emerging markets does not lessen the need for innovation, show organizers say.

Instead they argue that as emerging markets grow, they will redefine the automotive marketplace and force the definition of innovation to change along with it. For instance, the innovation required to produce a vehicle for the equivalent of $5,000 or $3,000 can be a far greater challenge than creating a luxury model sold for 20 times that cost.

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