“An extraordinary effort.” This is how Gestamp's executive president, Francisco J. Riberas, recently described the experience of the Spanish multinational in recent years, dedicated to manufacturing chassis and bodies for automotive giants such as Toyota, Volkswagen, Stellantis, Ford and Renault-Nissan.
With 115 factories spread across 24 countries, the company has not been spared from any of the latest global upheavals. It suffered from Covid from the first day and from the very epicenter – it has factories in Wuhan – and later suffered, in order of arrival, the chip crisis, the invasion of Ukraine – it had to close four plants in Russia – , the rise in prices of raw materials and inflation. A carousel of strong emotions that forced him to focus on everyday life.
The storm also coincided with the largest technological transition in recent decades in the automotive sector, digital and electric cars. The large manufacturers, especially given the shortage of chips, decided to bet on vehicles with greater added value and the plan has worked out well for them. The consequence has been increases in car prices, margins and profits, to record levels. Relegated at first, top-level suppliers such as Gestamp have been slow to enjoy a bonanza now evident in the income statement.
In the first nine months of the year, the group's main business variables reached record levels. Revenues were 9,000 million euros, while gross operating profit (ebitda) stood at 1,011 million and final profits at 225 million. It is a milestone for this company founded from a scrap metal business in Burgos in the 1950s by the father of the current president, Francisco Riberas Pampliega.
“These are record results in which market growth is once again exceeded and financial stability is persevered,” the executive president stated this week before analysts. Cost containment and prudence in investment, two of the principles applied since the beginning of the pandemic, continue.
The recovery of the business has allowed Gestamp to propose a new long-term strategic plan, until 2027. The big messages consist of “following the customer”, diversifying internationally, positioning itself in the electric car, betting on research in a sector ultra-competitive and take advantage of the fact that large manufacturers do not stop outsourcing processes to find new lines of business. There are also specific objectives, among them those of increasing income by 50% until 2027 and distributing 30% of the profit among shareholders.
When looking to the future, the great challenge is China, whose manufacturers are called to lead the transition to electric cars not only in their country, but in the rest of the world. Gestamp aspires for more than half of its income to come from this type of vehicle in five years and knows that the Asian country will also be a key market. About 12% of the company's turnover already comes from China and the plan involves "selective growth" in the region that allows it to "gain exposure to new electric car players."
The relationship with China also involves accompanying manufacturers from this country in their adventures abroad, including the European countries where they will end up building their factories. “In the short term, we talk about their exports, but in the longer term they could settle here,” Riberas explained to the analysts. “We are a relevant player in China” and “we are a possible partner in any decision they might make to open a factory outside of there.”
Among the Chinese car manufacturers with which Gestamp already works or wants to do so are BYD, Geely and GAC. The country wants at least 20% of light car sales in the domestic market to correspond to electric cars.
In Spain, the great deployment of the Chinese automobile has already begun. The ZS combustion SUV, from the MG brand, has managed, thanks to its lower prices, to promptly lead the list of best-selling cars in the country.
