Siemens VDO Completes Purchase of Alabama DCX Automotive Electronics Plant

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Months after announcing its intention to sell two of its automotive electronics plants in Huntsville, Alabama, DaimlerChrysler AG (NYSE:DCX) (Stuttgart, Germany) has finally received the union's blessing to complete the sale of the two plants to Siemens VDO Automotive (Regensburg, Germany) (Plant 1513644). The transaction completes five of the seven plant sales DaimlerChrysler intends to implement in the near future, in the attempt to divest itself of what it considers non-core competencies.

From the acquisition, Siemens VDO can readily expect to reap $1 billion in annual sales, solidifying its position as the third-largest global supplier of automotive electronics, expanding the company's product line into radios, instrument clusters, car body controllers, and powertrain controllers. The German conglomerate also produces body electronics systems (theft security systems, climate control electronics), chassis systems (electromechanical brakes, ABS components), driver information systems (GPS navigation), electric motor drives (sliding-roof and power-window motors), powertrain components (air fuel modules, engine control), and safety systems (smart air bags).

This purchase will also give Siemens VDO a major production foothold in the Southern states, positioning Siemens VDO to win business from the Japanese (Honda, Nissan, Toyota), Korean (Hyundai), and German (Mercedes-Benz, BMW, Freightliner) automakers already established there.

The purchase further consolidates the global auto electronics business, a trend that can be seen industry-wide. Twenty years ago, there were twenty-seven major automotive electronics suppliers. Today there are just nine.