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      03-06-2011, 01:32 PM   #1
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BMW Surprised by VW's Stake In SGL Carbon

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BMW Surprised by VW's Stake In SGL Carbon
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BMW CEO Norbert Reithofer said this week at Geneva that the company was "surprised" by Volkswagen's move to take an 8% stake in SGL Carbon SE, with whom BMW has a joint venture for production of carbon fiber. However, he added that that BMW's joint venture with the carbon-based products maker is expected to be unaffected by the deal, at least for the time being.

BMW plans greater use of the lightweight but strong carbon fiber material carbon fiber in its future vehicles. BMW and SGL planned to invest as much as 230 million euros ($317.9 million) in a joint venture to produce carbon fiber car bodies on an industrial scale. The future BMW i3 (Megacity) and the BMW i8 (Vision EfficientDynamic) will both feature body shells constructed of carbon fiber.

Source: Autonews:
Quote:
GENEVA (Reuters) – Volkswagen AG's acquisition of an 8.2 percent stake in carbon fiber specialist SGL Carbon surprised the latter's partner, BMW AG, signaling a potential source of conflict between the carmakers.

"VW did not tell us about it. We weren't warned in advance," Norbert Reithofer, CEO of BMW, told reporters on Tuesday during the Geneva auto show.

BMW and SGL planned to invest as much as 230 million euros ($317.9 million) in a joint venture to produce lightweight carbon fiber car bodies on an industrial scale as part of its vaunted efforts to roll out an ultra-green BMW electric car for megacities such as Shanghai.

First announced in October 2009, the BMW-SGL JV would produce several thousand tons of carbon fiber annually. Six months later, Mercedes-Benz formed a joint venture with carbon fiber industry leader Toray of Japan in a move that underscored the growing strategic importance of high-tech, lightweight materials in the fight to reduce fuel consumption and carbon emissions.

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      03-06-2011, 03:06 PM   #2
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"..to produce lightweight carbon fiber car bodies on an industrial scale.."

fuck me, how much are these going to retail at! :O
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      03-06-2011, 03:41 PM   #3
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hmmm... carbon fiber to be as available as bubble gum in the future? ^__^ works for me
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      03-06-2011, 03:48 PM   #4
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BMW really needed to make BMWi work in order to keep competing with MB and Audi especially, without selling out. Audi being owned by VW, has major resources from other VW brands like Lambo, Bentley, Bugatti, etc...

Now, with VW buying 8% of the company where BMW depended on for it's BMWi brand being owned by VW, looks like VW has another brands (BMWs) resources to evaluate and apply to it's own brands without even owning a piece of BMW.

This really does not look good for BMW. VW is on a mission.
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      03-06-2011, 05:12 PM   #5
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Industrial espionage at its best.
BMW should have just put it in the contract with SGL "no ventures with any other car company"
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      03-06-2011, 05:31 PM   #6
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FinancialTimes wrote:


VW takes stake in BMW’s carbon fibre partner

By Daniel Schaefer in Geneva

Published: March 1 2011 10:13 | Last updated: March 1 2011 23:40




Volkswagen has taken a minority stake in a carbon-fibre company that has a partnership with BMW, highlighting how such lightweight materials are becoming a battleground for Germany’s carmakers.

Europe’s largest carmaker by sales announced at the Geneva motor show that it had bought an 8.18 per cent stake in SGL Carbon, the German maker of carbon products.

The €140m ($193m) move will be closely watched by BMW and by Susanne Klatten, SGL’s main shareholder whose family is also the premium carmaker’s anchor investor.

Ferdinand Piëch, VW’s chairman, said on the sidelines of the motor show that the stakebuilding would allow the group to gain greater access to lightweight materials without harming BMW.

He said VW, which aims to raise its stake to a maximum of 10 per cent, had informed the premium carmaker and Ms Klatten in advance about its interest in the group.

“BMW has always been a nice competitor for our 10 little brands ... We do not hurt each other so we can well share ownership at SGL,” Mr Piëch said.

However, his words received a cool reception from Skion, Ms Klatten’s investment holding.

Skion said it was watching VW’s move with “vigilance”, adding that it could quickly raise its 22.5 per cent stake to a blocking minority if necessary.

Norbert Reithofer, BMW’s chief executive, denied that VW had informed him in advance. While he refused to comment on the implications of the deal, he said: “We have not been asked by VW if we like this or not.”

SGL two years ago formed a joint venture with the world’s largest premium carmaker by sales for the mass manufacturing of carbon fibres for electric cars.

While carbon fibre is still mainly used in the aerospace industry and for high-end sports and racing cars, it is moving to mass-market premium car producers, mainly because of the need to save weight in electric and hybrid cars.

BMW plans to use carbon-fibre passenger cells for its new BMW i electric sub-brand, which plans to launch a plug-in hybrid model in 2013.

Both Daimler and Audi, the German premium carmakers, have this year formed partnerships with carbon-fibre specialists.

Audi, owned by VW, recently announced a co-operation deal with German engineering conglomerate Voith to build lightweight materials.

Voith also owns a 5 per cent stake in SGL.

Bankers said SGL had attracted interest recently from a series of financial and industrial investors betting that the electrification in the car industry would turn carbon fibre into a mass-manufacturing material.

“An awful lot of financial investors and industrial groups outside the car sector have come to me and said they were interested in taking a stake in SGL in the past few months,” one banker said.


Copyright The Financial Times Limited 2011.
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      03-06-2011, 06:32 PM   #7
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Quote:
Originally Posted by BGM View Post
"..to produce lightweight carbon fiber car bodies on an industrial scale.."

fuck me, how much are these going to retail at! :O
The more you produce, the cheaper it usually gets. It's rather simply economics.
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      03-06-2011, 06:36 PM   #8
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Funny how this is announced to BMWs surprise weeks after they announce BMWi. This puts BMW in a bit of a bind as it would take a large amount of time and money to find another CF partner and keep on schedule.
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      03-06-2011, 07:02 PM   #9
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VW is just smart.. they are taking a legal stake in a company that will give them good dividends on their investment.
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      03-06-2011, 07:15 PM   #10
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Quote:
Originally Posted by uhn2000 View Post
VW is just smart.. they are taking a legal stake in a company that will give them good dividends on their investment.
Pretty sure they're interested in more than just dividends or other financial rewards. They want to make sure they continue to have competitive advantage.
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      03-06-2011, 07:39 PM   #11
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Carbon fibre is the new steel.

Steel is the new lead.

LOL
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      03-06-2011, 08:25 PM   #12
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Quote:
Originally Posted by Dennis911 View Post
The more you produce, the cheaper it usually gets. It's rather simply economics.






My Economic professors would be so proud.

Exciting news.
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      03-06-2011, 08:27 PM   #13
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Wow, Norbert blew this one. He probably forgot to bring his blackberry along. Someone is getting demoted. It would be odd for VW not to alert them.

But the response given by Norbert was just horrible. Uhh, ugh I did not like know, dude. Proper response (knowing or not) would have been - "We have been working with SGL for couple years now on exciting products such as xxx." - Free PR of products you name. "I am glad to see VW follow us into this space." (Jab at VW, isn't Audis slogan - "never follow")

Anyway, its easy to be a Monday quarterback, but he is a CEO who should know better.
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      03-06-2011, 09:01 PM   #14
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Quote:
Originally Posted by 1MORELAP View Post
Wow, Norbert blew this one. He probably forgot to bring his blackberry along. Someone is getting demoted. It would be odd for VW not to alert them.

But the response given by Norbert was just horrible. Uhh, ugh I did not like know, dude. Proper response (knowing or not) would have been - "We have been working with SGL for couple years now on exciting products such as xxx." - Free PR of products you name. "I am glad to see VW follow us into this space." (Jab at VW, isn't Audis slogan - "never follow")

Anyway, its easy to be a Monday quarterback, but he is a CEO who should know better.
Good points in regards to Making the most of it for PR/marketing.

But if they admit they knew but withheld the information from shareholders, it's a different kind of bad. Especially since it's followed up so close to the BMWi announcement.
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      03-06-2011, 10:13 PM   #15
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Time to buy shares of both these two companies sit and wait for them to zoom up the charts as the CAFE standards start to take effect.
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      03-06-2011, 11:05 PM   #16
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VW shld be simply getting access to the carbon fibre developments and applying on lamborghini and maybe bentley. I shld tink audi and vw might not be getting too much of carbon fibre for the time being. Maybe later in the future perhaps.
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      03-06-2011, 11:19 PM   #17
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question is "what or which model VW is going to use it on"? not on Jettas
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      03-07-2011, 12:05 AM   #18
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From the FP article I read that VW purchased an 8% interest in a company that BMW already owns 22.5% of. Definatly sounds like VW is following BMW into securing a German source for its future Carbon Fibre.

Great article on the back page of C&D this month with long-time F1 engineer Gordon Murray. He's pushing a glass-fibre technology where the monocoque/tub/spaceframe can be made for around $150.
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      03-07-2011, 12:38 AM   #19
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Economy of scale

Quote:
Originally Posted by Dennis911 View Post
The more you produce, the cheaper it usually gets. It's rather simply economics.
Well, EVENTUALLY yes cf components will be cheapER than they are now. Whether that will be cheaper/more expensive than steel is unknown.

The problem with going for a whole different type of material is investment. If you go from steel to high strength steel or even to aluminium most of your know-how would need only minor adjustments. There will be costs, but no where near as going for cf which is a whole new thing altogether. The engineering is different, processes and techniques are different. Even processes down the line (like painting, assembly, handling, etc.) are different so that's nearly like re-inventing the wheel.

Then you will have the problem of raw materials. Humans have been using steel for hundreds of years. There are established standards and supply chains all the way from ore to shaped forms. Going cf would mean having to go through all this all-over again. While they might not be making anything new, they will be making it in a whole new scale. Think of 1 dude hammering on samurai swords compared to factories making kitchen knives.

All this will cost vast amounts of money which will go in someway to off-set the economy of scale at least in the first 5-10 years.

I am all for cf. Reducing weight is THE way to go. I just don't imagine it being comparable to steel in terms of costs at least in the next 5 years.
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      03-07-2011, 07:26 AM   #20
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VW buy shares in SGL of 8.2% yet they already own Audi who have joined with Voith a German company that also specialise in CF and I might add already own 5% of SGL too.

The plot thickens.

Don't know exactly what this means for BMW but it can't be good and questions must be asked as to why this deal went ahead under their very nose without them even knowing (so they claim).
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      03-07-2011, 01:23 PM   #21
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I really wish Scott gave his two cents on this. But I understand it's a very sensitive and unpleasant issue to talk about.
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