What do the decorative trim on the Porsche Macan, the software running the connected car technologies on the Tesla Model S and the air ducts on the Honda CR-V have in common? They are all produced in Ireland.

The traditional car components sector here took a severe hammering in the 1980s and 1990s. However, many of the companies that survived and have set up since are at the cutting edge of the new technologies now making their way into the cars we drive.

In the late 1980s Ireland had just under 100 companies making automotive parts, according to data produced by the Irish Trade Board. German and US-owned companies figured prominently. Some of the biggest players, such as General Motors-owned Packard Electric and wiring harness producer Kromberg & Schubert, each employed more than 1,000 people.

Packard shut its doors in 1996 and Kromberg & Schubert in 2004. Even before that, the writing was on the wall. Dunlop tyres closed in 1984, the same year as Ford Motor Company ceased manufacturing here. At one stage Dunlop had 1,800 people on its payroll.

These were high profile casualties, but dozens of SMEs also closed, taking their sub-suppliers with them. The industry was struggling largely because it was producing low value components that could be made cheaper elsewhere. In addition, new IT-based systems were fundamentally changing how cars were made. Most of the plants needed major investment to meet the challenges of modern manufacturing. In many cases this was not forthcoming.

But Ireland still has its share of multinationals that stayed and prospered. In addition, a number of strong indigenous manufacturers have also emerged. It is not possible to say exactly how many companies participate in the sector, as there is crossover into other industries, such as life sciences and aviation. However, Enterprise Ireland has around 85 Irish component suppliers on its books while IDA Ireland has 15 overseas producers.

Among the longest international companies still operating here are Kostal, established in 1981, which makes automotive electrical systems for companies such as Mercedes-Benz, BMW and Toyota. It has plants in Limerick and Cork and invested €40 million in its Irish operations in 2010. Its electrical hardware is used on a range of Jaguar Land Rover products including the Range Rover and new Jaguar XE.

Borgwarner Beru, which produces emissions systems, was established in Tralee in 1986 and employs an estimated 160 people. It supplies engine components for, among others, the V8s used in the Land Rover Discovery and Jaguar XF.

Bruss, which makes high performance sealing systems for companies such as VW, Ford, BMW and General Motors, was set up in Sligo in 1981 while Wellman International, which produces hi-tech fibres, celebrated 40 years in Cavan in 2013 with an investment of €5 million in new technologies. The company employs 265 people and within the automotive sector its products are used for interior carpeting, headliners and door panels.

Client base

"I would describe our automotive sector client base as broad but shallow. There is a very wide spectrum of capability but relatively few suppliers in each area," says Tim Leavy, development adviser, engineering markets, with Enterprise Ireland. "The vast majority on the car side are supplying Tier I, II and III producers as opposed to the automotive companies themselves, though there are a few exceptions such as Carlow-based Magna Group which supplies assembled components such as interior lighting units to the car manufacturers. Supplying automotive components is extremely competitive with very tight margins although this is compensated for somewhat by the potential longevity of the contracts."

Tuam-based Connaught Electronics started life in 1982 producing vehicle alarms, transmitters and receivers for wireless telemetry applications. An innovative and progressive company, it subsequently diversified into camera systems and caught the attention of French-owned vision systems multinational Valeo, which bought it in 2007. The company supplies numerous OEMs including Jaguar, BMW, Volvo, Ford, Nissan and the VAG group.

Today, Valeo Connaught Electronics’ production site and R&D centre are part of the group’s comfort and driving assistance business cluster that uses radar and sensor technologies to develop detection systems to help with parking, for example. These technologies are central to the roll out of autonomous driving and Valeo is poised to become one of the key players in the sector internationally. In 2011, the company invested €17 million in its Tuam plant following the successful launch of its first generation multi-camera systems. In November last year, it announced the creation of 140 new jobs. This brings total employment to almost 750.

"In an interesting twist to the automotive components story, a small handful of Irish companies have become multinational players in the sector. Meath-based Mergon, which is one of the world's leading providers of blow and injection moulded products, opened a plant in the US in 1998 and the Czech Republic in 2005. It employs 500 people in total, with 200 in Ireland, and will soon open a new innovation centre at its premises in Castlepollard. Its customers include BMW, Toyota, Honda, JLR, Nissan and Tesla, and its products, such as air and fluid management systems, appear on models including the Nissan Juke and Note, the Toyota Yaris and Honda Civic."

Trends

Mergon was set up in 1981 and CEO Pat Beirne says it is a very different company now. "We have evolved in tandem with the industries we supply and by keeping very close to our customers have been able to anticipate trends ahead of our competitors," he says.

“Ireland is not an ideal location for supplying the automotive industry but this has actually made us stronger and in our case we are seen internationally as the ‘go to’ company for moulding expertise,” he adds. “Basically you have to be better than the other guys to survive and during the Celtic Tiger, when getting staff was really difficult. We went down the automation route which in turn helped our cost base, quality and productivity.”

The two key areas for automotive OEMs currently are recycling and "lightweighting" – which means doing everything possible to improve fuel efficiency and reduce CO2 emissions. "We are working closely with a number of companies, including Tesla, which is as much a technology company as a car maker," says Mergon's group engineering manager, Michael Daly. "We have developed an air duct for them that's 80 per cent lighter than a traditional unit. We were already producing units that were 20 per cent lighter, but this is a big step further and uses a process of twin sheet thermoforming to make the part."

Another Irish-owned components company flexing its muscles abroad is the automotive arm of Galway-based global contract manufacturer, C&F group. C&F first dipped its toe into automotive when its acquired the 44-year-old Meath-based trim producer Iralco from its receiver in 2008. A year later, the group bought a plant in Germany to expand its capacity. C&F Automotive now employs 350 people in Ireland and another 300 in Germany. The company makes the decorative and functional trim for models such as the Skoda Octavia, Porsche 911 and Opel Junior.

“There are only a few suppliers of trim so we are part of a close-knit community,” says group sales manager, Dermot O’Reilly. “We have the capacity to be competitive and also have strong technical and development capability. We have grown dramatically in recent years with 26 new projects on the books. When the motor industry hit rock bottom in 2008 a lot of OEMs reviewed their supply base and a lot more is expected of suppliers now. We’re constantly on the go and I spend between 30 and 40 weeks a year travelling to meet customers, building and consolidating relationships.”

Connectivity

Software is one of the fastest growing emerging areas within the automotive supply sector.

Dublin-based Cubic Telecom, a global machine-to-machine connectivity platform provider, is among those making waves internationally.

Earlier this month, it landed an €18 million investment from Audi Electronics Venture (a subsidiary of the car company) and the Nasdaq-listed Qualcomm Incorporated.

"We have taken a particular interest in the automotive sector because our unique technical solution and network reach are ideally suited to the connectivity needs of the motor industry," says Shane Sorohan, Cubic's chief operating officer.

“The industry is changing faster than ever and connectivity in the car is at the heart of it. We are working with Audi across a broad range of its vehicles and we are now live with Tesla in China and Hong Kong on a connected car project.”

Test cars: Irish roads prove ideal
Car companies are notoriously secretive about where they test new models but at one time the less-than-perfect road surfaces in the west and northwest of Ireland provided challenging terrain for chassis engineers.

Ireland was never a major test bed, but companies such as Mitsubishi and Lexus have tested here, as has Toyota. More recently, BMW reportedly tried out the X5 in the west , while Porsche occasionally tests in Ireland. Toyota used Ireland to try out the suspension on the previous generation Auris.