Carmakers don't like to venture into new markets alone. Most strong-arm their trusty suppliers to come along for the ride to ensure that components will be up to par, even in remote locales. Yet the success of one Czech firm, the Brano Group, is an object lesson in how savvy local players can thrive when global giants venture into their territory.
Founded as an ironworks 140 years ago, Brano was turning out car door locks for Skoda when Volkswagen (VLKAY
) bought the Czech auto maker in 1991. "VW insisted on unbelievable increases in productivity and quality from the suppliers," recalls Brano's owner and CEO, Pavel Juricek. Many outfits failed to meet VW's standards and were either taken over by Western European suppliers or went out of business. But those that could hit VW's targets thrived. Based in Jablonec, in the northern Czech Republic, Brano now has annual revenues of $100 million from the sale of components such as pedals, handbrake levers, and doors.
In global terms, Brano is still a bit player. But its sales have risen eightfold since Juricek, 46, bought the company in 1995. Profit margins average 5% of sales. Besides Volkswagen, Brano's roster of clients now includes General Motor Corp.'s Opel subsidiary (GM
), DaimlerChrysler's Mercedes-Benz division (DCX
), and Russia's GAZ in Nizhny Novgorod. Last year, Juricek, a trained engineer and economist, opened an office in Detroit to supply door-locking systems to GM in the U.S.
With the Czechs set to join the European Union in 2004, a fresh wave of investment is pouring in. Many local companies dread going head-to-head with efficient Western European rivals. But Brano's boss isn't daunted. Neither are most of his 2,000 employees, who chose a pointy-eared lynx from 35 potential company mascots. "It's small, but quick and aggressive," says Juricek. "Like us."
By Christine Tierney in Prague
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Copyright 2002, by The McGraw-Hill Companies Inc. All rights reserved.
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