TRADING has been difficult for Boldon-based Hashimoto, now Faltec, since the onset of recession in 2008. The firm has experienced a tough couple of years, like most of the motor industry, with sales falling from a record level of £34.5m in 2008 to £21.5m in 2009 as the market for new cars fell in the recession.
It cut its production of plastic trims and radiator grilles in line with demand, but the introduction of the scrappage scheme helped boost its output for parts for the Nissan Micra.
The South Tyneside company, which receives 60% of its business from the Japanese car giant’s Washington plant, saw its turnover grow from £21.7m to £29.5m in the year ending December 31, 2010, with the popularity of current Nissan models, including the Juke, boosting sales.
However, the firm was unable to significantly reduce its pre-tax losses, which came in at £3.7m, down from £4.4m in 2009, saying Nissan’s success has not been mirrored elsewhere in the automotive industry.
As a result, the company was forced to make additional redundancies during the period, with its workforce dropping from 354 to 335.
But what has failed to kill off Faltec has only made it stronger as the firm forecasts a turnover of £40m for 2012, up £7m from a year earlier.
It believes it is in fighting form, having just secured a host of new orders from Nissan, including continued work on the Juke and Qashqai. Managing director Chris Pennison says Faltec has won a lot of new business going into next year, and has won it competitively.
“The automotive parts sector is competitive, especially among the leading cost-cutting countries like China and India,” he said. “We can’t compete on a labour basis so we have to take the whole cost element into account where possible.
“We have to embrace newer technologies in order to reduce costs and in the past 12 months we’ve invested around £1m in new equipment.”
The company has been based in Boldon since 1989 with Nissan in Washington and Honda in Swindon accounting for a large part of its output.
It also makes parts for the Toyota Avensis and hopes to win back lost custom from Oxford- based car-making giants BMW.
“We want to re-establish and win back business that was lost from BMW and Toyota,” said Pennison. “We’ve grown back since 2008 and upskilled in certain areas. We’ve invested £2m into the business in the last few years as we try to satisfy our customers while trying to keep our shareholders happy by seeing a return on our investment.
“The only way we can improve what we’re doing and stay ahead of the competition in Asia is through investment. We’re looking at one piece of kit that costs £150,000 just to put flocking on the inside of car windscreens.
“We’re also investing in moulding machinery that will probably cost £700,000. These are signs of a business that is in a positive transition.”
The firm admits that the remainder of 2012 will continue to prove difficult as the eurozone crisis hits companies’ trading opportunities the world over.
“In Europe our only real growth area is Russia,” said Pennison. “Our market is a challenging one where our customers sell their products in an area that is a difficult trading environment.
“Nissan sells a lot of cars into Europe and they will undoubtedly be wanting to cut costs where they can. That is why we have to stay competitive.
“Hashimoto was brought to Boldon specifically to supply parts to Nissan 20 years ago and it has developed and grown from there. We can’t afford to lose our biggest client and that is why we’re working hard and smart.
“The Qashqai and Juke models were a lifesaver for Nissan and as a key player in that supply chain, they have helped us enormously too.
“We’ve managed to bring our staffing levels back up to 472 and we’re in a really strong position going forward. By changing our name to Faltec we’re more identifiable with our parent company and therefore more globally recognisable.
“This will help our trading operations and our ability to win more clients immeasurably. However, it’ll be a while before the North East refers to us as anything else but Hashi!”
Washington-based Nissan, Europe’s most productive motor manufacturer, is about to set the pace for 2013, with three new models planned, including the electric Leaf, and a battery manufacturing plant. With turnover of £4.3bn – a billion up on last year’s number – the Sunderland firm has come a long way since 2000 when its revenues were just £1.8bn.
The car giant said sales for the July to September period improved by 5.5% to £18bn and the group reported a £813m profit. It came on the back of a rise in sales in the US, Indonesia and India.
And for the six months to the end of September, sales rose by 4.1% to £36bn worldwide. The company sold 2.476 million vehicles globally during the first half, a rise of 11.3% on last year and beating the industry average increase of 7.4%.
But it also expects full-year sales volumes to fall from 5.35 million to 5.08 million units, mainly because of the volatile situation in China and Europe.
These figures aside, the Sunderland-built Nissan Qashqai was the seventh best selling car in Britain last month.
Nissan’s UK finance director John Butcher said: “We’ve invested quite a lot in new technology, especially in our new battery plant and we’ve placed a lot of emphasis on low- carbon vehicles and their future in the commercial market.
“We’re very excited looking ahead to next year with the launch of our new models and we only hope that the situation in the eurozone, where we export a lot of our cars to, recovers soon.”