BMW, Volkswagen Battle for Control Over Carbon-Fiber Company SGL

When supplies are limited, demand grows -- and, more often than not, battles ensue. It appears a battle over a supplier of carbon fiber -- crucial to building the lithe, efficient vehicles of the future -- may be brewing between BMW and the Volkswagen Group.

In order to prevent Volkswagen from gaining control of carbon-fiber company SGL, BMW AG board member Susanne Klatten has bought a blocking stake in the company, according to Automotive News. Having partnered with SGL to produce carbon-fiber for mainstream use, BMW intends to keep its advantage over its German competitor in the field of lightweight materials.

Klatten, a member of the legendary Quandt family (long BMW’s largest shareholder), bought a 27.3-percent stake in SGL through her Skion investment group. Klatten is expected to increase her stake in SGL  to 29 percent over the next 12 months. Doing so would further diminish the hold Volkswagen has and could have on the firm. Presently, VW owns an 8.18-percent stake, which it purchased in February.

Although Skion has said it has no plans to take over SGL completely, Klatten has been watching VW’s actions and had announced in the past that she could easily acquire a blocking minority stake in the company. Having now done that, Skion can better influence the appointment of SGL’s top executives and directors. While SGL has said that it does not rule out collaboration with other automakers, with a BMW board member calling many of the shots, BMW could eventually become the company’s favored — or even exclusive — partner.

Last year, BMW joined forces with SGL in order to build a carbon-fiber factory in Washington State. BMW enlisted the help of the carbon experts to assist in the production of the advanced composite material, which it will need in massive quantities in order to build its upcoming i3 electric city car. That car is expected to feature a carbon-fiber reinforced plastic body over an aluminum chassis — an industry first, and likely a taste of things to come in the future. Mass production of carbon-fiber could be the next big thing, which is probably why VW initially wanted a piece of SGL — and why BMW is fighting so hard to keep it.

As a lightweight, high-strength material, carbon-fiber has been used extensively by VW on many Lamborghini models (for instance, the new Aventador utilizes a carbon-fiber monocoque shell), but other more consumer-oriented vehicles could potentially use the material in the future. Volkswagen's XL1 concept, which is expected to enter limited production within the next few years, extensively uses the composite material in order to attain its attention-grabbing 235-mpg rating.

If VW could control one of the leading manufacturers of carbon-fiber, it could likely reduce its production costs by a significant margin. Seeing as how BMW has blocked its fellow German automaker from such a move, it looks like VW will have to wait for its chance to buy into a carbon-fiber company.

Source: Automotive News (Subscription required)

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