Amcast eying more foreign car contracts
Dayton Business Journal - by Julie Bollinger Staff Reporter
Amcast Industrial Corp.'s flirtation with Toyota Motor Corp. might win it a contract that soothes the impact of American automaker strikes and gets back business lost to foreign automakers, a Chicago analyst says.
"Everybody is trying to do business with the Japanese transplants because their market share has gotten bigger in the last 10 years," said Alexander Paris with Barrington Research Associates Inc. "That takes business away and you try to get it back by getting business with them."
Paris said Amcast has been in talks with Toyota seeking to secure work from the automaker and that it's only a matter of time before Amcast lands a contract. Amcast declined comment on this story.
As the first quarter closed, the Big Three lost 2.4 percent of the light duty market share, from 73.7 percent to 71.3 percent, while Japanese brands gained 1.9 percent of the loss, Roney & Co.'s Transportation Quarterly report states.
Suppliers like Amcast have been penalized over the past two years by strikes at the Big Three. Amcast's loss this past quarter dropped to 5 cents per share compared to 18 cents per share a year ago, Paris said.
And with General Motors Corp. commanding at least one-fourth of its automotive customer mix, Amcast is no stranger to the harm of halted assembly lines. While the Washington Township-based company reported a 40 percent sales increase for its engineered components business segment, it continued to cite automotive strikes as an ongoing factor in its financial results.
Amcast made its first deal with Japanese automakers a year ago when it began shipping wheels to Subaru's U.S. facilities and to Daihetsu in Japan. Most of the business was done through a joint-venture relationship with Casting Technology Co. in Franklin, Ind.
Paris said Amcast "has a strong desire to go overseas" and will most likely do so through additional joint ventures rather than on its own.
Meanwhile, he looks for Amcast to pump up its flow-control segment to keep pace with growth of its automotive segment. "It would make sense to grow (the flow control segment) through acquisition," Paris said.
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