During the troubled days of December 2011, following the bankruptcy of Sweden’s treasured automaker Saab, the global meltdown of financial markets had put the car industry on the brink of collapse.
But Sweden’s automotive sector didn’t fall by the wayside – it just found a way of reinventing itself.
Today, the employment rate in Trollhättan, where Saab and many sub-suppliers were based, is higher than before the 2008 financial crash when thousands of people lost their jobs in the aftermath. Once again, automotive factories across western Sweden are bustling with activity as they now help bridge the gap to electric and connected vehicles.
“The automotive sector managed to bounce back thanks to new business ventures and a cooperative mindset, but without brave entrepreneurs, Sweden could have lost engineering talents and world class automotive expertise,” says Ann Palmnäs, Head of Operations at Position Väst, the region’s official investment promotion agency.
One of these lionhearted entrepreneurs is Tommy Christensen, founder and owner of TechROI Fuel Systems which has become a rising star among automotive sub-suppliers. The company specialises in the manufacture of pressurised fuel tanks for the rapidly expanding hybrid car market.
Based in Bengtsfors, an hour’s drive north of Trollhättan, the now six-year old hybrid fuel tank manufacturer is looking to a bright future following its June 2018 acquisition by Spectra Premium, a North American leader in automotive parts with 1,500 employees.
“Every car maker today is mapping out plans for electrification, but they also realise that hybrid models will be essential in the transition. Our fuel tanks are designed to meet those needs. The tanks are made out of stainless steel using a technique that allows for thin layers, creating a lightweight product,” explains Christensen.
Gateway to Europe
Just three months after the Spectra Premium acquisition was concluded, TechROI Fuel System’s new Canadian owner announced a 70-100 MSEK investment in a new production line, which will be fully operational by Q2 2019.
The investment involves an installation of eight welding robots while, at the same time, creating 70 new jobs at the existing plant in Bengtsfors. The production ramp-up is expected to increase TechROI’s output of fuel systems by 150%.
“Making a fuel tank sounds like a simple task, but these are complex systems. By next year, our manufacturing unit will scale up automated welding, backed by teams working with testing, quality control and procurement,” says Christensen, who retains a 20% stake in the company.
Spectra Premium’s acquisition of TechROI Fuel Systems gives the Canadian parts supplier a strategic gateway to the European automotive market. Here, industry leaders such as Volkswagen, Mercedes, Volvo, Toyota and Mitsubishi are all betting big on hybrid cars.
According to statistics from ACEA, the European Automobile Manufacturers’ Association, hybrid car sales in 2017 grew by 50% in the EU. Electric car sales grew by 39% but still only represent 1.4% of the EU’s total new car market.
“Without a strong presence in Europe you can’t be a global supplier in the automotive sector. Spectra Premium will now gain this advantage.”
Furthermore, says Christensen, it places the company at the heart of a thriving innovation hub in western Sweden.
Global R&D centre
A high-tech European manufacturing unit is not the only thing Spectra Premium wins by acquiring the operations of TechROI Fuel Systems.
The deal also encompasses TechROI’s advanced R&D centre located in Trollhättan which challenges the boundaries of fuel systems manufacturing. Following a planned expansion, the centre will function as a test facility for Spectra Premium’s global portfolio.
Christensen continues: “Car manufacturers in Europe know that Swedish suppliers offer cutting-edge technological expertise. Our research centre proves the point and enables us to push new innovations in fuel systems.”
But that’s not all. Being a next-door neighbour with the Production Technology Centre at Innovatum Science Park, which is jointly run by GKN Aerospace, opens up possibilities for cross-disciplinary R&D in hybrid technologies.
Together with five other science parks in Västra Götaland County, including Lindholmen which specialises in intelligent vehicles, this part of Sweden prides itself on a regional innovation system with a global impact.
The industrial competence of western Sweden – the country’s automotive hub – is alive and well, Christensen concludes.
“With sizeable foreign investments like this we can recruit young top-talent engineers attracted by the prospect of a global career.”