By Mark Humphries, Partner at Catalyst Corporate Finance

Yesterday saw the global launch of the BMW i3, BMW’s premium electric vehicle. This is not only a car which has a high level usage of composites in its design, to counterbalance battery weight, (the passenger cell of the i3 is made of carbon fibre reinforced plastic) but one which BMW has designed to be a volume-production vehicle.

At €35,000, the i3 is a significant milestone in the future development of the automotive sector. In Catalyst’s recent Composites M&A report, Ian Robertson, BMW board member and Head of sales and marketing, highlighted the company’s commitment to being at the forefront of developing the use of carbon fibre in automotive production.

The use of composites in higher volume car production has so far been held back by cost and slower production cycle times. For BMW, the crucial weight reduction benefits of carbon fibre has helped offset its higher cost and so made the financials work. To address production restrictions, the company has redesigned the full production chain.

To secure technology know-how and a reliable supply of raw materials, BMW established a joint venture with SGL Carbon (in which BMW has taken the usual step of acquiring a stake). Together, they have invested some $100 million in a new US-based carbon fibre manufacturing plant to produce composites exclusively for BMW.

The i3 launch will certainly boost the profile of composites ...

The i3 launch will certainly boost the profile of composites and its potential to increase fuel efficiency in the automotive sector.

Significant investment is already being made across the supply chain as OEMs and their suppliers follow a similar path to that of BMW – using JVs and partnerships to accelerate the development of the technology needed to produce composite intensive cars at high volumes.

This is also leading to M&A as raw materials manufacturers focus on securing capacity and OEMs and component manufacturers snap-up leading technology and materials. With over 20 deals in the composites sector so far this year, we could be set for another record year for M&A. ♦


Mark Humphries is a Partner at Catalyst Corporate Finance. Catalyst is an international corporate finance advisor, specialising in company sales, acquisitions, private equity and debt funded management buy-outs.