Elektrobit Group Plc, which supplies customer solutions for the mobile phone industry, is now opening new doors in the automotive industry. In March the company acquired a majority shareholding in the German company 3SOFT GmbH, an automotive electronics software company.

As a result of the transaction the Elektrobit Group owns some 80 per cent of 3SOFT shares. 3SOFT sells product development services and products in the field of embedded software mainly to the automotive industry but also to the medical electronics industry. The most important customers include Audi, BMW and Daimler Chrysler, and their component suppliers.

Complementary skills

Juha Sipilä, Elektrobit's CEO, says that the proportion of electronics and software in cars is growing. This offers a growing market for productization services in the sector.

"Infotainment in cars, such as map services and safety software, is spreading rapidly," says Sipilä. "We're aiming at many levels of synergy benefits that are part of companies' operations. Our global network offers a quick and cost-effective infrastructure near the customer."

The skills of Elektrobit and 3SOFT complement each other. The core skills of 3SOFT are entertainment and telecommunications applications and real-time operating systems for body control applications. Elektrobit, which is well known for its Symbian expertise, specializes in wireless technologies. Together, the companies will be able to provide wide R&D services and solutions for the producers of brand products in the automotive industry.

Outlook promising for automotive sector

The acquisition is in line with Elektrobit's strategic policies. "We're endeavouring to grow faster than average in the telecommunications sector by expanding our customer base not only in telecommunications but in other sectors as well," Sipilä says.

In the automotive industry Elektrobit intends focusing in particular on real-time operating systems for cars. The outlook is promising. 3SOFT's turnover last year was EUR 15.5 million and the operating profit about EUR 1.1 million. Between 1998 and 2003 the average increase in turnover has been about 25 per cent. This year the growth is expected to be slightly more restrained.

"We're expecting a lot from the automotive industry. We expect the synergy benefits brought by the acquisition to show in the turnover of the Elektrobit Group in 2005 at the earliest," Sipilä states.

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Elektrobit's biggest customer group is the telecommunications industry, which accounts for about 80 per cent of the turnover. Of the EU countries, there are business activities in Estonia and Hungary.