Type: Private Company
Address: Karmannstrasse 1, Osnabrück, D-49084, Germany
Telephone: (49 541) 581-0
Fax: (49 541) 581-1900
Web: http://www.karmann.com
Employees: 6,958
Sales: EUR 1.9 billion ($2.4 billion) (2006)
Incorporated: 1906 as Wagenfabrik Wilhelm Karmann
NAIC: 336111 Automobile Manufacturing; 336399 All Other Motor Vehicle Parts Manufacturing; 333512 Machine Tool (Metal Cutting Types) Manufacturing; 333513 Machine Tool (Metal Forming Types) Manufacturing; 336370 Motor Vehicle Metal Stamping
SIC: 3711 Motor Vehicles & Car Bodies; 3714 Motor Vehicle Parts & Accessories; 3541 Machine Tools - Metal Cutting Types; 3542 Machine Tools - Metal Forming Types; 3465 Automotive Stampings
Wilhelm Karmann GmbH is a full-service supplier to some of the world's largest car manufacturers, including Audi, BMW, Porsche, Daimler, Volkswagen, Chrysler, and Renault/Nissan. Karmann develops and manufactures anything from stamped parts to complete vehicles, from machine tools and dies to production facilities for passenger cars. The company's core competencies are the design and manufacturing of auto bodies and roof systems for convertibles and sports cars. About four-fifths of the company's workforce is employed at Karmann headquarters in Osnabrück, Germany, and at the company's second major German subsidiary in Rheine. Additional production plants are located in Brazil, Mexico, the United States, Portugal, and Poland. Karmann is owned by the Battenfeld, Boll, and Karmann families, all descendants of company founder Wilhelm Karmann.
From Carriages to Motor Vehicles
In 1901, when Wilhelm Karmann acquired a carriage manufacturer in Osnabrück, Germany, horse-driven carriages were still the most common means of road transportation. Karmann had learned his craft as a cartwright at his father's small carriage workshop in Krefeld, but was fascinated by a new invention of the time: motor-driven vehicles called Motorwagen. Karmann dreamed of building such vehicles and he took classes in technical drawing on the side. His father, however, resisted the idea so Karmann decided to break out on his own. He worked as a technician in various Motorwagen factories and became director of operations at Heinrich Scheele electro-mobile factory in Cologne. When his employer sent him to an automobile show in Frankfurt am Main in 1900, Karmann knew that he wanted to build such vehicles himself. When he discovered that Osnabrück-based carriage manufacturer Christian Klages was for sale, the thirty-year-old found a bank in Münster that lent him the capital and he signed the purchase contract with Klages' widow on August 1, 1901.
Karmann took over a reputable business with two small buildings and a staff of 15 in Osnabrück's city center. The company continued to build and repair carriages of various kinds, including hunting carriages, coupes, landaus, and landaulets, for customers throughout Germany. However, it was only a few months before the start-up entrepreneur found a customer in the emerging German automobile industry.
In 1902 Karmann built his first automobile body for Dürkopp Werke in Bielefeld. Two years later his company's staff had doubled. The workshops were so busy and crowded that Karmann opened an additional showroom and sales office in Osnabrück. In 1905 Karmann presented his first catalog, featuring four different car body models, at the Berlin Auto Show. In 1906 the company was renamed Wagenfabrik Wilhelm Karmann and the name soon became well known among German motor-vehicle manufacturers. Among the company's early customers were two large carmakers, Adler and Opel. For the latter, Karmann developed his first passenger car with an enclosed body in 1908.
Registering the Company's First Patent
Ten years after its foundation, Karmann's enterprise advanced to a new level. In 1911 Karmann acquired Maschinenfabrik und Eisengieszerei Lindemann, a machine tool manufacturer and iron smelter in Osnabrück. Karmann moved his operations to the new premises with modern fabrication halls and a power station. Because his staff was busy building car bodies, the company founder turned down orders for carriages for the first time. In 1913 Wilhelm Karmann registered his first patent, for a convertible roof mechanism, with the German patent office.
However, when World War I began in mid-1914, convertibles were not in demand. When half of his workers were drafted to the military service, Karmann managed to secure an initial order of 100 ambulances from the German army; these later went into mass production under much larger contracts. In addition the company supplied harness equipment for horses, artillery equipment, and Zeppelin components. After the war ended in 1918 Karmann muddled through the postwar economic depression by manufacturing chairs, handcarts, and oxcarts, in addition to carriages, which Karmann continued to build for customers throughout Germany up until the 1920s. By then, the German automobile industry began to pick up speed again and new orders for car bodies came in from Neue Automobilgesellschaft (NAG), Protos, and Allg. Gesellschaft für Automobilbau (AGA), among others.
At the invitation of the Detroit automakers' trade association, Wilhelm Karmann traveled to the United States in 1924, where he visited the factories of Detroit carmakers. Deeply impressed by the sophistication and effectiveness of production technology and by the high quality of the finished steel bodies of U.S. passenger cars, Karmann invested heavily in state-of-the-art machinery and equipment at his own company. Although car bodies in Germany were still mostly made of wood and then covered with artificial leather or tin, Karmann was convinced that the future lay in full-metal bodies and casings, and he invested large sums in spray lacquering and in the reorganization of production processes to be suitable for mass production.
Crafting an International Reputation
In the mid-1920s Wilhelm Karmann developed a close business relationship with Heinrich Kleyer, the owner of Frankfurt am Main-based Adler-Werke, one of Germany's largest carmakers. Consequently, Karmann became intimately involved in the design and production of many legendary Adler models. In 1932 Karmann built the Adler Primus convertible with a Karmann-designed waterproof convertible roof. One year later the Adler Trumpf convertible with a Karmann body won numerous design competitions--or Concours d'Elégance, as they were called--the best advertising an auto manufacturer could hope for. Not surprisingly, the model turned into a bestseller. Another classic of the time built by Karmann was the representative Adler Diplomat convertible. One of Karmann's large customers was Hannoversche Maschinenbau AG, also known as Hanomag, for whom the company built half-steel and full-steel bodies for a number of sedans and convertibles.
By the 1930s Wagenfabrik Wilhelm Karmann had gained an international reputation. To handle the increasing amount of business, three large production plants were built. Their new equipment enabled Karmann to mass-produce tin casings for car bodies. Business soared until 1939 when Germany was once again at war. During World War II Karmann manufactured components for fighter airplanes. In 78 bombing raids over Osnabrück, the company's production facilities were almost completely destroyed within a few days.
Postwar Recovery with Volkswagen
After almost half a century of hard work,70-year-old Wilhelm Karmann's enterprise lay in ruins. However, he was determined to do whatever was necessary to preserve his life's work. Together with his son, Wilhelm Karmann, Jr., who returned from an American prisoner camp in fall 1945, he began to rebuild his company from scratch. With the few machines and raw materials that survived the war, the company started manufacturing folding chairs for movie theaters, metal bodies for wheel barrows, 100,000 shoehorns, and several hundred thousand sets of silverware for the British occupation forces.
While the reconstruction of the company's facilities in Osnabrück was underway, Wilhelm Karmann secured the first postwar orders. The Ford Motor Company ordered 800 cargo platform frames for trucks. Soon after, Karmann started producing truck fenders for Ford as well. In spring 1946 the company received an order of 1,000 cockpits for heavy-duty trucks from prewar customer Hanomag. The British military administration asked Karmann to make 100 frames for prisoner transport vehicles. Slowly, things began to improve--too slowly for Wilhelm Karmann. After all, the company founder's vision had been to build passenger cars. Although many Germans struggled economically through the first years following the war, it was foreseeable that the demand for cars would pick up again.
In the summer of 1945, German auto company Volkswagen (VW) had started manufacturing Volkswagen Bugs (known as "Beetles" in the United States) which, in the beginning, were sold only to the Allied forces and the German Post Office. Wilhelm Karmann envisioned a compact convertible based on Volkswagen's Bug model. Convinced that his idea would be marketable, Karmann bought a Bug and put his engineers to work. As soon as the prototype was built, Karmann shipped it to Wolfsburg and presented it to Volkswagen's CEO Heinrich Nordhoff--who turned Karmann's proposal down.
Fortunately, Germany's largest VW dealer was also present at the meeting. He believed Karmann's idea had great commercial potential. Nordhoff changed his mind and ordered 1,000 VW Bug convertibles from Karmann, and mass production of the new model began in 1949. Despite the relatively high price--Karmann's version cost about 35 percent more than the standard model Bug--demand for the compact convertible grew steadily.
New Generation of Innovation
In September 1952, just a few weeks after the 10,000th VW Bug convertible had been shipped, company founder Wilhelm Karmann passed away at age 81 and his only son, Wilhelm Karmann, Jr., took over the reins. The younger Karmann had joined the family business as an apprentice at age 19, and had gained additional experience working at Fiat Germany before he began studying automotive engineering at Bernau Technical College near Berlin. Under his leadership, his father's company experienced an enormous boom, which was partly due to his father's deal with Volkswagen, and which partly coincided with the years of the so-called German Economic Miracle. However, it soon became apparent that Wilhelm Karmann, Jr., was no less creative and determined than his father.
The younger Karmann had a vision of his own--a sassy two-seat sports car version of the Volkswagen Bug. Volkswagen CEO Nordhoff, however, was happy with the way things were going--demand for the standard VW Bug continued to climb--and he showed no interest in unnecessary risk-taking. After several unsuccessful attempts to persuade Volkswagen, Karmann met with his business friend Luigi Segre, the owner of the Italian car body design firm Ghia S.p.A Carozzeria, at the Genf Automobile Salon in spring 1953, and shared his idea. Well aware that if this were carried out successfully it could be a great business opportunity for him as well, Segre embraced Karmann's vision.
Six months later Segre presented Karmann with a top secret coupe prototype based on the VW Bug at the private garage of a French VW importer's home in Paris. Although Segre's coupe had a closed top, Karmann immediately fell in love with its elegant design. After a few minor changes had been made in Italy, the car was shipped to Osnabrück, where a small team of experts made a meticulous calculation of development and production costs, all under the veil of absolute secrecy.
Before approaching Nordhoff again, Karmann decided to get his right-hand man, Karl Feuereisen, involved. Feuereisen immediately liked the design and spurred Nordhoff's curiosity. At a meeting in November 1953, Nordhoff--impressed by the Italian design as well as by Karmann's calculations--decided to accept the risk. Moreover, Nordhoff also approved of the suggested name of the new vehicle: Karmann Ghia.
Success with the Karmann Ghia
Although Volkswagen CEO Nordhoff had agreed to invest in the mass production of the Karmann Ghia, his planners were fairly skeptical and forecast a total market potential of 50,000 cars. In 1955 the "Volkswagen Bug in Sunday dress" was presented to the broader public for the first time at the International Auto Show in Frankfurt am Main. Orders started coming in immediately. In fact, there were so many orders that Karmann had a hard time keeping up with them. By mid-1956, the serial production of the Karmann Ghia was up and running and the company built 11,500 coupes that year.
In 1957 a convertible version, as Wilhelm Karmann, Jr., had imagined, went into mass production as well. While demand continued to rise in Germany, the sporty coupe turned into an even bigger success overseas. The first orders from the United States and Canada rolled in before Volkswagen had even spent the first dollars on advertising. When VW finally rolled out its campaign in 1961, there were already 30,000 Karmann Ghias rolling on America's streets. The curvy little sports car that cost only half as much as a Corvette or Jaguar became especially popular among U.S. women and in California.
Due to the overwhelming success of the VW Bug convertible and the Karmann Ghia, Karmann's workforce doubled within less than five years, reaching about 3,400 by 1959. During the second half of the 1950s, production was moved to a brand-new plant on the outskirts of Osnabrück. In 1960 Karmann established its first foreign subsidiary near São Paulo in Brazil, fewer than two miles away from Volkswagen's car factory.
In 1961, a larger version of the Karmann Ghia coupe with a more powerful engine went into production. However, it never gained a following comparable to its predecessor's. Meanwhile, the ongoing demand for the original Karmann Ghia models kept the company busy for another decade. The last one was produced in 1974, eventually reaching a total of 362,585 coupes, of which 80,881 were convertibles--with two-thirds of those exported to the United States--and 42,498 were the "large" Karmann Ghia model.
Finally, after 30 years, Karmann's booming postwar success story wound down. On January 10, 1980, the last Volkswagen Beetle convertible came off the Karmann assembly line. Almost 332,000 had been built in Osnabrück since 1949. The great popularity of the Karmann Ghia, however, outlived by far the end of its production life cycle and became a legend that lived on in many Hollywood movies, including the 1958 Alfred Hitchcock thriller Vertigo, the 1986 teenager cult movie Pretty in Pink, and the 2004 action movie Kill Bill 2.
Expanding the Customer Base
The phaseout of the Karmann Ghia in 1974 marked the end of an era for Karmann--the era of high visibility in the world as a top German car manufacturer. As the company started producing the VW Scirocco in the same year, Karmann returned to its role as a highly competent and specialized supplier of vehicles and components, mainly to Volkswagen. After the automobile market's slowdown at the beginning of the 1980s--when the company produced losses for the first time in its history--had been overcome, Karmann's continued close partnership with VW and the resulting large business volume provided a solid basis for the company during the 1980s.
The VW Scirocco turned out to be a success, with over 500,000 cars manufactured until 1981. In 1979, shortly before the last Volkswagen Beetle convertible left Karmann's assembly line, the mass production of the new VW Golf convertible began. By far not as elegant as its predecessor--a roll bar stuck out when the roof was down--it still outdid the earlier model, and more than 388,500 Golf convertibles had been produced by 1993. However, the overwhelming success of the Volkswagen Bug convertible and Karmann Ghia had made the company strongly dependent on VW and therefore vulnerable at the same time.
Karmann had always worked with other vehicle manufacturers after World War II: it built the DKW Meisterklasse convertible for the German Auto Union and the Ford Taurus 12M station wagon in the 1950s; the Porsche 356 B hardtop coupe as well as the bodies for the Porsche 911 and 912 series; the body for the BMW-Coupe 2000 C/CS and the exclusive Opel Diplomat Coupe in the 1960s; and the VW Porsche 914, a mid-engine sports car that combined Porsche coachwork with a VW engine, in the 1970s. In addition, Karmann manufactured bodies, parts and components for BMW, Daimler-Benz, Porsche, Renault, Fiat, Peugeot, and other large automakers. The company also developed and built dies for car bodies and machine tools, and even developed whole car-body production plants for vehicle manufacturers.
While the company's ties to VW remained strong in the 1980s and 1990s, Karmann made an effort to decrease the company's dependence on just one auto manufacturer. In 1983 Karmann's plant in Rheine started producing the Ford Escort convertible, a joint development work of Karmann and Italian designer Giorgio Giugiaro; more than 188,000 were built between then and 1997. In 1989 Wilhelm Karmann, Jr., retreated from company management and put the responsibility in the hands of new CEO Rainer Thieme, who steered the company through the rough waters of the 1990s.
Global Market Changes
In the early 1990s car manufacturers faced a dramatic drop in sales in the world's major markets. In 1991 Karmann started building raw bodies and roof systems for Renault convertibles. However, sales for the VW Golf convertible, the manufacturing of which had generated a major revenue stream for Karmann for more than a decade, were sluggish. Production of the VW Scirocco was being phased out and the demand for Ford Escort convertibles dropped by 30 percent. Despite an interim contract from VW for manufacturing Golf sedans in the second half of 1993, Karmann reported losses for the second straight year. The company, which at the time still relied heavily on its main customer Volkswagen and generated over two-thirds of sales with the manufacture of complete vehicles, cut its workforce by roughly one quarter, eliminating 1,500 jobs in Osnabrück. At the same time Karmann opened new production plants abroad, one in Portugal in 1992 and one in Mexico four years later.
While the company successfully acquired new projects with Daimler-Benz and VW in Germany later in the decade, Karmann's executive management focused much of its attention and efforts on the world's largest automobile market: the United States. In 1996 the company established Karmann USA in Livonia, Michigan, where the company began to set up R&D and production capacities and to build new business relationships with America's top three automakers. When Wilhelm Karmann, Jr., passed away in 1998 at age 84, the company was back on track with over 8,500 employees in Europe and South and North America.
Positioning for the Future
In 2002, when Bernd Lieberoth-Leden became Karmann's new CEO, the company's U.S. headquarters were moved to a new location in Plymouth, Michigan, where a production plant for roof systems was set up in 2005. In 2003 Karmann began producing Chrysler's Crossfire convertible sports car in Osnabrück. To strengthen the company's core competency in roofs for convertibles, the development and manufacturing of roof systems became an independent profit center in 2002. In the years that followed, Karmann acquired ten contracts for roof systems. A major order for retractable glass roofs came from Renault for its Mégane convertible sports car, the production of which started in 2003.
In 2004 the company built a production plant for roof systems in the United States. In the same year Karmann reported a new annual production record of 94,000 Audi A4 convertibles, Mercedes CLK convertibles, Chrysler Crossfire Coupes and Roadsters, and Land Rover Defenders combined. In 2005 Karmann started making roofs for Nissan's Micra convertible.
In an effort to focus on the company's core competencies, Karmann sold its specialty fabrics subsidiary, Julius Heywinkel GmbH, in 2007. The company's hopes for the future lay in the growing niche market for specialty cars as well as in additional business from Japanese and Korean car manufacturers. For that purpose, a Karmann sales office was established in Yokohama, Japan, in 2006. The first roof system for a Japanese automaker was on track to be manufactured in 2008.
Principal Subsidiaries
Karmann-Rheine GmbH & Co. KG (Germany); Karmann Engineering Services GmbH (Germany); Automotive Global Service GmbH (Germany); ATP Automotive Testing Papenburg GmbH (Germany); Karmann-Ghia do Brasil Ltda. (Brazil); Karmann U.S.A., Inc.; Karmann-Ghia de México S.de R.L. de C.V.; Karmann-Ghia de Portugal Lda.; Karmann Sunderland (United Kingdom); Karmann-Ghia Zary Sp. Z o.o. (Poland); Karmann Chorzów (Poland); Karmann Japan Co., Ltd.
Principal Competitors
Webasto AG; Edscha AG; American Specialty Cars Inc (ASC); ArvinMeritor Inc.; Magna International Inc.
Further Reading
Alarab, Caron, "Maker of Hardtops to Bring 20 Jobs to Plymouth Twp.," Detroit Free Press, June 9, 2005.
Das Symbol. 50 Jahre Volkswagen Karmann Ghia, Osnabrück, Germany: Wilhelm Karmann GmbH, 2005, 104 p.
Dole, Charles E., "Karmann Tie to VW Goes Long Way Back," Christian Science Monitor, July 15, 1983, p. 17.
Fisher, Lawrence M., "Wilhelm Karmann Jr., 83; Ran German Car Body Maker," New York Times, October 31, 1998.
Karmann Cars. Eine Erfolgsgeschichte, Osnabrück, Germany: Wilhelm Karmann GmbH, 2005, 158 p.
"Karmann sieht sich nach einem Partner um," Frankfurter Allgemeine Zeitung, July 29, 1993, p. 12.
Moetsch, Matthias, "100 Jahre Karmann; Kutschen Karossen Cabrios," Auto Bild, August 24, 2001.
Steinborn, Deborah, "Speed, Outsourced," Forbes Global, April 28, 2003, p. 18.
"Wilhelm Karmann: 2007 Company Profile Edition 1," just-auto.com, April 2007.
"Wilhelm Karmann; Obituary," Times, November 14, 1998, p. 24.
— Evelyn Hauser
