German automotive brands Recaro and BBS have both filed for bankruptcy in the same week, showing times are tough even for well-known suppliers.
Recaro has filed for insolvency with the Local Court of Esslingen, following “significant financial difficulties due to extreme price increases in recent crisis years and the loss of a major contract”.
While the brand still supplies body-hugging sports seats to a number of car companies including Ford, Porsche, BMW and more, it says “effects of legacy products and business operations impacted the development of new product offerings during a regional reduction in vehicle purchase spend”.
According to Recaro – which has been owned by private investors for four years – it will continue to produce automotive seats while the administration process takes place, and noted the bankruptcy filing doesn’t affect its aircraft and office chair divisions.
Recaro was founded as coachbuilder Stuttgarter Carosserie und Radfabrik in 1906, producing car bodies for Volkswagen and Porsche until the early 1960s when it moved to seat production, becoming one of the most recognisable performance brands from the 1970s to now.
It not only supplies seats to car manufacturers but also offers off-the-shelf designs for modified vehicles, including race cars which require approved seats.
BBS wheels on Charles Leclerc’s Ferrari F1 car
BBS – the only wheel supplier for Formula One and another producer for new car manufacturers – also entered administration in Germany this week, with Motor1 reporting the firm filed for insolvency with the Rottweil Local Court.
According to the publication, BBS failed to pay its staff in May and June.
It’s not the first time the brand has found itself in a hole, experiencing five financial crises since 2007, however it was only recently acquired by its new owner, ISH Management Services, in June this year.
BBS rose to prominence as a wheel supplier for performance cars, producing some of the most iconic designs such as the RS three-piece wheel which became one of the most popular wheels of the late 1980s and 1990s.
Both companies have suffered from a lack of business in the aftermarket scene following the rise of cheaper ‘replica’ brands, which offer similar or identical designs at a much lower price – if not necessarily with the same level of quality.
