Two Famous Aftermarket Companies Recaro and BBS Go Bankrupt. What Causes It?

Recaro seats. (Doc. Instagram/@recarautomotive)

JAKARTA – Bad news has come to automotive aftermarket enthusiasts. Two big names in the industry, Recaro and BBS, are experiencing serious financial problems. The well-known seat company Recaro has filed for bankruptcy, while the iconic rim brand BBS has been declared bankrupt.

Recaro, which is known as a supplier of high-quality seats for major brands such as BMW, Volkswagen, and Porsche, is now on the verge of bankruptcy. So is BBS, which also collaborates with well-known manufacturers such as Mercedes-Benz, Honda, and Audi.

Despite having strong ties with the high-end automotive industry, why did these two companies fall into a financial crisis?

According to a report from CarBuzz, Friday, August 2, the news of Recaro's bankruptcy filing came as a shock to workers within the company. They have not been officially informed about the situation. The IG Metall union has asked the company to provide transparency regarding this matter. So far, only the Esslingen District Court has approved the request for self-administration.

This move is quite surprising, considering that Recaro is widely known as a supplier of car seats for leading automotive companies. More surprisingly, this decision was made just four years after Recaro Automotive was sold by the American company Adient to a private investment firm that promised efficiency and faster decision-making processes. However, the Covid-19 pandemic that hit the world in 2020 also worsened Recaro's financial condition. In addition, the delay in the launch of the latest model by British automotive manufacturer Ineos Automotive also contributed to Recaro's decline. Recaro has a supplier agreement with Ineos, but the company owned by Sir Jim Ratcliffe delayed the launch of its two latest models, adding to the pressure on Recaro's financial condition.

On the other hand, the recent bankruptcy of BBS also came as a surprise. However, it was BBS Japan that went bankrupt, not BBS Germany. BBS America President Craig Donnelly explained that BBS Japan is owned by a different group than BBS Germany and BBS America. “BBS Japan is a completely different group, with a motorsports side of the business. BBS of America, on the other hand, is owned by KW Automotive and is not involved in the bankruptcy filed last Friday in Germany,” Donnelly said.

However, BBS Germany has not escaped financial problems either. The company had filed for bankruptcy after failing to pay some of its 270 employees. This is not the first time BBS has had difficulties, considering that the company has declared bankruptcy four times, including in 2020 and most recently in September 2023.