By Sylviane de Saint-Seine
Paris -- Embattled automotive parts supplier Faurecia will continue its strategy of expanding production and client bases despite the abrupt departure of its chief executive, analysts say.
Pierre Levi quit his job on 2 Aug after it was revealed that German prosecutors were investigating whether employees of Faurecia and other suppliers bribed Volkswagen managers to win parts contracts.
"Levi was an impressive leader who brought focus and charisma to Faurecia," Philip Wylie, head of the automotive corporate finance team for PricewaterhouseCoopers, said.
"But Faurecia is not engaged an aggressive acquisition spree that would rely crucially on the skills of the man at the top.
"It just needs to carry on with what it does."
Edmund Chew, managing director of UK-based SupplierBusiness, said: "Levi will be missed but Faurecia has a deep pool of managers."
French conglomerate PSA/Peugeot-Citroen, which owns 71 percent of Faurecia, will retain a controlling stake in the world's ninth-biggest automotive parts supplier.
Jean-Claude Hanus, director for legal affairs at PSA/Peugeot-Citroen, is acting as chairman of the supplier while Frank Imbert, Faurecia's chief financial officer, is currently the managing director.
Even without Levi's departure, however, Faurecia was bracing for a difficult time.
Raw materials prices continue to rise, especially for plastics.
Faurecia's orders are falling, especially from French automakers PSA and Renault, with the latter suffering shrinking European volumes.
The two provided 40 percent of Faurecia's €1100 million revenue last year.
Analysts said Faurecia was right to move production to low-cost markets.
This year, it will open four plants in eastern Europe and two each in China and South Korea.
"The next 18 months are going to be rocky for Faurecia," said an analyst at a US investment bank.
"But on a three- to four-year horizon, they are doing the right thing."
From Automotive News Europe (A Crain publication)