The group doubled its divestment target to EUR1bn in proceeds by the end of next year. Faurecia also suspended this year's dividend payment, and said it had protectively renegotiated its debt covenant.
Faurecia said it has bought 81.5% of Hella for a total price of EUR5.4bn, and is changing its name to Forvia . Favre will be this division’s CEO.
Based on 2020 sales at Faurecia and Hella , the combined company would have ranked eighth on Automotive News Europe's list of the top-100 global automotive suppliers, with combined sales of about $24 bn. This is just behind Hyundai Mobis , with sales of $25.1 bn.
Also on 25 April, Favre and CEO Patrick Koller issued annual targets at the low end of forecasts, citing caution linked to Chinese lockdowns and the war in Ukraine.
The combined group should generate sales of about EUR23 to EUR24bn this year with a profit margin of 4 to 5%, Faurecia said in its first financial guidance since the Hella deal was sealed in January.
The company said it was taking cautious estimates of worldwide automotive production, which has been revised down in the light of global supply disruptions caused by the war in Ukraine and new coronavirus lockdowns in China.
'Components are not the problem,' Favre told journalists in a call. 'The problem is knowing what the final demand will be, and the situation in China, which is both a production and a demand problem'.
Lockdowns to manage growing coronavirus flare-ups in the world's largest car market are stranding workers, closing factories, and clogging up ports. This is further disrupting supply chains which have been shaken by two years of pandemic and Russia's war on Ukraine.
This is an edited version of a story which first appeared in Automotive News Europe.