Faurecia adjusts predicted profit for vehicle interiors business

By Liz White, UT staffNanterre, France-French automotive supplier Faurecia has adjusted its predicted profit in vehicle interiors downwards for the second half of 2005, from its previous estimate of Euros 180 million. The group attributed this drop to increases in plastics prices in the fourth quarter, among other factors, in a 19 Dec statement. Faurecia said also that its main customers have cut automobile production, and that pressure on selling prices continues. Added together these factors have led to the predicted drop in profits-to a level which Faurecia said it will announce later. "The Vehicle Interiors segment is currently facing difficult market conditions," the group points out. As "European leader in instrument panels and door panels," Faurecia said, it is "focusing on consolidating its positions in this market." Part of this strategy involves improving profitability, "through more selective sales strategy and more significant cost cutting," Faurecia added. While Faurecia's other businesses are all on target, the group said the dip at Vehicle Interiors will narrow its total operating margin in the second half of 2005, possibly to 1.7 - 2.0 percent-as opposed to 3.5 percent in the second half of 2004.Faurecia said its restructuring charges in the second half year will amount to around Euro 80 million.The picture shows development work at Faurecia on instrument panel skins."