Paris (Reuters) -- French auto supplier Faurecia today said it lost $266 million during the first half of the year and anticipates North American sales to fall 35 percent during the second half.
The company, which supplies seating, interiors and exhaust systems, warned in a statement that its second half faces continued "uncertainty in North America regarding the extent of the General Motors and Chrysler production restart."
Sales fell 52 percent in North America during the first half, as total sales fell 34 percent to Euro 4380 million euros ($6230 million). North America accounts for about 15 percent of Faurecia's total business.
Faurecia raised its cost-cutting target and predicted a very slow recovery after an unprecedented drop in auto production. Faurecia, which is 71 percent owned by PSA/Peugeot-Citroen, is aiming for operating income close to breakeven in the second half.
"We feel that the recovery in 2010 will be very slow, and very gradual," ceo Yann Delabriere told the BFM French radio station.
Faurecia's first-half operating loss of 187 million euros (about $266 million) compared with a profit of 90 million a year ago, before the automobile industry was hit by massive decline in sales.
"It's a bit disappointing. It's a bit below what we were expecting," said a Paris-based analyst.
Faurecia shares were down 2.6 percent at 6.71 euros in mid-morning trading, underperforming a 0.6 percent rise in the DJ Stoxx European Autos Index.
"These are ugly times and investors must be patient. But the key signs of recovery are there," said Morgan Stanley analyst Adam Jonas.
Faurecia saw a low point in sales in February, with a 43 percent drop. Activity started to pick up in the second quarter, with a 22 percent year-on-year drop in May, and a 16 percent decrease in June.
Faurecia's Delabriere said in an interview with Les Echos newspaper that the group's first-half net loss widened to Euro 365 million from Euro 22 million a year earlier.
The group is slightly ahead with its cost-cutting program, having achieved Euro 400 million of the Euro 600 million of annual savings it originally planned. Faurecia raised that target to Euro 700 million on Tuesday.
Faurecia will also look at opportunities in the crisis-hit sector as it consolidates, Delabriere told BFM radio.
However, the group does not have cash available and must reduce its debt, so opportunities would be through partnerships and joint ventures and would have to fall within its four existing areas of expertise, he added.
"The industry will consolidate -- it's inevitable. We will look at opportunities," Delabriere said. "We are not ready to spend money that we don't have anyway."
Any partnerships would be in Faurecia's existing areas of expertise and would help increase market share, Delabriere told reporters on Tuesday.
Delabriere told shareholders in April that the group would focus on preserving cash and did not plan any acquisitions.
Faurecia ranks No. 8 on the Automotive News list of the top 100 global suppliers, with sales to automakers of $17 660 million in 2008.
PIC: Faurecia CEO Delabriere wants to cut an extra 100 million euros in costs this year.