By Lawrence Speer, Automotive News Europe
Paris -- French supplier Faurecia sees major opportunities in North America as consumers shift from large trucks and SUVs to small and medium-sized cars. "We are forecasting strong growth and a return to profitability in North America," ceo Yann Delabriere told financial analysts and journalists.
Faurecia reported sales of Euro 1400 million in North America during the first half of 2008, up 19.6 percent on the first half of 2007. Similarly, the company reported an operating income of Euro 10 million during the first half of the year in North America, versus a Euro 54 million loss for the first half of 2007.
"We have a very good client mix, notably with sales to European automakers in the US such as Volkswagen and BMW, and a very low dependence on the truck market," Delabriere said.
Cars account for 86 percent of Faurecia's North American activity, versus a 14 percent share for slow-growth trucks and SUVs.
Faurecia is projecting strong North American growth from recently launched cars, including the Chevrolet Malibu and Cadillac CTS, as well as increasing sales from US-based European carmakers that make fuel-efficient cars.
New opportunities will also arise as US carmakers bring cars initially designed for Europe to the US. Faurecia expects to supply Ford when it launches production of the small Fiesta in North America, Delabriere said.
The bullish outlook on North America contrasts with Faurecia's performance in Europe. European sales fell by 1.1 percent, to Euro 5020 million during the first semester, and the company wrote off more than Euro 30 million for factory restructuring. Faurecia expects European car demand to continue slowing, at "a more pronounced" rate during the second semester, Delabriere said.
Rising prices for key raw materials -- including plastic and steel -- remain "a subject of strong concern," Delabriere said, but should not impact year-end results. Faurecia is now negotiating pricing agreements for 2009 with both suppliers and clients. Delabriere insisted Faurecia is on track to meet plans to push operating margins above 3 percent by 2010.
The company's first half operating profit rose to Euro 90.3 million, or 1.4 percent of sales. The margin was up from 1 percent in the first half of 2007.
You may e-mail Lawrence J. Speer at [email protected]