Valeo says global automotive production will be affected by earthquake beyond May

Article by Christian Andrei, on April 27, 2011

France-based components manufacturer Valeo reported sales of 2.669 billion euros ($3.90 billion) for the first quarter of 2011, a 15.6 percent increase over the same period last year. The company’s automotive production worldwide remained high in all regions, except in Japan where the company experienced a drop of 29 percent.

Original equipment sales in the country, which has yet to fully recover from the March 11 disaster, fell 22 percent. The company remains confident that it could outperform the industry this year.

Moreover, the company is sticking to its target to widen its operating margin for this 2011 from the 6.4 percent in 2010, the year it returned to profit. In addition, the company remains positive that despite suffering from the troubles in Japan, its global automotive production will not be adversely affected until the end of May.

Nevertheless, problems in the supply chain for the needed components may be possible beyond May. During a conference call last Thursday, Jacques Aschenbroich, the company’s chief executive officer, stated that the company currently did not see any reason to change its plans for the whole year.

Last month, the company stated that it could be at par with the 12.5 billion euro order intake recorded last year. The company is relying on the emerging markets in Asia, just like any other European automakers and related firms, to offset its more sluggish sales in its home country.

The growing market share in Asia boosted the company’s sales up 17 percent in the region during the first quarter, except in Japan. On the other hand, the company achieved an increase of 46 percent of sales in its North American market, with the improved product mix identified as one of the contributing factors.

Topics: valeo, production

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