Valeo expects sales in China, the world’s fastest growing major car market, to quintuple to €1.3 billion euros ($1.7 billion) a year by 2010, up from €250 million last year, the parts maker’s chief executive reportedly said on Friday.
To sustain that level of sales, Valeo needed to invest from 6 to 10 percent of its revenues every year into expanding output and carrying out research, Thierry Morin told Reuters.
The news agency noted that Valeo, Europe’s largest listed car parts maker, has already invested €200 million in China, where it competes with Delphi and Visteon. – it posted a 17% drop in net profit last year, hit by soaring prices for steel and other raw materials as well as restructuring costs.
Reuters said Valeo signed a deal on Thursday for its ninth joint venture in China and plans six more projects that will produce parts from wiring systems to engine control units.
The maker of components from clutches to windscreen wipers has said it expects overall sales to rise between 2 and 3% in 2005, the report said.
Sales growth in China slowed to 15% last year, compared with a doubling in 2003, but Morin reportedly said the company still views China as a bright spot.
“Within a couple years you have to expect that Valeo is present in China for every business that we are in,” Morin told Reuters.