In its latest strategic statement, Faurecia is targeting an operating margin of 8% of sales in 2022 (versus current guidance of 7% in 2019).
The improvement, it says, will be achieved through sales leverage and major group initiatives, including digital transformation, while accelerating on innovation in 'New Value Spaces'.
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Over the period to 2022, all three of Faurecia's Business Groups are targeting sales growth with a CAGR of above 4% (with Interiors to reach above 6% CAGR including the SAS acquisition project) and Faurecia Clarion Electronics (FCE) is aiming to double its contribution to reported sales.
With a projected record order intake of EUR68bn for the three years 2017 to 2019, Faurecia annual average sales growth is targeted at above 5% between 2019 and 2022 to reach above EUR20.5bn in 2022 – a record for the company.
At its Capital Markets Day held in Paris today (26 November), Faurecia CEO Patrick Koller, stressed the importance of specialist product areas and emerging technologies in the company's strategic direction.
"Despite the challenging market conditions, we have continued to deploy our transformation strategy for the Cockpit of the Future and Sustainable Mobility, whilst maintaining a strong focus on resilience and total customer satisfaction,"Koller said.
"Our new Business Group, Faurecia Clarion Electronics, is a strong enabler for the 'Cockpit of the Future' and has a robust roadmap for profitable growth. At the same time, our investment in Fuel Cell Electric Vehicles will accelerate our Zero Emissions strategy and allow us to benefit from rapid powertrain electrification. In 2022, we will see record sales, profitability and cash generation. From a longer-term perspective, we are preparing for the next major disruption and target carbon neutrality by 2030."
Faurecia maintains that the Cockpit of the Future will create a personalised consumer experience combining functionnalities such as infotainment, ambient lighting, postural and thermal comfort and immersive sound. From its position in seating and interiors, Faurecia says it has undertaken a series of acquisitions and partnerships, including the SAS acquisition project, which gives it a unique position in interior modules and systems architecture.
Faurecia says the creation of Faurecia Clarion Electronics (FCE), regrouping the complementary technologies of Clarion, Parrot Automotive and Coagent Electronics, technology companies Covatech and Creo Dynamics as well as an ecosystem of start-ups and partners, provides Faurecia with the electronics, software, computer vision and artificial intelligence competences to enable its vision of the Cockpit of the Future.
It also says the profitable growth strategy of FCE has two priorities: accelerate order intake and improve cost competitiveness.
FCE is organised around four product lines: Cockpit Domain Controller, Display Technologies, Immersive Experiences and Advanced Driver Assistance Systems (ADAS). The Business Group is focusing on those market segments which offer high profitability and where FCE has a technology advantage. The diversification of its customer portfolio, from a primarily Japanese to a global customer base, and the doubling of the content per vehicle through its new product lines will significantly increase the Business Group's accessible market. This growth strategy will allow FCE to reach EUR1.6bn of sales in 2022 (up from EUR1bn proforma in 2019) and EUR2.5bn in 2025.
Faurecia says the FCE Business Group is deploying an aggressive cost competitiveness plan including headcount reduction and engineering offshoring, operations optimisation and bill of material savings. FCE, Faurecia says, will improve its profitability from at least 2% in 2019 to at least 6% in 2022 and 8% in 2025.
Powertrain
Faurecia notes that powertrain electrification continues to accelerate for all market segments, driven by regulations and public opinion. Recently, it says, there has been additional momentum for fuel cell electric vehicles (FCEV), especially for use cases requiring longer autonomy and shorter fueling times than battery electric vehicles (BEV). Faurecia estimates that 15% of both passenger vehicles and commercial vehicles will be electric vehicles by 2030, with the share of FCEV being around 2% for passenger vehicles and 5% for commercial vehicles.
Faurecia also says it is continuing its strong innovation momentum for ICE solutions for passenger vehicles, which will continue to represent 85% of the market in 2030. The group's technologies for ultra-clean and quiet ICE engines will increase Faurecia's content per vehicle by over 20% over the same period. For commercial vehicles, Faurecia's deNOx technologies will increase content per vehicle by over 30%. Additional growth will come from the High Horsepower market, which Faurecia entered through the acquisition of Hug Engineering, and where it says 'the emissionization rate' is increasing from 10% in 2018 to 60% in 2030.
Faurecia says it is accelerating its investment in fuel cell technologies. Through its expertise in hydrogen storage systems and its joint venture with Michelin for fuel cell stack systems, the group estimates it will reach a content per vehicle of EUR40,000 for commercial vehicles and EUR8,000 for passenger vehicles in 2025.
Faurecia adds that it has already won two business awards for hydrogen storage systems, with a start of production in 2021.
