French Supplier Valeo does not expect growth in its North American business until 2006, the company’s chairman and CEO said recently.

“In terms of sales we are going down and I expect that 2006 will be the first year of strong growth for Valeo in North America,” Thierry Morin told the Automotive News Europe Congress.

The French group has been recovering in North America after problems at a US unit pushed it into a loss in 2001.

Valeo, of Paris, had global automotive parts sales of $US8.87 billion last year to original equipment manufacturers, a flat result when compared with sales of $8.8 billion in 2002. Of that, North American sales were an estimated $2 billion last year, down from $2.4 billion in 2002.

Valeo posted a sharper-than-expected jump in first-quarter profit thanks to cost cuts and a smaller tax bill. Net profit rose to €74 million ($90 million) from €22 million a year earlier, as it got a boost from a one-off tax refund.

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Morin said that Valeo remained on the lookout for acquisitions in a consolidating sector but he told Reuters he would not pay premium prices just to win market share.

He declined to be specific about potential acquisition targets.

Suppliers have suffered in recent years as car manufacturers, battling sluggish markets and a strong euro, seek to save money by paying less for parts.