France’s Valeo mulling acquisitions to strengthen position image

According to the French car parts maker’s chief executive officer, Valeo is currently open to supplier purchases as it strives to strengthen its product lines in such segments as fuel efficiency and autonomous driving.

The suppliers are today at the forefront of innovation, being the main supporters of the automakers that are currently racing to secure their global positions by entering the autonomous and connected vehicle race. Additionally, the industry sector has seen pretty big moves recently – including the acquisition by ZF Friedrichshafen of America’s TRW Automotive to form a supplier powerful enough to challenge the established No. 1, Bosch. According to Valeo, which showcased its ongoing strategy during a recent investor meeting, the company would primarily focus on expanding its main activities but also embark in an “active role in potential consolidation” among car parts makers. CEO Jacques Aschenbroich added the purchases would be viable if they bring “technology, (new) growth levels and worldwide leadership.”

The Paris-based supplier is now expanding its core business towards the increasingly fast selling hybrid technologies, which lower fuel consumption and CO2 emissions by marrying the traditional internal combustion engine to an electric motor and battery, as well as connected and driverless cars. Valeo also showed its current goal is to soar above the global vehicle production level growth of 5 percent on a yearly basis, lifting sales to 20 billion euros ($21 billion) in 2020 from 12.7 billion last year. Additionally, the supplier’s operating margin is expected to also rise to 8 percent in 2017 from 7.2 percent last year.

Via Reuters