Faurecia SA, the French automotive parts manufacturer controlled by PSA Peugeot Citroen, announced its first half earnings jumped 40 percent thanks to an accelerated sales surge.
The growth in demand was massively ahead of the pace of auto market expansion in Europe and North America, with the car interior supplier now pushing higher with a profitability target set at least six months sooner. According to a statement from Nanterre France-based Faurecia, the company’s operating income jumped to 424 million euros ($465 million) from 302 million euros a year earlier while revenue was lifted 13 percent to 10.5 billion euros. The earnings margin as a proportion of sales soared to 4 percent from 3.2 percent, with the supplier now mulling a new threshold – an operating margin of 4.5 percent to 5 percent in the second half of the year instead of 2016.
Faurecia is 51 percent owned by France’s PSA Peugeot Citroen, the second largest European automaker, and is aiming for increased expansion outside its home base of Europe to shed reliance on the continent. It is also reorganizing its activities because of the substantial market declines seen in regions such as Brazil and Russia. The auto parts manufacturer last year said it was establishing a new joint venture in Mexico and expected during the recent financial results call that North American profitability increases would be higher throughout the year. After the first six months of the year, revenue jumped 26 percent in North America, climbed 9.3 percent in Europe and soared 9.2 percent in Asia and sales outside its home region were also assisted by the euro’s decline against the dollar.