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Faurecia negotiating with Chang’an on JV

PARIS – French supplier Faurecia SA is negotiating with Chang’an Auto to form a joint venture that would supply the Chinese automaker interior components, similar to its JV with Geely.

“The Chinese automakers are interested in improving the quality of their cars in general and particularly the interiors,” CEO Yann Delabriere told CBU/CAR after he presented financial results for the first half at a press conference here. “Better materials, design quality and perceived quality are essential for their customers.”

While the Chang’an talks are underway, Faurecia has won contracts with Great Wall for its SUVs, starting with seats but including exhaust systems and interiors, said Delabriere.

Geely, Faurecia’s first major Chinese client, is doing a good job in managing Volvo, said Delabriere.

“Geely’s management is of a very high quality,” he said, noting that it has given Volvo a lot of autonomy while concentrating on raising production and sales in China to 200,000 units annually.

There are no common platforms in development between Geely and Volvo, he said, so that Faurecia approaches both companies independently. Faurecia and Geely formed a JV in 2010 for interior components including instrument panels and trim, and another in 2011 for exhaust systems. Most of Geely’s other JV partners for parts are from Asia, including Mando Corp. of South Korea, Tachi-S Co. and Yazaki Corp. of Japan and Hsin Chong Group of Taiwan.

Faurecia is concentrating on winning new business in North America and Asia, the two regions in which it is already growing the fastest. First half sales in China were up 14.3 percent to €510 million. Total Asian sales were up 16.9 percent on a comparable basis, to €651 million, with a 21 percent increase in South Korea.

Globally, Faurecia sales were up 3.8 percent in the first half to €8.7 billion. Chinese automakers like Geely and Great Wall are just a tiny portion of the total. The biggest customers are Volkswagen Group, PSA Peugeot-Citroën (which is Faurecia’s controlling shareholder) and Ford, which together account for more than half Faurecia’s business.

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