PARIS - Faurecia will decide within 12 months whether to sell its interiors business, according to outgoing Chairman and Chief Executive Daniel Dewavrin.
Dewavrin will step down after a shareholders meeting in May. He will remain on the board, but will be replaced as chief executive by Pierre Lvi.
'We do not have the critical size in vehicle interiors,' said Dewavrin. 'To reach this size by internal growth takes too long. Either we grow externally, or we will have to split off (the division). A decision should be made in the next 12 months.' Faurecia's interiors division includes dashboards and plastic door panels, but not its core seating business.
Dewavrin's retirement was announced as Faurecia reported 1999 results. The company posted sales of A4.26 billion - an 8.2 percent increase over 1998. Net income rose 80 percent to A56.2 million.
Last year Faurecia signed a $500 million seating contract with GM, and bought US exhaust maker APAS for $340 million.
Dewavrin is targeting a better-than-50-percent increase in sales to A7.12 billion in 2004. By that time, GM will be Faurecia's third largest customer, with 15.9 percent of sales, behind PSA/Peugeot-Citroen (24.4 percent) and Volkswagen (21.5 percent), and ahead of Renault (14.4 percent). Fifteen percent of Faurecia's sales would then be in the USA. It accounted for 3.8 percent last year.
But these plans depend on growth in the interiors business. Dewavrin said he hopes the division grows and remains within the group.
He also said the front-end module business needed to grow to reach critical size, but this was not dependent on acquisitions. 'The front-end module market will grow. We will double sales within five years. So selling this business has not been on our agenda,' said Dewavrin.
Seats accounted for 66 percent of sales in 1999, and exhaust systems made up 17 percent of sales.