PARIS -- Plastic Omnium is preparing for a “challenging” sales environment in the next three years by reducing capital expenditures, finding production savings with data-driven Industry 4.0 processes, and turning commodified parts such as bumpers into high-content “smart” body modules.
Capital expenditures, now 7 percent to 8 percent of sales, will be trimmed to 6 percent from 2019-21, the supplier said. This will help increase free cash flow. Research and development will continue to be at 6 percent of sales, with particular attention on intelligent exteriors adapted for self-driving cars, and making inroads in the Chinese hydrogen fuel cell market.
The French supplier, which once made plastic components for a number of industries, has taken steps to focus its business on automotive profit centers. It sold its environmental division, which made large plastic waste bins, and took a two-thirds controlling share of HBPO, a joint venture with Hella and Mahle-Behr that produces front-end modules.
“Today we have a clear road map,” co-CEO Jean-Michel Szczerba said told investors last month. “We are a pure player in the automotive business.”
Plastic Omnium said 100 percent of its sales are now in automotive components, up from 77 percent as recently as 2001, with sales divided among what it calls intelligent exteriors (45 percent), modules (25 percent) and clean energy systems (30 percent).