EUR 850.00 For Business Accounts Only

Morningstar | Faurecia to Capitalize on Automotive Trends in Emission Reduction, Cockpit Electronics, and Seating

With product lines that directly address several key areas of the auto industry, leading market shares, and a global presence, Faurecia is well positioned for growth. Yet, low profitability, limited reinvestment, and a substantial exposure to high-cost countries--which inhibits capacity optimization--severely constrain management's progress toward the financial performance that attracts investors. A relatively debt-laden balance sheet and a high fixed-cost structure is a toxic combination for a company that operates in the highly competitive, capital-intensive, cyclical auto parts industry. Clean air legislation has been making the standards for engine emissions more stringent. Faurecia has capitalized on the industry's need to meet regulatory requirements through its engine emission control systems and through its weight-reduction efforts. While battery electric vehicles pose a potential threat to traditional emissions control, automakers will need Faurecia's engine emission control technologies to meet clean air standards well beyond the next decade.Reduced weight is critical to the auto industry's efforts to achieve clean air standards because less weight means better fuel efficiency, which translates into lower emissions. Faurecia set a target to reduce its parts weight by 30% on average. Initiatives include exhaust manifolds that can be as much as 40% lighter than a cast equivalent and seats that are 17% lighter. Faurecia's seating products play an important role in consumers' perception of a vehicle. The company also benefits from leading market shares in various interior products plus a strong presence in premium car brands. Automakers invest heavily on interior R&D, focusing attention on such minute details as the look and feel of the materials used in the dash, seats, headliners, and door panels; the feel and sound of switches as well as other types of feedback meant to signal or alert occupants; plus determining which sounds are allowed to penetrate the cabin (siren) and which noises should be filtered out (wind, tires).