Concentration amongst automotive suppliers: Acquisition of ITT Electrical / Purchase price DEM 3 bn / 18% growth in sales in 1997
Concentration in the worldwide automotive supplier industry is still forging ahead at a rapid pace and is prompting a certain amount of reshuffling in Europe as well. The latest example is the acquisition of the automotive electronics branch of the US conglomerate, ITT Industries, by the French supplier, Valeo SA (HQ: rue Bayen, F-75917 Paris) for a purchase price equivalent to some DEM 3 bn. Valeo, so far the number two in Europe, after Bosch, is thus world leader in certain sub-sectors now, as CEO Noël Goutard informed journalists in Paris.

Valeo – with nine industrial operating units – has extensive plastics processing activities, concentrated on injection moulding. These activities are centred in the Climate Control and Lighting Systems Divisions. Further key information on Valeo is given below:

1997 once again marked a year of progress for this French automotive components supplier. Sales rose 18% to nearly FRF 34bn, and net income was up 23% to FRF 1.48 bn. Climate Control business was boosted by the air-conditioning market, which is still experiencing growth worldwide. The Division's total sales stood at FRF 7.02 bn, compared with FRF 6.16 bn the year before. Following the acquisition in 1996 of a major stake in Mirgor – Argentina's leading manufacturer of thermal systems – Valeo purchased the German Siemens Group's 21% holding in Valeo Climatisation, the holding company for Valeo Climate Control's subsidiaries. Valeo Climatisation, which serves about 40% of the European market for automotive heating and air-conditioning systems, is considered European leader in this area, just ahead of the German Behr.

This Division – the largest in the group, with 19% of total sales – employs 5870 at 15 sites worldwide. Almost half the factories have integrated plastics processing. The biggest injection moulding site is at Nogent Le Rotrou (Eure) in France, with a staff of 1400 and 45 injection moulding machines (200 to 1300 t) producing plastic parts for radiators which are assembled on site. The chief plastics used at Nogent are PP, PA and PPS (500 t/y).

"Systems supplied to car makers usually comprise the heating/air-conditioning unit, compressor and condenser and, in some cases, the control panel", explains M. Fohrer, product manager at Valeo Climate Control. "The next step will be the supply of complete cockpit modules", he adds. With this in mind, Valeo and Plastic Omnium have decided to pool their technological expertise in order to offer innovative solutions, with the heating/air-conditioning, switching, instrument and display systems all integrated in the instrument panel.

The Lighting Division, which manufactures main and auxiliary headlamps, levelling actuators, signal lighting and tail light sets, reported sales of FRF 5.63 bn, up 14% on 1996. Here again, Valeo is European leader, ahead of Hella, Bosch and Magneti-Marelli, with a market share of 40% in headlamps and 30% in tail lights. A 50:50 joint venture was set up with Osram Sylvania in December 1997. The new company, Valeo Sylvania, is expected to achieve annual sales of FRF 1.4 bn in 1998. This will make it North America's leading independent automotive systems supplier, with a market share estimated at about 15%.

Valeo's Lighting Division operates 15 sites worldwide, all of which have integrated plastics injection moulding. The main plastics used are ABS (standard and heat-resistant grades), PMMA and PC, which has displaced glass in headlamp reflectors. The company's annual output is set at around 30m headlamps and the same number of tail lights.

With sales of FRF 3.71 bn, compared with 1.73 bn the previous year, the Valeo Security System Division significantly increased its leading European position in anti-theft systems and lock sets. This dramatic growth in turnover is the result of two acquisitions by the group in 1996: Fist Spa, a specialist in plastic door handles based near Turin, Italy (360 employees, FRF 270m) and Ymos' Lock System Division (5 production sites in Europe, FRF 1.5 bn). The Division further increased its integration of plastics in March 1997 with the acquisition of Brazil's Univel Group (1130 employees, FRF 520m), the South American leader in door handles and latches. A new line of business was also taken up in 1997 with the supply of complete door modules to car manufacturers.

Valeo's background: the group has its origins in the Societe Anonyme Française du Ferodo, founded in 1923. In 1980, the company brought together its different automotive components brands (Ferodo, Sofica, Marchal, Cibie, Paris-Rhone and Ducellier) under the name Valeo. From 1987 onwards, Valeo focused solely on the automotive components industry and launched its globalisation drive. The group currently operates 129 sites worldwide, with a total payroll of 36,100.

READER SERVICE: Valeo Annual Report 1997 (English), with further details on the different Divisions:PIE-No. 42845.
15.09.1998 [18462]
Published on 15.09.1998

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