Investors do not realise Valeo’s Asian potential-CEO
Valeo generates 18 percent of its sales in Asia, and 7 percent in China alone, and that percentage will increase due to fast organic growth in these booming markets, but investors still see Valeo as a company anchored in mature European markets.
“They still see us as mainly a west European company,” chief executive Jacques Aschenbroich told the Reuters Auto Summit in Paris. But despite a decline in turnover, Valeo is keeping up its research and development spending and is continuing to forge forward countries in China, Thailand, India, Turkey or Brazil.
In China, where Valeo grows at a rate of 20 percent, it recently took full control of a joint-venture that makes compressors and the group is reviewing all its six joint ventures in China as it aims to keep on growing fast. It has 500 million euros of sales in China and employs 5,000 people there.
This may mean fewer jobs in France and the rest of Europe in the end. The group is competing a 500 million euro cost-cut drive and will soon start talks with unions to discuss a simplification of the company.
There was also good news for French employees as Aschenbroich said that there were no ‘bleeders’ in the firm that needed drastic action and he also said that for many activities of Valeo the wage costs were not the determining factor for the localisation of a plant.
He also put an end to his predecessor’s plan to sell assets in order to raise funds for acquisitions.
Firstly, he said disposals were not a stragegy in itself but could be the result of a strategic decision.
And secondly, this is not a good time to sell assets.