Automotive: “Valeo will pass 100% of inflation on to its automaker customers”
Christophe Périllat, who was appointed on January 26 to head Valeo, the 10th largest automotive supplier in the world (and France’s second largest after Faurecia), reiterated his desire to accelerate the company’s transition to electric cars in his strategic plan published at the end of February. , autonomous and networked. He agrees World what this new automotive universe of electrification, digitization and inflation means for his company.
You have invested a lot of money and resources in recent years to lead Valeo into the automotive future. So much so that the financial markets doubted this strategy. Wasn’t it too fast and too risky?
First, know that we are generating enough money to self-fund this transformation. It is true that in 2018-2019 we had to do a double job: investing in the technologies of the future while continuing to absorb the development costs of internal combustion engine vehicles. But this effort is largely behind us: With components such as on-board chargers, we are in the fourth product generation. This puts us ahead of our competitors and our goals.
In high-voltage electric drives, that is, in the activities of the Valeo Siemens joint venture, which we acquired on July 4, in June we exceeded 4 billion euros six months earlier than planned, the cumulative orders in 2021-2022 and every third electrified cars worldwide are equipped by Valeo. In the area of driving aids, we recently entered into important partnerships with Stellantis and BMW.
All of this represents real potential for growth and even hyper-growth for Valeo. In the area of electric propulsion, we will sell content with a value six to eight times higher than the heat engine can produce. In the heating-cooling part it is three times more. Overall, our plan is that we will grow from €17 billion in sales in 2021 to €27.5 billion in 2025, with a target of €40 billion in 2030.
They face shortages, especially in semiconductors, and the inflationary shock in material and energy prices. Won’t that complicate your negotiations with the manufacturers?
While the issue of price increases is a subject of intense discussion with our customers, we will pass 100% of inflation on to manufacturers. We will do it because we have no other choice. If we pack 1 kg of material in one piece, we can’t calculate 700 grams, otherwise it won’t last long. Our customers accept and will accept this fact.
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