PARIS -- French supplier Faurecia reiterated on Thursday its goal to boost its operating margin quarter on quarter this year despite a faltering European car market.
"We are sticking with this aim," Chairman Pierre Levi told Reuters in a telephone interview.
Levi said it was too early to say how the war in Iraq had affected the auto industry, but said production of cars in Europe in the second half of the year could slide more than five percent.
He said that for now Faurecia, 70 percent owned by PSA Peugeot Citroen, would stick with an earlier forecast of a four to five percent fall in production for the whole year, since the first quarter had been slightly more positive than expected.
"It is too early to estimate the impact on consumer confidence, then to work out whether carmakers will cut production," he said.
"Conditions are still unclear. For the past two years we have outperformed the market. The European market is currently falling and we will continue to do beat it."
Faurecia, Europe's third biggest car part maker by sales, on Wednesday posted an eight percent jump in first quarter sales to 2.583 billion euros ($2.78 billion) as carmakers seeking to woo frugal motorists with hi-tech features spent more on its car seats and interiors.
"The turnover is excellent and underlines the specificity of Faurecia, which is benefiting from the many recent launches," said CIC analysts in a note.
Levi said turnover in the second quarter would probably be in line with this figure and ruled out any dip in sales despite a declining market.
Faurecia posted a net loss in 2002 as bad deals hurt profitability and restructuring costs stung, but has said most of a sweeping revamp aimed at reviving its fortunes was done.
Suppliers such as Faurecia have been feeling the pinch as carmakers struggling with waning demand refuse to pay top dollar for their products.
Most analysts reckon conditions could get worse as the war in Iraq continues to weigh on the economy, meaning motorists are loathe to splash out on new cars and carmakers in turn could reign in production.
Car executives have whipped up a confusing chorus of comments in recent weeks over the fallout of the war on the industry, with some painting a gloomy future of sagging sales, while others shrugged it off as having little impact.