After PSA Peugeot Citroen and Renault and some large manufacturers, smaller players in the automotive industry will in turn be supported. Announced this summer, the fund for subcontractors of rank 2 and up – that is to say companies supplying key equipment – was created yesterday in the presence of Christian Estrosi, Minister of Industry. The fund will initially 50 million euros. Five major suppliers (Bosch, Faurecia, Hutchinson, Plastic Omnium and Valeo) will provide 18 million, the Fund for modernization of equipment (FMEA), 25 million, and the Strategic Investment Fund (ISF), 7 million.
On the same principle as FMEA, "it will conduct a thirty direct investments in companies deemed strategic to the automotive industry," said Christian Estrosi.It will be interventions minority "of about 1 to 2 million euros, against 10 to 15 million for equipment category 1.
The creation of this fund will bring a breath of oxygen to the SME sector. "If these subcontractors benefit from an increase in their activity this summer because of the scrapping bonus, they know a situation of financial fragility due to their size, with treasuries tense penalized in a context of wide variation of activity, "said Herv? Guyot, CEO of FMEA.Jean-Christophe Qu?mard, purchasing director of PSA Peugeot Citroen, has counted 150 plans to safeguard employment among automotive suppliers since late 2008, including 30 site closures, for a total of 20 000 job cuts.
Certainly, "the production of our group rises above the levels of late 2008 which were very low," said Frederic Saint-Geours, CFO of SAP on BFM, but it "remains at levels lower than 2007. Over the year, activity equipment should fall in France from 20 to 25% by the Federation of Industries of equipment for vehicles (Fiev).
Stopping car scrapping
For 2010, activity remains very uncertain, due to discontinuation or reduction of scrap premiums in key markets.After a decline in car sales in Western Europe about 5% this year, the rating agency Fitch expects a decline of 6 to 8% in 2010. While large suppliers like Faurecia and Valeo, have improved their liquidity position and significantly lowered their break-even, "it will be more difficult for smaller contractors," said Jean-Christophe Qu?mard, which he believes " still quite a bit of consolidation and restructuring to do. " According to him, there is currently overcapacity average of 40% among suppliers.