It is the embodiment of the new Faurecia. Fifty-eight-year-old Patrick Koller is the polyglot leader of PSA’s automotive supplier, an industrial group that has left France in recent years to become an increasingly international player in the manufacture of seats, cockpits and equipment for cleaning up cars.
Under the leadership of this Franco-German engineer, Faurecia multiplies technological operations : acquisition of Clarion and the Parrot automobile branch, a major partnership with German ZF. Last year, its group posted 17 billion euros in turnover for 6.9% of operating margin, and had 109,000 employees.
We have entered an era of fundamental change. We move from a complicated world to a complex world, from a predictable universe to an unpredictable world where transformations take place continuously. The number of parameters or stakeholders that have a major influence on the automotive sector continues to grow. There are more and more interconnected actors involved who communicate at a high frequency. We are now like the weather. We can predict the weather tomorrow, but totally unable to say what will be the weather in a month. Our industry is facing a similar phenomenon, and Faurecia is continuing its transformation.
The big trends in our industry are clear. For example, we can bet that there will be more and more cars zero emission and autonomous. But difficult to say when and in what forms. We can no longer apply to this complex world the tools and rules of the complicated world. Faced with this environment, it is necessary to have a clear vision and to advance in brief stages with agility. We need to adapt our governance models by, for example, working more in the ecosystem, by surrounding ourselves with relevant partners.
There will certainly be new actors. But we must not underestimate the strengths of the automotive world, which is capable of producing 100 million vehicles a year. To succeed in the automotive industry, you have to excel in a multitude of know-how such as production, innovation, marketing, the supply chain … The automotive players are perhaps not the best in a only one of these areas, but they must be very good everywhere. And that is far from obvious.
Traditional customers still represent the essence of our business. However, it is true that barriers to entry are shrinking and new customers are appearing.
There is not only You’re here, elsewhere. I imagine that an Uber or equivalent will have the desire to have interiors corresponding precisely to the use cases of its customers. To have a chance to get by when only small volumes are produced, incoming manufacturers must offer something different. This desire for differentiation stimulates innovation. When the choices they have made appeal, it attracts the attention of premium manufacturers, then others. This forms a virtuous circle.
In my opinion, the consumer has four priorities: security, freedom of mobility, affordable mobility and control of his time. To this must be added political, energy and regulatory constraints that are different according to the regions of the world, urban or rural areas. All of these elements will define his choice in terms of mobility.
Buying a car is not totally rational. We offer ourselves freedom, the ability to go from point A to point B when we want it. We buy a car for its extreme use case. If we need a car for seven people once a year, we will buy that one. The proposed alternatives, like the shared car, may make more sense economically. But if the consumer feels that it encroaches on his freedom …
In urban areas, there are alternatives in terms of transport and a legitimate concern in the face of pollution problems. In rural areas, the car remains indispensable. Look at what triggered the movement of the “yellow vests”: the hardening of the technical control, the limitation to 80 km / h, taxation on diesel. There will not be a solution for all mobility issues. There will be solutions depending on the use cases.
Regarding car pollution, we must stop saying that the car is the main cause of global warming: it represents only a part in constant reduction. Even if the “Dieselgate” proves that we are not perfect, our industry under constraint has continued to progress on emissions. And we will continue our efforts. In this sense, we are actively working to deploy the electric vehicle on a large scale, whether 100% battery or hydrogen. But it will also be necessary for cities to equip themselves so that we can recharge these vehicles.
We can not continue to increase the price of cars. The SMIC is growing faster than inflation, but the share of spending constraints in household budgets continues to grow. We must find solutions that are not inflationary. Technological breaks must allow it.
Since the automobile exists, there has been a transfer of value between the builders and those who were originally called the subcontractors. We have become partners that provide solutions and we will go even further in functions and services. For example, Faurecia started by producing parts for seats. Today, the group offers complete and intelligent seats and will propose personalized, connected and predictive experiences tomorrow. Faurecia wants to make the hardware “smart” and that’s why we want to buy the Japanese group Clarion. Thanks to its strong skills in electronics and software integration, this acquisition would significantly enrich our offer of Faurecia for the cockpit of the future.
Of course, and we are complementary. Beyond the issue of the margins of the automotive industry, which are not at the level of those of the digital economy and which constitute in my opinion a first barrier to entry, we are perfectly familiar with the various complex systems that make up a car. Take the example of connectivity: the consumer wants today to have a true digital continuity between its different environments, from home to his car for example. We worked with Amazon to integrate his voice assistant into a car cockpit as a new human-machine interface. If the GAFA (Google, Amazon, Facebook, Apple), BATX (Chinese Baidu, Alibaba, Tencent and Xiaomi) and auto industry players want to create more value for the consumer and more quickly, we must work together.
When we look at Android, Google’s operating system, we are not in opposition. We are complementary. It takes space for everyone, and doing reasonable business. We are a heavy industry, which does not have the margins of the new economy. We do not see why these people would return to our area. There is more and more cooperation and partnerships.
I am convinced that to imagine knowing how to do everything is illusory. An integrator like Faurecia must understand the subsystems and have a global vision of the value chain without necessarily holding all the know-how. Relying on the best partner in a particular field allows us to propose a real technological breakthrough and to put a solution faster on the market. This is what we do for example with ZF in safety or the CEA for fuel cell. The startups, like universities and research laboratories, are also accelerators of innovation, essential partners …
If the trade war is confirmed, I’m not sure there are winners and losers. It would be more of a loser-loser game. If some reasonable and necessary adjustments are made in the medium term, the reason will prevail. Today, there are more closed regions than others, there are imbalances that need to be rediscussed. Take the example of what happened between Mexico, Canada and the United States: they ended up finding an acceptable compromise for the industry. Between China and the United States, the discussions are difficult, but everyone is careful not to break. Our industry knows how to adapt. Manufacturers and suppliers are already present in all regions and have reduced their exposure to risk.
Digital transformation should be an opportunity for so-called “high cost” countries. There is a playing card for France, and it is now. There is currently a shortage of manpower in Eastern Europe. Do not miss the train. The research tax credit has been extremely effective, one could imagine an “industrial digitalization tax credit” so that small businesses can make the necessary investments. If large groups reinvest in France, their subcontractors must have the means to follow.
We must accept the idea we will use fewer people in factories, but many jobs should be created in maintenance and services. Maybe in the future we will buy production hours rather than machines. It will train employees to these new jobs. Finally, if we invest in digital and mechanization, we can make local production profitable. Today, we send car parts from one end of Europe to another …