Futuris confident sales will rebound
BY IAN PORTER | 28th Apr 2009
Futuris already has had two rounds of redundancies as it grapples with shrinking orders from Holden, and it still faces another six months of consolidation and reorganisation, according to managing director Mark De Wit.
But, while the company was operating in the red due to the abnormal costs of restructuring, Mr De Wit said he was confident Futuris would be profitable in the near term, even though local car industry production has virtually halved to about 200,000 cars a year over the past 18 months.
“The disappointing thing about the fate of the Pontiac G8 program is that is has been a flagship for the local parts industry and what it can do,” Mr De Wit said after returning from the US where he received a prestigious industry award for the invention of PET automotive carpet.
“It’s also disappointing because the G8 has been well received in the US and sales in recent months have been good,” he said.
Mr De Wit said that while reducing the size of the workforce was not an easy thing to do, it had worked out well for the company as it was now making the same volume of parts while working only one shift, not two.
Futuris supplies many interior parts to both Holden and Ford, including seats, door trims, roof linings and carpets. The company does the unique adjustable driver’s pedal box for the Falcon and the Territory.
Mr De Wit said he was confident local car production volumes would recover to 350,000 a year or more in coming years.
“We have an optimistic outlook that things will right themselves back to volumes we have been more used to in the past over the next two or three years,” he said.
“All of our forecasting to 2013 is that we are producing back in the high 300,000s – which is where the market came from. We will be producing different cars – the Focus and the Cruze – but still some Commodores and Falcons.” Mr De Wit said the Futuris operations in China, where the company is a major seat supplier to Chery, were booming.
“We have doubled our production of seats in the last four months,” he said, adding that the growth reflected the release of a raft of new Chery models.
“We are not seeing any recession in our China factory. We are exceeding our forecasts.” In addition to Chery, Futuris has formed a close relationship with JAC, China’s largest truck maker. JAC only recently secured a passenger car licence from the Chinese government, and has already released its A car and B car, with a C car to follow.
“We are one of two suppliers for the A car and are the sole supplier for the B car. The third car is not yet in production,” Mr De Wit said.
“I think JAC has an ambition to reach 150,000 cars a year in the next couple of years.” Mr De Wit said Futuris was still “a babe in the woods” in terms of international operations.
“We are really in our infancy in global growth,” he said, referring to the company’s operations in China, US and South Africa." He said Futuris had won some new purchase orders in the US and in Thailand last year, but that these were now on hold.
“In the US, we have only three employees and we were on the cusp. We had won some programs and the world changed. They have all been killed or put on the shelf.
Futuris posted strong growth in recent years as it acquired new subsidiaries and expanded its existing business.
Revenues had grown from $100 million in 2001, but the move into interiors in Australia and the start of operations in China and South Africa and new joint ventures saw revenue rise to $600 million in 2008.
The global financial crisis will cut revenue to perhaps $450 million this financial year, Mr De Wit said, but he added that he expected the recovery in world vehicle demand in the next two or three years to push the company’s revenue to around $750 million, without the addition of new contracts.
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