Valeo Plans to Put Two-Thirds of Its R&D Funds Into Hybrid and Electric Powertrains

Valeo Plans to Put Two-Thirds of Its R&D Funds Into Hybrid and Electric Powertrains

By Scott Doggett March 10, 2010

Valeo SA, France's second-largest car-parts maker, said today that two-thirds of the research budget will be spent on hybrid and electric powertrains, as well as on cutting carbon-dioxide emissions from conventional engines.

Valeo said it will double sales to $20.4 billion by 2020 and deliver a return on capital of about 30 percent within three years, the Paris-based company said in a statement. The company also said that 60 percent of its investments will be targeted at markets such as China and India.

"By focusing our investments in these two areas, I am convinced that Valeo will be able to return to organic growth and play an active role in the consolidation of the sector," Chief Executive Officer Jacques Aschenbroich said in the statement.

The manufacturer, whose products span windshield wipers, headlights and hands-free parking devices, said last month that it would make components for gasoline-electric hybrid powering systems as part of a program to develop fuel-saving technology.

The company until recently focused on "micro-hybrid" devices that deliver more modest efficiency gains at lower cost, in preference to electric cars and "full" hybrids, which couple an electric motor with a combustion engine and recover energy from braking to charge a battery.

Production of hybrid vehicles, excluding those that recharge from electricity networks, will more than quadruple to 2.73 million cars and vans by 2015, the forecasting firm IHS Global Insight predicts.

Toyota Motor Corp., whose Prius hatchback was the first mass- market model, has said falling costs will let it extend gasoline-electric engines across its line-up, starting with the Auris compact this year.

Scott Doggett:  is an AutoObserver.com Associate Editor.