Faurecia CEO Patrick Koller: Plenty of Synergies with HELLA to build FORVIA

FORVIA—born from the merger of Faurecia and HELLA—is the world’s seventh largest automotive supplier, specializing in seating, interiors, electronics, lighting, clean mobility, and lifecycle solutions. Faurecia CEO Patrick Koller led this merger and is now leading the new company forward. This is an auspicious time to talk to him, and he graciously granted an interview with DVN CEO and lighting general editor Hector Fratty and interior general editor Philippe Aumont:

DVN: We’re in a time of great change, with climate change driving a push for sustainability; Covid outbreaks and lockdowns in China; Russia’s war on Ukraine; semiconductor shortages; inflation, and social tension. In that context, do you confirm your target of €33bn in 2025?

Patrick Koller:?Regarding climate change, I am proud that FORVIA is the first company in the automotive industry to have its net-zero emissions target approved by the Science Based Target initiatives’ (SBTi) on June 6th. It means that together Faurecia and HELLA will reach net zero emissions by 2045, confirming FORVIA’s leadership in our sector. FORVIA is the world’s seventh largest automotive technology company.

Based on the 2025 forecast, of 91 million vehicle per year, we confirm our target. As we announced the divestment of €1bn worth of assets (representing €2bn of sales) before end of 2023, the forecast is at €31bn.

DVN: How long did your acquisition target list include HELLA? How did it wind up being the pick?

Patrick Koller:?Regarding Faurecia, HELLA has an interesting technology portfolio for battery-powered vehicles and electronics; lighting is a cherry on the cake. Our strategic plan for mergers and acquisitions was designed to extend our electronic capabilities quickly. HELLA was one of those M&A targets; their electronics expertise and capacity are helping Faurecia to reach critical mass in automotive electronics. Combining Faurecia and HELLA is positioning FORVIA strongly on battery and fuel cell electric vehicles. Together, we have a market-leading expertise in solutions for hybrid powertrains to support customers moving from ultra-low to zero-emissions mobility.

INTERIOR LIGHTING FROM HELLA

DVN: Can you tell us about the product synergies you see in lighting and interior?

Patrick Koller:?One obvious synergy opportunity is in interior lighting. And beyond pure lighting, it includes any surface within the interior, where the combination of materials, lighting, and sensors will create functional, active surfaces, allowing new opportunities for HMI. HELLA is also deeply involved in seating electronics. They are involved into radomes, where composite capabilities are important, they are very much involved in egress systems including door entry systems. Overall, HELLA is expanding its electronics offer. The additional software expertise brought by HELLA enables us to grow the electronic business from €1 billion to €7 billion by 2025.

DVN: After the competition between Faurecia and Plastic Omnium to acquire HELLA, how do you see the future of HBPO (HELLA Behr Plastic Omnium)?

Patrick Koller:?For HBPO, Plastic Omnium have a change-of-control clause whereby they can take over HB shares.

DVN: FORVIA are now a big lighting supplier. What is your feedback on it?

Patrick Koller:?Unlike many other kinds of automotive components, lighting is a sophisticated product with high technology content and particular tooling needs. HELLA are one of the leaders and have the technology and the tooling to prove it. Many innovations are arriving in the market and after LED light sources, we have now the precise matrix light.

MATRIX LED HEADLAMPS WITH GLARE-FREE HIGH BEAM IN AN AUDI A7 (HELLA IMAGE)

There is a lot of innovation now to develop communication with light projections, which will improve safety not just for the driver but also for pedestrians and other road users.?

DVN:?Some are thinking that tier-1s will increasingly have to deliver the entire front end including headlamps and illuminated grilles. What do you think of that, and what will be FORVIA’s approach?

Patrick Koller:?Now, front ends should be called front (lighting) panels, as they no longer have the structural role front ends had in the past. As electrification is extended, the area in between headlamps can be used differently than cooling air intake in traditional ICE cars. This module includes a radome (structure protecting radar equipment and made from material transparent to radio waves). A front panel, as a module, could exist with or without headlamps. This wide module the width of a car—is using mostly polycarbonate and coating technologies. It unlocks a new commercial approach for headlamps. HELLA already has contracts with premium German automakers. Our plant in Slovenia focuses on the front panels with PC surfaces several times bigger than headlamps, and is now producing panels for Mercedes-Benz and ?koda. The plant is a standard-setter, and is regularly visited by automakers.

HELLA FRONT PANEL FOR EVS (FORVIA IMAGE)

DVN: As we know, it is not always easy between electronic and mechanical engineers. Now the software guys are the third partner with a strong and rising importance. How do you best recruit and integrate them all?

Patrick Koller:

Of course, mechanical and electronic engineers are different. But at the end of the day, engineers are interested in technology. What is important is the content of what they have to develop. They are looking for innovative, state-of-the-art technology—it doesn’t matter if it’s seating, interiors, or lighting. Engineers respect technology. They want to work at a technology company. These synergies between Faurecia and HELLA will retain the talents, and will help FORVIA to attract new ones. What is also important for attracting talent is location. It’s important to be present in key technology hubs, such as Paris and Berlin.

DVN: What kinds of changes do you foresee in the automotive market?

Patrick Koller:?Cars will always be a source of freedom of movement, so the passenger car is here to stay. However, the automotive market is going through a paradigm shift. It starts with the powertrain. The main challenge is in cost. The other challenges are around climate protection and CO2?neutrality, progressive automation of vehicles, and vehicle lifecycle management.

OTA will be enough to update the product along its life. OTA allows ongoing update of the electronics. FORVIA is developing everything in less than 20 months.

Major innovations will center around:

??Road projection, to help the driver and occupants focus on what is important, like a vulnerable road user next to the car.

? Front and rear panels, as discussed earlier.

??Longer lifecycles through OTA—fewer facelifts every 3.5 years to reduce R&D/investment costs.

??Interior lighting which will be more and more important

? The cost of vehicles can’t keep going up. I believe in the future of hybrid vehicles, hybrid hydrogen, and battery electric powertrains with 150 km range in electric, and 300 km in hydrogen.

FAURECIA CONCEPT INTERIOR

DVN: How do you handle sustainability and carbon neutrality?

Patrick Koller:?Faurecia created a sustainable materials division. Bio-sourced materials are a very effective way to generate carbon-negative contributions to the overall CO2?equation. The challenge is to develop the right injection processes for these diverse materials, and the material variability most likely inherent to natural materials. It applies mostly for Interiors. CO2?will probably force us to rethink modules design. We should aim for a product defined around sub-modules (maximum 10) to be clipped/assembled online. And it would have the benefit to be exchanged all lifecycle long. And even changed for model updates. We are aiming for an average of 30 per cent recycled plastics (polypropylene) by 2025. We must develop and finance the value chain to sustain this target. When it comes to carbon fiber, we have progressed with the “Force” project, to source carbon fibers intended for use in various structural applications, like seat frames, cross-car beams, etc. Hydrogen mobility is also key, and a cornerstone of the energy transition.?We produce hydrogen storage systems, and through Symbio, our JV with Michelin, we are present in 70% of the hydrogen value chain.

DVN: What can you say about competition?

Patrick Koller:?Beyond the traditional well-known competitors like Yanfeng; Antolin; IAC, and SMR, I have to mention Hasco in China. Hasco produce seating, interior, lighting, and they are in electronics in a JV with Visteon.

Even if costs are getting higher in China, as an example I was recently in Mexico, where total labor (direct + indirect) is lower than China.

DVN: What is key to be the reference interior supplier?

Patrick Koller:?For interior parts, we are also experiencing a change of paradigm. Interior suppliers had the impression they were developing products, where their focus was on transforming materials; even airbags or storage features are real products. Nowadays, we must be able to offer design freedom to our customers, therefore we need to have all the technologies to answer any design need. If you look to some premium vehicle interiors, you’ll see huge pillar-to-pillar screens. Innovation must be driven by customer needs, not engineering dreams. HMI should go in that direction, with one single large screen, complemented with reliable touch, gesture and vocal technologies.

DVN: Thank you for your time and thoughts, Mr. Koller, we are watching for great things from FORVIA!

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