Car parts manufacturer Faltec Europe is looking to new markets after changing demands from its major customers knocked turnover by 16%.
The Boldon-based car parts manufacturer – part of the Japanese-headquartered Faltec Group – supplies vehicle makers including Nissan, Jaguar Land Rover and Honda but supply to the big names has been impacted by order reductions and a challenging market.
Sales fell 16% from £41.4m in 2012 to £34.7m in 2013, while operating profit also fell from £817,551 to £676,689 – a fall of 17%. UK turnover accounted for £33m, down on the £40.1m recorded in 2012.
Profit margins, however, rose by 2% to 15.5%, a figure improved by cost reduction programmes and better line layouts.
The company, which employed an average of 317 people last year, supplies parts to all of the model range made at Nissan’s Sunderland plant, as well as other manufacturing plants the motor giant has across Europe.
But last year’s replacement Qashqai led to Faltec seeing a reduction in business it had for the new model. Supply to Honda has also been impacted by a “challenging market” because of disappointing volumes in relation to two models, but it hopes the addition of the Civic Tourer will lift sales.
The directors’ report accompanying the accounts said the business “continues not to be complacent, regarding sales volumes and it continues to take steps to ‘right size’ cost base, diversify customer base and offer new sales options to its customer base”.
The company turned a manufacturing area into a new sequence/dispatch area for a customer of Nissan Faltec has signed a five-year contract with, citing the deal as “diversification at its best”.
Russia is now being targeted as a “key area of growth” that needed to be “reviewed and understood” by the business this year, having made some early work on the market last year. The business has also re-established links with BMW, which could lead to further work with the firm.
The report added: “The key to ongoing success with the carmakers is to be agile, offer innovation, not just in the cost arena but also the ability to react to support original equipment manufacturers as they suffer and try to manage distressed suppliers.
“Faltec continue to look to offer that point of difference.”