Valeo SWOT and PESTLE Analysis

Strength

1. Investments in key technological platforms to create a unique offers for mobility in the future: Valeo recently introduced 12 key technological platforms on Valeo investor day 2019. Valeo is basically focusing on 3 platforms, Electrification, smart mobility and safer transports. The French automotive czar, developed a Comfort and Driving Assistance System named ADAS featuring high voltage electrification consisting inverters, charger, battery cooling, front camera, LIDAR SCALA, driver monitoring etc. ADAS, from Valeo’s stable, offers one of the largest range of smart sensors and features that improve vehicle safety and comfort such as automated parking systems and enhanced automated driving systems. Valeo has achieved 1st position in the fast growing electrification and ADAS markets with their end-user centric solutions for intuitive driving, leveraging their expertise in detection systems, advanced human-machine interfaces and connected cars. They have maintained their competitive advantage with technology and created high entry barriers for other competitors.

2. ‘5 Axes’ Methodology for operational excellence. Valeo implemented its home-made strategy to achieve flawless production and operational excellence which focuses on 5 different parts and brings them together and optimizes them. Its aim is to provide quality products to customer at best cost and at the earliest while also achieving sustainability and profitability. The strategy is followed at all its development and production sites across the globe. Valeo has developed its own production system which implements a set of methods, tools and state-of-the-art production processes within a working environment that promotes quality, performance and employee motivation. These 5 areas cover Valeo production system, total quality, product development, involvement of personnel, supplier integration.

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Weakness

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Opportunity

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Threats

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Political

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Economic

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Social

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Technological

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Legal

1. Impact of French emission policies: When it comes to greenhouse gases and CO2 emissions, the automobile industry is the first one to come under the scanner. In a recent meeting of the council of EU environment ministers, they set a goal of a 35% reduction by 2030 compared to 2021, increasing the initial target of 30%. An interim target of a 15% reduction will ensure the automobile industry is responding. Achieving these targets will require not only real innovations and breakthroughs on combustion engines but also the introduction of a large proportion of electric plug-in hybrid vehicles into manufacturing ranges. France has introduced incentive-based schemes such as a bonus-malus system, leco-taxi kilometric, etc. which encourages them to incorporate a large proportion of electric and plug-in hybrid vehicles into their sales (more than one-third of total). However, they have marked 2023 as a review year where they may adjust the targets. As France has played a driving role in the due process, scope for Valeo increases here to invest in intensive research and come up with more innovative projects to start making the real technological breakthrough in electric and hybrid car fleets. The fact that France has set a target of 40% reduction of CO2 and other gases, 14% more than the target set by EU, also works in favor of this.

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Environmental

1. EU emission regulations such as WLTP: European Union has been continuously concerned with environmental emission issues. It has proposed various regulations for the automotive sectors to make the environment carbon free. Regulations like RDE Act for light-duty vehicles and VTP for heavy-duty vehicles are implemented by the European government. The government also encourages technological development and innovation to protect the environment and control pollution. Valeo is constantly developing innovative technology to contribute to its social responsibility. Valeo recently launched its ZERO emission vehicles that works on battery Electric vehicle by developing high voltage technologies such as generators and motors. Valeo firmly believes that Electrification would be the solution for Emission problems

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