China is set to play a central role in French auto parts supplier Valeo's "Elevate 2028" strategy, as the company seeks to restore revenue growth, lift profitability and strengthen cash generation amid a rapidly changing global auto industry.

Valeo unveiled the strategy in November, outlining plans to sustain margin improvement achieved since 2022, enhance cash generation from 2025, and return sales to growth from 2027.

It targets revenue of 22 to 24 billion euros ($25.9 billion to $28.3 billion) and an operating margin of 6 to 7 percent by 2028.

China, India and North America have been identified as Valeo's three key markets, with China remaining one of the most strategically important.

While China accounts for around one third of global passenger vehicle sales, Valeo's business in the country contributes about 15 percent of group revenue, leaving significant room for expansion, said Valeo China CTO Gu Jianmin.

Valeo expects its China operations to return to growth in the second half of 2026, ahead of the group's global recovery, supported by faster order-to-production cycles in the country.

The company expects to further expand market share in 2027, outperforming the broader Chinese auto market.

China has also become a key platform for global innovation. While more than 90 percent of products sold in China are manufactured locally, technologies such as intelligent heat pumps and integrated power electronics modules have been developed by Chinese teams and later rolled out globally.

Valeo has around 4,500 R&D staff in China, with around one third in Wuhan, Hubei province.

Gu said China's scale, pace of innovation and ability to industrialize new technologies make it indispensable to Valeo's long-term ambitions.

"China is not only a major market," he said. "It is a key engine for validating technology and accelerating solutions to global scale."