UPDATE 2-Faurecia raises forecasts, Q3 sales fall 21 pct

* Faurecia Q3 sales 2.27 bln euros

* Raises H2 targets

* Shares down 4.3 percent

(Adds extra comments from analyst presentation)

PARIS, Oct 20 (Reuters) - French auto parts manufacturer Faurecia (EPED.PA) said it was optimistic about the second half after raising its forecasts on Tuesday despite posting a 21 percent drop in third-quarter sales.

Faurecia said the situation had improved in North America and Europe, with sales down less sharply than in previous quarters after governments stepped in to boost car sales with incentive schemes. Asia also showed "strong growth", it said.

Faurecia posted third-quarter sales of 2.27 billion euros ($3.39 billion) and now expects only a 5 percent fall in second-half sales in Europe, compared with a previous forecast for a 10 percent drop, it said in a statement.

Sales in North America are expected to drop 25 percent compared with an earlier expectation of a 35 percent decline, Faurecia added.

"All in all, Faurecia has today a better feeling about its activity," the company said in a presentation for analysts.

Shares in Faurecia were down 4.3 percent at 0749 GMT.

Faurecia confirmed that it expected to see "sustained growth" in Asia, where sales rose 30 percent in the third quarter.

In September, the group's sales fell 13 percent, Faurecia said.

"Against this backdrop, and as a result of the cost reductions achieved by the Challenge 2009 plan, Faurecia is targeting, for the second half of the fiscal year, positive operating income, together with global cash flow close to break-even," Faurecia said.

The group said the cash-flow target was estimated at 80 million euros after restructuring costs. Previously it had not taken into account the restructuring costs in the goal.

The company had said in July that it expected operating income to be close to break-even in the second half. [ID:nLL714676] ($1=.6694 euros) (Reporting by Helen Massy-Beresford; Editing by James Regan and Mike Nesbit)