Faurecia doubts Renault, PSA can go upmarket-paper

FRANKFURT Feb 15 (Reuters) - France's two carmakers Renault and Peugeot Citroen will find it very difficult to move upmarket where there is greater pricing power and higher margins, said the chief executive of French supplier Faurecia.

When asked by German daily Handelsblatt how France could strengthen its carmakers, Yann Delabriere replied: "It takes a long time before one is recognised as a premium carmaker.

"Things are possible in Germany that are not in France. In Karlsruhe, for example, we cooperate very well with the Fraunhofer Institute -- unfortunately France doesn't have anything of the kind."

The Fraunhofer Institute, which participated in the development of the MP3 audio format, is a publicly and privately financed institutions that undertakes research with the aim of turning it into practical applications.

Delabriere said he expects European car production to decline by 4-6 percent in 2012 even if northern Europe manages to eke out some growth.

By comparison, he expects auto production to grow by 6 percent in North America and by 7-9 percent in China this year.

Faurecia, which is majority owned by Peugeot, posted revenue of 16.2 billion euros ($21 billion) and generated an operating margin of 4.0 percent last year. ($1 = 0.7616 euros) (Reporting by Christiaan Hetzner)