* Industrial sales starting to stabilise -CEO
* Automotive growth continues to outpace market -CEO
* But CEO says tough to sustain high automotive margins
(Adds CEO comment, detail and background)
BERLIN, April 26 German auto parts supplier
Schaeffler said sales at its industrial division
likely returned to growth in the first quarter after three years
Sales in industrial operations, which accounted for nearly a
quarter of Schaeffler's 13.4 billion euros ($14.60 billion) of
group revenue in 2016, are beginning to stabilise, Chief
Executive Klaus Rosenfeld said on Wednesday.
Growth at the automotive division, which makes components
for transmissions and engines used by major carmakers including
Volkswagen and Daimler, continues to
outpace global car markets, the CEO said.
"We have started well this business year," Rosenfeld said at
Schaeffler's annual general meeting in Nuremberg.
But it will be difficult to sustain strong margins in
automotive operations given rising steel prices, high R&D costs
and heightening competition, the CEO said. Last year, the
division reported a 14.4 percent margin before special effects,
compared with 7 percent in industrial operations.
Counting on new business opportunities from an expected rise
in demand for electric cars, the increasing web-connectedness of
traditional industry and digitisation, Schaeffler aims to
increase sales by as much as 6 percent per year by 2020,
compared with 3.4 percent last year.
Schaeffler, which owns a 46-percent stake in rival
Continental AG and is listed on Germany's mid-cap
index MDAX, is scheduled to publish first-quarter
results on May 11.
($1 = 0.9179 euros)
(Reporting by Andreas Cremer; Editing by Maria Sheahan)