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Germany's Duerr sees auto investment climate improving

By Hendrik Sackmann

STUTTGART, Germany (Reuters) - Germany's Duerr AG , which supplies paintshops to carmakers, may increase its full-year targets later this year thanks to booming business in China and the United States.

"We will decide in the third quarter whether we need to adjust our forecast, but we certainly won't be discussing a downward revision," Chief Executive Ralf Dieter told Reuters, adding new orders and profitability were at the upper end of the company's range of expectations.

"The investment climate is brightening," he said.

The company, which supplies robots to paint car bodies and benefits when carmakers expand production capacity, has forecast new orders of between 2.3 billion euros ($3 billion) and 2.5 billion and an operating margin of 7.0 to 7.5 percent this year.

Last year Duerr generated incoming orders worth 2.60 billion euros and achieved a 7.4 percent margin.

It is due to report second-quarter results on August 1 and third-quarter figures on November 6, which is when Duerr might raise its forecast for this year.

Dieter said his business was getting a lift from a higher-than-expected 22 percent increase in car sales in China, its largest market, in the first five months of this year.

"Some projects are now being tabled that automakers actually wanted to address next year, but as car sales increase, investments follow," the Duerr CEO said.

Dieter said he did not expect rising tensions in China's interbank lending market to affect the car market, given that automakers finance their expansion in China internally and the fact that private consumers there seldom make use of financing deals to buy a car.

"A credit crunch in China would not impact us nor our customers," he said.

China, which accounted for roughly 850 million euros of the company's new orders last year, is not the only part of the world where Duerr's business is improving.

"Our customers in the U.S. are optimistic, so more is being invested in the retooling, modernization and automation of car plants. Many factories are manufacturing around the clock due to the continued boom in pick-ups," Dieter said. ($1 = 0.7612 euros)

(Writing by Christiaan Hetzner; Editing by Marilyn Gerlach and David Holmes)

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