* Faurecia expects auto production in Europe to fall 1 pct in H2
* Company reiterates full-year goals
* First-half net income fell 71 pct to 35 million euros
By Laurence Frost
PARIS, July 25 (Reuters) - Faurecia predicted that European auto production would begin to stabilize later this year, helping the French parts maker meet 2013 goals despite a first-half profit slide.
The supplier, 57.4 percent-owned by troubled carmaker PSA Peugeot Citroen, said on Thursday its net income shrank 71 percent to 35 million euros ($46 million) in January-June, despite a 5.7 percent gain in revenue to 9.27 billion euros.
Profitability was "impacted by the continued decline of European automotive production", Faurecia said in a statement.
However, the maker of dashboards, exhausts, door panels and seats, based in the Paris suburb of Nanterre, renewed its projection of raising full-year sales to 17.8-18 billion euros from 17.4 billion in 2012 and increase operating profit.
European vehicle production will fall just 1 percent in the second half, Faurecia forecast - a more modest decline than the estimated 3.7 percent contraction in the first half.
Auto suppliers are racing to refocus business on faster-growing markets as Europe's five-year auto slump hurts business at home. Faurecia, which is cutting thousands of jobs, said first-half revenue tumbled 2.8 percent in the region but rose 18 percent in the rest of the world.
The group's operating income declined to 256 million euros from 304 million a year earlier, eroding its operating margin to 2.8 percent from 3.5 percent in the year-ago period.
Faurecia kept costs under tight control, with capital expenditure falling 8.6 percent year-on-year to 243 million euros. Net debt edged 100 million euros lower in the six months to June 30, when it stood at 1.71 billion euros.
Cash flow, which was close to breakeven in the half, should come in at a positive 120 million euros for 2013 before restructuring costs, Faurecia also said. ($1 = 0.7555 euros) (Reporting by Laurence Frost; Editing by Ken Wills)