Car parts supplier Forvia cuts 2024 outlook again, to speed up job cuts

By Nathan Vifflin

(Reuters) - French car part supplier Forvia cut its annual sales and profit forecasts for the second time in three months on Friday, reflecting weakness in the European and North American markets and delays in China.

"We have lost, versus last year, about 2 million vehicles, and maybe this might increase until the end of this year. This gap is concentrated on the second half," CEO Patrick Koller said about the lagging global auto demand during a conference call.

Forvia expects its sales to come between 26.8 billion and 27.2 billion euros ($29.9 billion and $30.4 billion) this year, instead of the lower end of 27.5 billion to 28.5 billion euros previously. It sees an operating margin of 5.0% to 5.3% of sales, down from 5.6% to 6.4% initially.

The company, which last cut its annual targets in July due to weak auto demand and a slowdown in electrification trends, also said it would accelerate its job cutting plans in Europe.

Out of the planned 10,000 cuts, it expects to carry out more than 2,800 by the end of the year, with a cumulated headcount reduction of 5,800 by the end of 2025. It said a majority of the cuts, originally set for 2024-2028, would be completed by end-2027.

"The objective is clearly to accelerate. That's why we are mentioning that more than 90% will be done one year before the end of the project, manifesting the acceleration," Koller said.

Forvia supplies automakers such as Stellantis (NYSE:STLA ), Volkswagen (ETR:VOWG_p ) and which are struggling with strikes, possible plant closures and ailing electric vehicle demand.

Its shares were up 4.8% by 0746 GMT, the second biggest gainers on France's SBF 120 index after they reversed course from an initial decline. The autos and parts sub-index on Europe's benchmark STOXX 600 meanwhile rose 1.7%.

($1 = 0.8959 euros)

Source: Investing.com