Forvia cautious on 2022 sales as China, Ukraine cloud auto outlook – Reuters.com

April 26, 2022 by No Comments

April 26 (Reuters) – Forvia, the European car parts maker born from Faurecia’s (EPED.PA) takeover of German rival Hella (HLE.DE), issued its first annual targets at the low end of forecasts, citing caution linked to Chinese lockdowns and the war in Ukraine.

The combined group should generate sales of around 23 billion to 24 billion euros ($25 billion-$26 billion) this year with a profit margin of 4%-5%, it said on Tuesday in its first financial guidance since the deal was sealed in January.

Analysts polled by Visible Alpha had on average predicted combined sales of 24 billion euros for 2022 – a 54% jump from Faurecia’s revenues last year – with a profit margin of 6.0%.

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Forvia said its guidance was based on cautious estimates on worldwide automotive production, which have been revised down due to global supply disruptions linked to the war in Ukraine and new COVID lockdowns in China.

“Components are not the problem,” Michel Favre, Faurecia’s finance chief and Hella’s incoming chief executive, told journalists in a call.

“The problem is knowing what the final demand will be, and the situation in China – which is both a production and a demand problem.”

Lockdowns to manage growing COVID-19 flare-ups in the world’s largest auto market are stranding workers, shutting factories and clogging up ports, disrupting supply chains already shaken by two years of pandemic and Russia’s war on Ukraine. read more

Favre also noted inflation and continued risks to semiconductor chips supplies, but said shortages in Ukrainian-made wire harnesses, which had hampered production for customers such as Volkswagen and BMW (BMWG.DE), were being mitigated by back-up production in Romania and North Africa.

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Source: https://www.reuters.com/business/autos-transportation/forvia-cautious-2022-sales-china-ukraine-cloud-auto-outlook-2022-04-26/

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