Auto parts giant Forvia SE (OTC:FAURY) (OTC:FURCF) is set to cut up to 10,000 jobs, aiming to achieve an annual savings of approximately €500 million in 2028.

Monday, the company reported fiscal year 2023 sales of €27.25 billion, up 10.9% Y/Y (+14% on an organic basis). Worldwide automotive production increased 9.7% to 90,321.

The move comes as the company grapples with the global transition towards electric vehicles (EVs), driven by European Union policies, declining car sales in Europe, and the growing presence of Chinese EV manufacturers in the European market, the Wall Street Journal noted.

In response to the evolving EU climate policies phasing out gas-burning vehicles, Forvia emphasizes the necessity to stay competitive in a market where car sales volumes still lag behind pre-pandemic levels.

The company also highlights the changing customer landscape, with the expansion of Asian electric-car makers in Europe contributing to the need for adaptation.

The restructuring aims to improve profitability in Europe and reduce dependence on the Chinese market.

Despite Forvia’s strategic adjustments, the automotive industry’s electric vehicle pivot faces challenges, exemplified by setbacks in the home market, where French automaker Renault recently canceled the IPO of its electric-car unit Ampere.

Meanwhile, Chinese automaker BYD Co Ltd (OTC:BYDDF) (OTC:BYDDY), surpassing Tesla Inc (NASDAQ:TSLA) as the top global EV seller, remains ambitious in its plans to boost overseas sales, including investments in transportation infrastructure and a new factory in Hungary.

Forvia forecasts 2024 sales guidance of €27.5 billion to €28.5 billion and approximately €30 billion for 2025.

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Benzinga

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Tuesday, February 20, 2024