Car parts group Forvia's sales dragged by weakness in China
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The logo of Forvia is seen on the company's building in Nanterre near Paris, France, October 16, 2024. REUTERS/Sarah Meyssonnier
April 24 (Reuters) - Forvia said on Friday that a sharp sales decline in China caused a 2.2% drop in the French car parts supplier's first-quarter revenue, excluding currency translation effects.
Quarterly sales fell to 5.14 billion euros ($6.00 billion), driven by a 23.5% slump in the world's second-biggest economy, which was hurt by unfavourable customer mix and notably a significant drop in production at automaker BYD.
Forvia's shares fell 2% in early Paris trading.
"Recently, BYD’s growth rate has changed, so we have been driven by them, particularly in the last few years. However, there is now increased competition from other customers, so this is having an impact," Forvia's finance chief Olivier Durand said in a call with journalists.
The company still outperformed the 3.4% decline seen in global automotive production, according to S&P Global Mobility forecasts published this month, as it reported growth across all its other regions.
It also recorded 2.2% sales growth in the Clean Mobility business, covering its vehicle depollution activities for all non-electric vehicles, which was driven by Stellantis and General Motors in North America.
"At the same time, we have continued to make progress on the planned divestiture of our Interiors business, which we expect to materialize in the near term," CEO Martin Fischer said in a press release.
Durand declined to comment on a Bloomberg News report that on Thursday said private equity firm Apollo was nearing a deal to buy the interiors business for about 1.4 billion euros.
He confirmed that, following Stellantis’ withdrawal from joint venture Symbio, Forvia and Michelin would move to a 50-50 partnership.
"The execution of the plan will be swift, as we now have the Commercial Court’s homologation decision," Durand said.
Forvia said it had seen no significant impact from the turmoil in the Middle East and confirmed its 2026 guidance.
($1 = 0.8563 euros)
(Reporting by Mathias de Rozario in Gdansk, additional reporting by Gilles Guillaume in Paris, editing by Milla Nissi-Prussak)
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