French automotive parts manufacturer Forvia announced Friday that its first-quarter earnings took a hit due to declining sales in the Chinese market, resulting in a 2.2% revenue decrease when currency fluctuations are excluded.
The company’s quarterly earnings dropped to 5.14 billion euros ($6.00 billion), primarily attributed to a steep 23.5% decline in China, the globe’s second-largest economy. This downturn stemmed from an unfavorable customer portfolio and a substantial reduction in manufacturing at electric vehicle maker BYD.
Following the earnings announcement, Forvia’s stock price declined 2% during morning trading in Paris.
“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,” Finance Chief Olivier Durand explained during a media conference call.
Despite the Chinese market challenges, the company managed to exceed the global automotive manufacturing decline of 3.4%, as forecasted by S&P Global Mobility this month, by achieving positive results in all other geographic markets.
The firm also posted 2.2% revenue increases in its Clean Mobility division, which handles emission reduction systems for non-electric automobiles, with growth fueled by partnerships with Stellantis and General Motors throughout 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,” Chief Executive Martin Fischer stated in an official announcement.
When asked about a Bloomberg News report suggesting private equity company Apollo was close to acquiring the interiors division for approximately 1.4 billion euros, Durand refused to provide commentary.
Durand verified that after Stellantis exited the Symbio joint venture, Forvia and Michelin would transition to equal ownership at 50-50.
“The execution of the plan will be swift, as we now have the Commercial Court’s homologation decision,” Durand noted.
The company indicated it has experienced minimal effects from Middle Eastern conflicts and maintained its projections through 2026.
