© Reuters. FILE PHOTO: French automobile components provider Faurecia’s brand is seen in the course of the firm’s investor day in Paris, France, April 19, 2016. REUTERS/Charles Platiau
By Sarah Morland
PARIS (Reuters) – French automobile components maker Faurecia posted a greater than 10% drop in third-quarter gross sales on Tuesday, as its clients minimize manufacturing as a result of a worldwide scarcity of semiconductor chips.
The group, which provides automobile seats, dashboards and gas programs, reported gross sales of three.43 billion euros ($4 billion), down from 3.82 billion in the identical interval of 2020. Its shares have been down 1.9% at 41.52 euros by 0838 GMT.
Nonetheless, Faurecia stated it had outperformed the sector as an entire, citing October forecasts from data supplier IHS Markit that confirmed a greater than 19% decline in international auto output.
Automobile makers equivalent to Renault (PA:), Volkswagen (DE:) and Stellantis – a few of Faurecia’s largest clients – have minimize manufacturing targets as a result of scarcity, slowing demand for components.
The availability chain points have put the brakes on automobile makers’ efforts to get better from final 12 months’s coronavirus lockdowns and shift in direction of making electrical automobiles.
In a name with analysts, finance chief Michel Favre stated the corporate was asking for compensation when clients “brutally” cancelled orders with lower than a day’s discover. He did not say what the response had been.
On prime of chip shortages, Favre stated Faurecia was additionally dealing with challenges from rising prices of metal and plastics.
He added that the corporate had a “important operational problem” from its new operations in Detroit and Michigan, largely as a result of difficulties in recruiting certified employees, excessive employees turnover and rising salaries.
Faurecia reiterated its 2021 monetary steering, even when situations stay very difficult on the finish of the 12 months. It had minimize its steering in September after IHS Markit’s forecast of a worldwide shortfall in automotive manufacturing.
Stifel analyst Pierre-Yves Quemener stated the corporate’s annual income – guided at 15.5 billion euros – would depend upon a pick-up in manufacturing by way of the tip of the 12 months, although the money move steering appeared “protected”.
Final week, IHS Markit estimated the availability chain issues would price the automotive trade about 11 million automobiles this 12 months.
($1 = 0.8593 euros)
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