PARIS (Reuters) – French auto parts maker Faurecia noticed gross sales decline greater than 10% within the third quarter on Tuesday as its prospects reduce manufacturing on account of a world scarcity of semiconductor chips.
The corporate, which presents car seats, dashboards, and gasoline techniques, reported gross sales of $ 3.43 billion ($ 4 billion), up from $ 3.82 billion in the identical interval in 2020. Shares had been down 1 to 0838 GMT. 9% again to 41.52 euros.
Nevertheless, Faurecia mentioned it outperformed the sector as a complete, citing data supplier IHS Markit’s October forecasts, which confirmed a greater than 19% decline in world car manufacturing.
Automobile makers like Renault, Volkswagen and Stellantis – a few of Faurecia’s largest prospects – have reduce their manufacturing targets and slowed demand for parts as a result of shortage.
Provide chain points have slowed automakers’ efforts to recuperate from final yr’s coronavirus lockdowns and transfer to creating electrical autos.
In a phone name with analysts, CFO Michel Favre mentioned the corporate would demand compensation if prospects “brutally” canceled orders with lower than a day’s discover. He did not say what the response was.
Along with the chip scarcity, Favre mentioned, Faurecia was additionally confronted with rising prices for metal and plastic.
He added that the corporate faces “important operational challenges” with its new workplaces in Detroit and Michigan, primarily on account of difficulties in recruiting expert employees, excessive employees turnover and rising salaries.
Faurecia reiterated its monetary steering for 2021, though circumstances stay very troublesome in the direction of the tip of the yr. It had lowered its forecast in September following IHS Markit’s forecast of a world auto manufacturing deficit.
The Stifel analyst Pierre-Yves Quemener mentioned that the corporate’s annual turnover – based mostly on 15.5 billion euros – will depend upon a rise in manufacturing by the tip of the yr, though the money circulation forecast appears “sure”.
Final week, IHS Markit estimated that the availability chain points would price the automotive business about 11 million autos this yr.
(Reporting by Sarah Morland; Enhancing by Subhranshu Sahu and David Holmes)
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