French automotive supplier Forvia plans to cut up to 10,000 jobs in Europe over the next five years, in part through attrition, it said on Monday, becoming the latest auto industry player to react to falling demand and China's dominance.
Shares in the world's seventh-largest automotive supplier, which makes parts for companies including Stellantis, Volkswagen and Ford, and also sells in China, rose by more than 5% before reversing course to close down 12.7%, their worst one-day performance since late September 2022.
In a call, management's downbeat statements about the European automotive sector outweighed earlier positive signals about a plan to boost profitability in Europe, said analyst Adrien Brasey from Alphavalue.
"Forvia faces concerns from investors due to its strong exposure to a declining European market, accounting for 46% of its total revenue, along with mentions of manufacturing overcapacity in Europe and a changing client base as Chinese EV makers expand in Europe," he added.
Another analyst who asked not to be named said the magnitude of the restructuring and the comment about overcapacity in Europe had unnerved investors.
As carmakers cut production in Europe, leaving suppliers with excess capacity, shares slipped across the sector.
Shares in French car parts maker Valeo and German supplier Continental, which said last week it would reduce staffing, closed down 6.9% and 3.9% respectively.
https://www.reuters.com/business/autos-transportation/auto-supplier-forvia-cut-thousands-jobs-europe-2024-02-20/