Forvia looks to Chinese automakers for future sales growth

By Nathan Vifflin

(Reuters) -European automotive supplier Forvia's order intake grew by 1 billion euros ($1.1 billion) in the first quarter of 2024 driven by new deals with Chinese carmakers, it said on Thursday.

The company's shares were 4% higher at 0849 GMT after it also said organic sales rose 3.1% driven by a strong performance in North America.

Forvia, which produces parts for Stellantis, Volkswagen and Ford, and also supplies Chinese manufacturers, said more than half of orders worth a total of 6.5 billion euros came from Asia, most of them from China.

Car parts makers have been affected by falling auto demand and a shift in the European business dynamic as Chinese automakers plan new production sites there.

Chief Financial Officer Olivier Durand said many of Forvia's Chinese customers were considering sites in Europe, pointing to automaker BYD's plan in Hungary as an example.

"The development of the China OEM offer is not only about China, and that's really not only about Asia, it's also in Europe," Durand told reporters.

Last week, Forvia, born from Faurecia's 2022 takeover of Hella, announced a new partnership with Chinese carmaker Chery to develop sustainable cockpit modules using low-emission materials and processes.

First-quarter sales in Asia were mixed, with an organic decline of 2.5% even as car production in the region grew by 4.3%, Forvia said.

That was due to a drop in sales to BYD not being fully offset by a sales ramp-up with other manufacturers such as Chery, Leap Motor, and Li Auto, Forvia said.

Organic revenue in North America grew 6.8%, mainly driven by higher sales in the seating business, while auto production increased by 1.4%.

In Europe, organic sales eased 0.3% due to a temporary slowdown in electrification, Forvia said. Car production declined by 4.7%.

($1 = 0.9362 euros)

(Reporting by Nathan Vifflin in Gdansk; editing by Milla Nissi, Kirsten Donovan)