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Forvia, France’s largest automotive equipment supplier and the world’s seventh-largest automotive parts supplier, announced its intention to cut 10,000 jobs in Europe over the next five years, including at its subsidiary Hella, as part of its new “EU-Forward” plan. Forvia stated plans to reduce its European workforce by 13% through natural attrition and significant reductions in hiring. This move aims to reduce costs, enhance competitiveness, and address the challenges posed by the automotive industry’s transition to electrification.

Forvia, formed by the merger of Faurecia and Hella in 2022, currently employs 157,000 people worldwide, including over 15,000 engineers in 76 research centers. Forvia is one of the major suppliers of automotive components such as car seats, interiors, electronic systems, and lighting systems, and ranks as the seventh largest automotive technology supplier globally. The company’s sales in 2023 amounted to 27.25 billion euros, and although it has returned to profitability, it still carries debt.

The job cuts are part of its “EU-Forward” strategy aimed at reducing dependence on the Chinese market and optimizing R&D investments and costs. Currently, 27% of Forvia’s sales and most of its profits come from the Chinese market. According to Forvia’s 2023 report released on Monday, the company’s annual sales revenue was 27.25 billion euros, with an operating profit of 1.439 billion euros, representing increases of 10.9% and 35.7% respectively compared to the previous fiscal year. However, investors quickly noticed issues: while nearly half of the company’s revenue comes from the EMEA region, including its European headquarters, it only occupies 20% of its operating profit.

In addition to Forvia, other automotive component suppliers such as Continental, Robert Bosch, and ZF Friedrichshafen have also announced job cuts, with ZF even warning that it may need to cut up to 20% of its workforce. Industry insiders point out that due to slower-than-expected growth in the electric vehicle market and historical low car sales, automotive component suppliers already have made massive investments in electrification, but now they are facing market shocks.

Source: WeChat Official Account—鑫椤锂电

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