French car parts maker Valeo posted slightly lower first-quarter sales on Thursday, as weak electric vehicle (EV) high-voltage activity overshadowed its traditional powertrain business.
“We’re currently experiencing disappointing sales volumes for electric vehicles, particularly in Europe, where we have major programmes,” CEO Christophe Perillat said in a media call.
As a result, EV high-voltage activity almost halved in the quarter, the CEO said.
To face those uncertainties, Valeo has been careful to no longer have plants only specialized in high voltage, but able to address both hybrids and EVs, Perillat said.
When asked about the compensation from carmakers for lower EV volumes, the CEO said during an analyst call: “In 2022 and 2023, we have been able to get the needed compensation for lower volumes. We expect that what we were able to get in 2022 and 2023, we will be able to get again in 2024.”
Its business for traditional and hybrid cars as well as ADAS (advanced driving assistance solutions) and lighting helped offset the decrease in EVs.
Car parts makers face slowing auto production, leaving suppliers with excess capacity, and are striving to reduce costs, including laying off workers, as Chinese EV makers expand in Europe.
Valeo, which designs and produces components and integrated systems for vehicles, said it outperformed automotive production by 2 percentage points in the first-quarter.
The company said it is well-placed with Chinese carmakers, accounting for 14% of its first-quarter sales, both for the Chinese market and for export.
It reported quarterly sales of 5.43 billion euros (USD 5.82 billion) in comparison to 5.48 billion in the year-earlier period.
The firm reiterated its outlook for 2024 and 2025.
