By Andrey Sychev
(Reuters) -French automotive supplier Valeo on Thursday cut its annual sales guidance for the second time this year, reflecting how hard the European auto sector is being hit by the weakening Chinese economy and uncertainty over the shift to electric cars.
Valeo is cautious about the next year as it sees a weaker global economy, including in China, persisting, but also new environmental regulations to add pressure on carmakers, which could together trigger further product launch delays.
“We see a market that is softer than anticipated, roughly in all geographical areas, for different reasons,” CEO Christophe Perillat said on a media call.
Europe’s auto sector faces multiple challenges ranging from high production costs and managing the shift to electric vehicles to falling demand and rising competition from China.
Valeo now sees 2024 sales at 21.3 billion euros ($23 billion) versus 22 billion euros previously, while it maintained its margin and free cash flow guidance for the year.
Sales fell by 5% to 5 billion euros in July-September, while analysts expected 5.1 billion in a company-compiled consensus.
Valeo, which designs and produces components and integrated systems for vehicles, including electric ones (EVs), said delays in product launches by customers as well as uncertainty around EV adoption hit global automotive production.
French peer Forvia reported falling third-quarter sales weighed down by weaker demand from China and increasing competition from local producers there.
($1 = 0.9260 euros)
(Reporting by Andrey Sychev, additional reporting by Etienne Breban; Editing by Andrew Heavens and David Evans)
