OPmobility's Plan to Mitigate US Tariff Effects
By Mathias de Rozario
(Reuters) -OPmobility plans cost reduction measures to deal with the impact of U.S. tariffs, the French car supplier's CEO Laurent Favre said in a call with journalists on Tuesday.
The company, which supplies the three leading U.S. carmakers, General Motors, Stellantis and Ford, said it is trying to anticipate a potential volume decline from its clients in the second half of the year.
"That's all the savings in operating costs, [...] everything linked to external service providers, everything linked to travel, everything linked to non-essential expenditure, and also a very strong emphasis on flexibility in our plants in line with the evolution of volumes," Favre said.
He added the company will also slow down investments with a target of a 5% to 10% investment reduction compared to usual levels.
"This does not, in any way, affect our long-term strategy," Favre said.
He added that they will continue to invest in technology, to improve their regional balance, to invest all over the world with a stronger focus on America and Asia, and to diversify their customer base by developing new entrants such as BYD, Chery, Tesla and Rivian.
The group also confirmed its full-year outlook, backed by its cost reduction measures and by a 3.1% consolidated revenue growth in the first quarter of the year.
The group's quarterly consolidated revenue came in at 2.69 billion euros ($3.08 billion), up from 2.61 billion euros a year earlier.
It outperformed global automotive production according to the S&P Global Mobility forecasts published earlier this month, led by its European and Asian markets.
North America, which accounted for more than 27% of the group's economic revenue, however recorded a 4.1% revenue drop mainly due to a decline in module volumes assembled in Mexico.
"It's a question of seasonality [...], some of our customers are launching new models, others are discontinuing them, so this happened in the first quarter, but it will be offset in the rest of the year," Favre said.
($1 = 0.8741 euros)
(Reporting by Mathias de Rozario in Gdansk; Editing by Chizu Nomiyama)
