Aumovio Targets Broadly Stable 2026 Profitability in Tough Environment

Aumovio foresees stable 2026 profitability in troubled auto market

Aumovio’s 2026 Profitability Outlook and Market Challenges

By Amir Orusov

March 18 (Reuters) - German automotive supplier Aumovio, spun off from Continental last year, expects profitability of its operations to remain broadly stable in 2026, against a challenging industry backdrop.

Profit Margin Projections

The company said on Wednesday it saw an adjusted operating profit margin of between 3.5% and 5% in 2026, versus last year's 3.9%. Analysts polled by Vara had modelled an average margin of 4.4% for 2026.

Market Conditions and Competitive Pressures

Having debuted on the Frankfurt Stock Exchange in September, Aumovio faces a troubled market as Europe's auto sector is buffeted by U.S. import duties, cheap Chinese competition and supply chain uncertainties.

Leadership Response and Strategic Initiatives

"We are proactively countering headwinds while further strengthening our competitive position in this year of transition," CEO Philipp von Hirschheydt said in an earnings statement.

By doing this, the company is "creating the conditions necessary" to deliver on its long-term operating margin goal of 6-8%, he added.

Financial Performance and Efficiency Measures

Aumovio's net loss attributable to shareholders of the parent company widened to 655 million euros ($756 million) last year, from a loss of 289 million euros in 2024.

The company said it would continue executing its efficiency programme, involving up to 4,000 job cuts, throughout 2026.

Production Footprint Adjustments

It has also decided on additional steps for this year in Europe and Asia to right-size its production footprint to a level that sustainably supports efficient market penetration.

That will include the closure of two additional plants, one in China and one in Lithuania, and further 1,500 job cuts, von Hirschheydt said during a post-earnings call.

Further measures, potentially affecting other locations in Europe and Asia, are under discussion, he said. The company plans to concentrate on 45 production sites at most.

Managing Impact from Middle East

MANAGING IMPACT FROM MIDDLE EAST

Commenting on higher energy prices and supply bottlenecks caused by the U.S.-Israeli war on Iran, von Hirschheydt said Aumovio had the situation "well under control".

Commodity and Supply Chain Risks

He added the group was only marginally exposed to rising prices of commodity metals such as gold, silver and copper.

However, it is facing significant price increases for memory chips and working closely with customers to secure their supply for the automotive industry, the CEO said.

Exchange Rate and Reporting Notes

($1 = 0.8661 euros)

(Reporting by Amir Orusov in Gdansk; additional reporting by Ilona Wissenbach; editing by Milla Nissi-Prussak)