Auto suppliers are under pressure as the automotive industry grapples with a costly shift to electrification and manufacturers such as Fiat-maker Stel
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Auto supplier Valeo is seeking buyers for two car parts plants and a research and development centre in France amid a Europe-wide decline in car production.
The two plants no longer have sufficient business and the research centre would have required an expensive overhaul to remain in operation, a Valeo spokesman said by phone. All options are on the table for the sites, he said, including selling them to Chinese buyers. He added that the top priority is to protect jobs. About 1,000 people are employed across the three sites.
The L’Isle-d’Abeau plant close to Lyon had already been revamped to produce systems needed to electrify cars, bicycles, scooters, motorcycles and other vehicles. Still, there was a dropoff in orders as the new technology didn’t bring in enough clients, according to the Valeo spokesman.
Auto suppliers are under pressure as the automotive industry grapples with a costly shift to electrification and manufacturers such as Fiat-maker Stellantis NV shift production and R&D resources to lower-cost countries outside of Western Europe. Difficulties have been compounded by a slowdown in demand for electric vehicles in key markets such as Germany and Italy due to high sticker prices and subpar charging infrastructure. That has led some automakers to adjust their EV plans.
Car production at Stellantis in Italy, for example, decreased by 36 per cent in the first half of this year. At the Mirafiori plant in Turin, where electric Fiat 500s are assembled, first-half production slumped 63% and will be halted again between July 15 and Aug. 25, two local labour unions said last week. Stellantis Chief Executive Officer Carlos Tavares has openly urged suppliers to axe costs and move their own manufacturing sites to cheaper regions.
Volkswagen AG also said it may shutter an Audi electric-vehicle factory in Belgium to save costs.
Valeo is willing to move some research and development jobs to other sites in the Paris region if needed, the spokesman said. Worker representatives were informed of the plan on Monday. The decision was reported earlier on Tuesday by Agence France Presse.
First Published Date: 17 Jul 2024, 07:11 AM IST