(Reuters) – Aptiv PLC cut its annual sales forecast on Thursday as the auto parts supplier navigates a challenging marketand a decline in overall automotive production.
The auto industry faced a bumpy second-half of the year as competition from Chinese companies increased and a decline in consumer demand due to inflation and economic concerns.
The transition to an EV-first future has presented challenges for many automakers, who have prioritized production of higher-margin vehicles, such as affordable crossovers and hybrid models, over EVs.
Companies like Aptiv and Magna, which specialize in manufacturing parts and components for electrified vehicles, will likely feel the impact of this shift.
Dublin-based Aptiv, counts the Detroit Three automakers as well as German automakers Volkswagen AG and BMW as key customers and supplies key electrical components and safety software for vehicles.
Aptiv also faces cascading costs associated with expensive semiconductors, which are are essential for powering various features in modern, connected vehicles, including infotainment systems and heads-up displays, among other components.
Auto supplier BorgWarner also cut its annual sales guidance to account for lower market production.
Aptiv expects its annual revenue to be between $19.6 billion and $19.9 billion, compared to its prior estimate of between $20.1 and $20.4 billion.
On an adjusted basis, Aptiv earned $1.83 per share during the quarter ended Sept. 30, compared to analyst estimates of $1.68, according to data compiled by LSEG.
Overall revenue fell 5% to $4.9 billion compared with analysts estimates of $5.2 billion.
(Reporting by Nathan Gomes in Bengaluru; Editing by Tasim Zahid)
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