PARIS (Reuters) – Valeo announced on Tuesday a new series of measures to mitigate the impact of American customs duties and allow it to achieve its 2025 objectives, after a first quarter marked by a decline of 2.1% of turnover attributable to a drop in production in Europe and North America in a turbulent context.

The French automotive supplier made a turnover of 5.3 billion euros over the first three months of the year (-0.8% on a perimeter and constant changes), because of the slowdown in the electric vehicle and customs duties market which deprive consumers and visibility manufacturers.

“Valeo has made the necessary decisions to keep its 2025 objectives and make this year a new stage of improving its profitability and its generation of cash,” said general manager Christophe Périllat quoted in a press release. “We accelerate the restructuring plans aimed in particular to reduce in the first half, by around 5% our administrative and commercial costs and by around 15% our investment expenses (…) compared to the previous year.”

The group, which this year aims for a turnover at least equal to the 21.5 billion euros of 2024, and at the best of 22.5 billion, as well as an improvement in its operating margin at 4.5-5.5% against 4.3%, also undertook an exhaustive magazine of its supply chain to reduce the plate of new customs rights.

For example, he moved from China to Mexico or the United States of plastic injection mussels for certain parts so that they comply with the USMCA free trade agreement (United States-Mexico-Canada) and can escape the 25%surcharges, explained Christophe Périllat during a press teleconference.

“Thus, thanks to the measures taken by Valeo, more than 90% of the products manufactured by the group in Mexico and imported to the United States comply with the USMCA agreement,” he added.

Compensation by customers

For the balance, Valeo always aims for 100% compensation of the additional cost by its customers. To date, more than 75% of the amounts concerned are already secured by compensation agreements and Valeo continues the discussions in order to reach the 100% target, he added.

During a teleconference with analysts, Christophe Périllat said he was hopeful of concluding discussions with all his customers by the end of the second quarter.

The American price environment remains very fluctuating. US Secretary of Commerce, Howard Lunick, announced on Tuesday that President Donald Trump was going to sign this day a decree granting car groups building vehicles in the United States a reduction in part of his new customs duties of 25% to give them time to repatriate the supply chains in spare parts.

Specialist in driving aids, Valeo concluded a new collaboration with Volkswagen a month earlier to improve systems allowing partially automated driving (level 2+) on board future vehicles produced on the MQB platform of the German manufacturer.

To date, the equipment supplier has marketed more than two billion ADAS sensors and its driving aid technologies equip no less with a new car out of three sold worldwide.

(Gilles Guillaume report, edited by Kate Entringer)

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