The fact that Western auto brands suffer competition from those in the People’s Republic doesn’t necessarily mean OEMs are suffering from the same problem. On the contrary. Big components’ suppliers can make friends with the Chinese, and a glance at first-quarter 2025 results says that it’s from emerging businesses like BYD, that the resources to weather the current context come from. Many more headaches, at the moment, are created by the Trade War, which disrupts plans, especially in North America.
Suppliers can make friends with the Chinese
Let’s take the results of Forvia (formerly Faurecia): in January-March 2025 it reported a 2.1% year-on-year growth in turnover (€6.7 billion). Looking at geographies, there’s a noticeable difference between the performance in China (+4.6%) and North America (-2.2%), where the company is struggling to reach agreements with U.S. customers on how to absorb higher costs caused by Trumpian protectionism. In the same quarter, Lear reported negative results. Compared to 2024, revenue fell (from $6 billion to $5.6 billion), along with profits (down from $109.6 million to $80.7 million) and adjusted earnings (down from $183 million to $169 million). The only positive note was EBIT (up from 4.7% to 4.9%) due to realized efficiency. Also standing out in Lear’s production geographies is the flop in production volumes in North America (-5%) and Europe (-7%), against the boom levels in China (+12%).
But not with the Trade War
Of course, one shouldn’t risk focusing on the glass half full and losing sight of the empty portion. While the European market suffers its own crisis, the North American market is threatened by the Trade War. “Changes to global tariffs”, is the comment of Ray Scott, president and CEO of Lear, “create uncertainty for the automotive industry, making it difficult to forecast global production and affecting the cost structure of the global supply chain”. Translated: it makes it difficult to plan ahead. The Trump administration’s trade war should strengthen, at least theoretically, U.S. manufacturing. Is there room for development for the leather product business? According to ILM, at the moment, it’s more likely to expect widespread cost increases.
Read also:
