By Mathias de Rozario
(Reuters) -Forvia has so far mitigated about 50% of its estimated exposure to U.S. tariffs and is on track to cover the rest, the French automotive supplier’s CEO Martin Fischer said in a call on Thursday.
Its shares were up 8% at 0905 GMT in Paris after a quarterly earnings publication.
Forvia exports goods manufactured in its Mexican plants into the United States and has since March been impacted by the 25% duties U.S. President Donald Trump imposed on Mexico.
The company, which supplies parts to Stellantis (NYSE:STLA), Volkswagen (ETR:VOWG_p) and Ford, is proactively mitigating that impact by securing pass-throughs with clients, negotiating supplier deals and adjusting its supply chain.
"We ensured that we used the pass-through and negotiation clauses with our customers, we are working to optimise our supply chain, we are also working to make maximum use of our factories in the U.S. and then to make costs more flexible at all the factories concerned," CFO Olivier Durand told reporters.
Forvia is also reducing investments to cope with market volatility, with a targeted cut of more than 100 million euros ($113.5 million) in capital expenditures and development costs in 2025 compared to last year.
It will cut additional fixed costs by freezing hiring globally, immediately reducing non-permanent contracts, restricting travel and cutting marketing expenses by cancelling its presence at the CES and IAA trade shows.
"The problem arises from the U.S. ... but all units are expected to contribute to these additional cost savings," CEO Martin Fischer said in a call with analysts.
Durand added in the press call that Forvia, which is seeking to sell off non-strategic assets by the end of 2026, had seen signs of interest mainly from non-European players.
Its sales grew 2.6% to 6.7 billion euros in the first quarter of 2025, outperforming the global automotive market, according to the S&P Global Mobility forecast published this month.
"A key point is that the Group is maintaining its guidance for 2025 despite a revision of S&P’s production forecasts," Midcap analyst Julien Thomas said in a note.
Forvia’s half-year sales in China grew 4.6% to 1.3 billion euros.
"Even if there is an overall underperformance in China, it includes a further increase in our business with Chinese OEMs, particularly the development of BYD (SZ:002594) and the ramp-up of our business with Chery," Durand said.
($1 = 0.8812 euros)