Conti-Spin-off Aumovio to Receive Nexperia Chips from China - Aumovio secures China chip license but faces declining profits in Q3
Aumovio, a Frankfurt-based automotive supplier, has secured a significant license from the Chinese government. This allows the company to source critical chips directly from China, a move that comes amidst a global surge in automobile production. Despite this breakthrough, Aumovio's financial results for the third quarter show a decline in revenue and profits.
Aumovio, which operates over 100 global sites, produces a wide range of automotive components including brakes, chassis systems, and vehicle electronics. The company, which spun off from Continental last year, is now an independent entity listed on the stock exchange. This independence allows Aumovio to tailor its processes more closely to the automotive sector, potentially leading to greater efficiency.
The license to source chips from China is a significant development, as it follows the lifting of export restrictions. Aumovio is not the only supplier to receive such a license, indicating a broader shift in Chinese policy. The chips will be delivered to Aumovio's site in Budapest before being distributed further, suggesting a streamlined supply chain.
However, Aumovio's financial performance in the third quarter was mixed. Revenue fell by 6.9% year-over-year to €4.5 billion, despite the global uptick in automobile production. Earnings before interest, taxes, and special items (EBIT) were nearly a third (30%) lower than the same period last year. The company's operating margin also shrank from 4.5% to 3.3%, even as research and development costs decreased. Aumovio posted a net loss of €19 million attributable to shareholders, reversing a €73 million profit from the prior year. Despite these challenges, Aumovio is increasingly securing contracts with Chinese automakers, indicating potential growth in this market.
Aumovio's license to source chips from China is a strategic move that could help the company secure its supply chain. However, the company's financial results suggest that it faces operational challenges. As an independent entity, Aumovio has the opportunity to address these challenges and capitalize on its newfound flexibility. The company's ability to secure contracts with Chinese automakers suggests that it remains a competitive player in the global automotive market.
