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French car parts maker Valeo has said the industry is undergoing a “Darwinian transformation” and warned that most job losses at the company will be in Europe unless Brussels protects the sector from Chinese competition.
Christophe Périllat told the Financial Times that the declining car market “demands a constant optimisation and adaptation that is permanent”, saying his company had not finished with restructurings that led it to close 38 sites from 2022 to 2025, while opening only four in the same period.
The warning comes as the European Commission gears up to respond on December 10 to demands from the industry, including Valeo, to tweak its target to ban new sales of combustion engines in 2035 and introduce rules on the amount of European-produced content in cars.
Clepa, the European industry body for car suppliers, has warned that up to 350,000 jobs could be lost by 2030 unless action is taken.
“We need to revive the market. We mustn’t let the European car market sink as it is, and I think it’s possible to change things,” said Périllat, adding that he was “optimistic” that change was possible if Brussels protected the industry.
European suppliers including Michelin and Forvia in France and Bosch in Germany have made mass lay-offs in recent years to cope with the downturn. Job losses in the industry have more than doubled in the region in 2024.
Parts makers have also struggled from supply chain disruption, particularly linked to chipmaker Nexperia, a Netherlands-based but Chinese-controlled company. The Dutch government seized control of the group last month over governance concerns, leading Beijing to curb exports of chips to the company. The Netherlands suspended its intervention last week.
Valeo was affected by the disruption but Périllat noted that the situation was “in de-escalation”, adding that the company had been able to source parts for its factories to continue.
Valeo, whose products include lighting, heating and camera systems for cars, has struggled in recent years. It said it expects to report €20.5bn in revenue for 2025, €7bn below its expectations when it outlined its previous strategic plan in 2022, as demand for electric cars has fallen short of previous hopes.
In Europe, the market is particularly “sluggish”, Périllat said. “These are facts we can lament, but there are also things we can do about them,” he said.
The “majority” of Valeo’s future restructuring would take place in Europe unless there was a “recovery” in the region, he added.
The group announced a new strategy on Thursday aimed at boosting profitability and cash flow but said it envisaged no increase in revenues before 2027. The plan was received poorly by investors, prompting a 13 per cent slide in its shares on the day.
The plan includes €100mn a year in restructuring costs from 2026 onwards, in addition to the €400mn that Valeo has said it has incurred since 2022 amid a swath of job losses. Périllat said the company had already done “a big part of the job”.
He added that Valeo had “opportunities” because suppliers were “in difficulty” around the world, pointing to the bankruptcy of American car parts group First Brands and Italian parts maker Marelli, both of which have entered Chapter 11 proceedings in the US.
By contrast, Périllat said the company was seeking to grow in the US, India and China.
“China is a third of the global market and it’s 15 per cent of our sales . . . We can do more and better and we will do more and better,” he added.
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