Aumovio warns of years of weak auto production despite earnings beat

By Amir Orusov and Ilona Wissenbach

Nov 5 (Reuters) - German automotive supplier Aumovio reaffirmed its 2026 outlook on Thursday after reporting improved third-quarter profitability, while warning that global vehicle production is likely to remain weak for several years.

The company, which was spun off from Continental in 2025, reported an adjusted operating margin of 3.5% in the third quarter, above analysts' expectations of 3.1% in a Vara poll.

Chief Executive Philipp von Hirschheydt told Reuters he expected only marginal growth in global vehicle production over the coming years and was more cautious than forecasts pointing to a recovery in 2027.

"As a company, we are preparing for the major challenge of operating in a market that will only grow very marginally over the next few years," he said.

A meaningful recovery would require an improvement in China, where the market slowdown remained severe, he added.

With growth opportunities limited in Europe, Aumovio is focusing on diversification and market-share gains, particularly in Asia.

The company also expects at least €1 billion in gross cost headwinds in 2027 from higher prices for semiconductors, memory products and raw materials. Finance chief Claus Bauer said Aumovio would seek to pass those costs on to customers.

"The outlook for the German and European automotive industry is not rosy right now," von Hirschheydt said.

From Volkswagen and BMW to suppliers like Schaeffler and Bosch, Germany's auto sector has been weighed down by sluggish demand, triggering restructuring measures across the industry.

Supplier results have generally held up better than those of some automakers, including Volkswagen, as they restructure product portfolios to align with electrification and digitization, ING senior economist Rico Luman said.

(Reporting by Amir Orusov in Gdansk, additional reporting by Anastasiia Kozlova, editing by Milla Nissi-Prussak and Matt Scuffham)