Lear Corp. net income down 15% due in part to lower sales in China and Europe
Lear Corporation, one of the largest suppliers of automotive seating in the world, reported third-quarter net income of US$ 253 million on sales of US$ 4.9 billion, down 15% and 2% respectively compared to same period of 2017. However, the company said its net sales during the first nine months of 2018 increased 7% to US$ 16.2 billion while its net income gained 3% to US$ 938 million.
“We again delivered strong sales and earnings results in the third quarter in the face of challenging macroeconomic conditions marked by significant volume declines, particularly in China and Europe, as well as foreign exchange volatility,” said Raymond E. Scott, Lear’s president and CEO.
During the earnings conference call, Scott highlighted Lear’s involvement in several major new programs in key vehicle segments. “Many of our most important programs are transitioning to new models, including GM’s full-size pickups in North America and the Ford Focus in Europe and China,” he said while also pointing out the launch of significant backlog with several premium vehicles, like the Mercedes GLE, the BMW X3, various Audi models, and the Jaguar I-PACE, which is Jaguar’s first all-electric vehicle.
The official revealed that the company ended production for the BMW X5 in June. The German automaker recently revamped its popular SUV but Lear decided not to supply components for the new version because the return profile did not meet the Michigan-based supplier internal thresholds. “We are using this capacity to launch the all-new Volvo S60,” Scott added.
The company revealed it’s supporting the launching of two new vehicles in North America, the Ford Ranger and the Chevy Blazer, which MexicoNow previously reported. “We are excited about these new product launches, because they contain some of the most complex technologies we have ever produced,” the official said. It’s worth noting that seats production for the Blazer is allocated in Coahuila, while some of the development also took place in Mexico, according to previous reports.
Lear operates 46 plants in Mexico. During the last four years the company has opened 12 plants in the country. The auto supplier estimates its Mexican workforce totaled 56,000 employees by the end of 2017.