The year 2023 is drawing to a close. For multinational auto parts giants, the recovery of the global auto market from 2022 has greatly boosted their performance. At the same time, with the acceleration of the Chinese car market, the slowdown in demand for electric vehicles in Europe and the United States, superimposed supply chain, high interest rates and other problems, many parts manufacturers are worried, lowered future expectations, and even started layoffs. The situation of semiconductor manufacturers and power battery manufacturers, which were highly sought after when "lack of core and less electricity" in the past two years, has also changed. As far as performance itself is concerned, with the recovery of automotive industry production in 2023 and the increase in demand, most multinational parts manufacturers have achieved good results, and there are not a few revenue and profit risers. In the latest third quarter, for example, Continental swung back to a net profit of €299m, compared with a loss of €211m a year earlier. Amboford's net profit came in at $1.63 billion, compared with $286 million a year earlier. Net income at Magna rose 36 per cent year on year to $394m. In addition, Lear, Dana, Autoliv and other manufacturers have also achieved substantial profit growth.
In contrast, affected by the downturn in the semiconductor industry, many semiconductor manufacturers' performance declined. In the third quarter of this year, for example, Samsung Electronics' operating profit plunged 77.6% from a year earlier. Among them, Samsung Electronics' biggest loss business is its proud semiconductor division, with a cumulative loss of 12.69 trillion won (about 70 billion yuan) in the first three quarters. In addition, in the third quarter, TSMC's net profit also fell 25% year on year, SK Hynix net loss of 2.18 trillion won (about 12 billion yuan). As for battery companies, Panasonic revised down its operating profit forecast for the full fiscal year, and LG New Energy believes its revenue growth will slow in 2024. This is mainly due to the slowdown in demand for electric vehicles in Europe and the United States.
Although the European and American electric vehicle market has signs of slowing down, but for long-term consideration, the traditional parts companies represented by BorgWarner still regard the electric business as the pillar of future growth, and continue to reduce the weight of the internal combustion engine business, stripping and mergers and acquisitions alternately staged. In July, BorgWarner announced that its Fuel Systems and aftermarket division had been successfully spun off into a separate publicly traded company, PHINIA. What remains is its valued Air management division and electric Drive and transmission Division. Chief Executive Frederic Lissalde said BorgWarner announced its "charging forward" strategy two years ago to accelerate the transition to electrification, which included the disposal of $3 billion to $4 billion in fuel-related revenue by 2025, the completion of the PHINIA spin-off, and the sale of the North American control business in 2022. Are an important part of it. The Freia Group, formed by the merger of Faurecia and Hella, is also accelerating deleveraging, and revealed in its third quarter earnings report that the remaining transactions of the original €1 billion asset divestiture plan will be completed by the end of 2023, and the company has launched an additional €1 billion asset divestiture plan. The first deal was Hella's announcement in October of the sale of its 50% stake in Baier Hella Temperature Control (BHTC).
In addition, on November 27, Schaeffler Group and Peipai Technology officially signed a business merger agreement. Weipai Technology, formerly the powertrain department of Continental Group, has gained a reputation in the field of electrification after "flying alone" and has repeatedly won large orders. Schaeffler's acquisition of Peipai Technology is mainly aimed at its electrification business. After the merger, the related businesses will also be integrated into a new electric Drive business unit, which will become the largest revenue pillar of the new company by 2030.
The decline in the weight of the internal combustion engine business means fewer jobs. As Schaeffler said, as the industry transitions to electric vehicles, car companies continue to cut research and development projects related to internal combustion engine vehicles, resulting in excess capacity of internal combustion engine related products. To that end, Schaeffler announced plans last year to cut 1,300 jobs. Continental also said in recent days that it would cut some jobs in its auto division, cutting thousands of jobs to save money. Furia also closed a seating factory and laid off more than 500 workers. Goodyear plans to cut 1,200 jobs in Europe, the Middle East and Africa. In June, Autoliv announced it would cut 8,000 jobs worldwide by 2025 and close several European plants to reduce costs. In addition to traditional businesses, cutting-edge businesses have not been spared. As early as the beginning of this year, Amazon, Google parent company Alphabet, Microsoft, IBM and other technology giants have intensively released large-scale layoff plans, a total of more than 40,000 people. In the context of the large-scale layoffs of the parent company Alphabet, Waymo, a subsidiary of the self-driving startup, is naturally difficult to escape, laying off more than 200 people at the beginning of the year, and then confirmed a new round of layoffs in October, the number of undisclosed. Gm's Cruise, another self-driving star, also announced layoffs in early November. Its self-driving business was halted after an accident. After a series of setbacks, GM plans to slash its investment in Cruise. "We expect Cruise to expand at a more measured pace once operations resume." Gm Chief Executive Mary Barra said in late November. The experience of Waymo and Cruise also highlights the current commercial difficulties of advanced autonomous driving.
In recent years, it seems that every year there is a fraud scandal in the Japanese auto industry, and 2023 is a more notable one is Hitachi Astemo (Astemo) fraud problem. Hitachi Astamo is a parts joint venture between Hitachi and Honda and is Japan's third-largest auto parts maker. On May 19 this year, Hitachi Astamo announced the results of an investigation into the brake and suspension system quality inspection fraud disclosed at the end of 2021. The results showed that 22 products produced by the company, including auto/motorcycle parts, railway vehicle parts and industrial parts, were found to have falsified quality inspection in 15 domestic and foreign factories. More than 200 million products have been shipped, some of which date back as far as 40 years. Nor is this alone. Prior to this, Hitachi Chemical and Hitachi Metal, the core components of the Hitachi Group, also exposed illegal detection, tampering with data and other fraud. Hitachi Anstemo shareholders adjusted the shareholding structure after the fraud problem was exposed. Originally, Hitachi Group and Honda held 66.6% and 33.4% respectively, and then introduced investor JIC Capital, which held 20%, while Hitachi Group and Honda each held 40%. The shareholders pledged to jointly drive the electrification transformation of Hitachi Anstamo, saying that "Hitachi Anstamo will seek to accelerate investments in advanced technologies such as electric powertrains for vehicles, autonomous driving/advanced driver assistance systems, advanced chassis and next-generation motorcycles."
