(AOF) – Forvia is making progress today in the execution of its second asset transfer program of 1 billion euros: the automotive supplier announces an agreement to transfer its 100% subsidiary, Hug Engineering, to the Belgian group Ogepar for an enterprise value of approximately 55 million euros. Hug Engineering specializes in pollution control systems for high horsepower engines, and is currently part of Forvia’s Clean Mobility business.
The cumulative cash proceeds from the closing of the sale by Forvia Hella of its stake in BHTC with those of the newly signed transaction, which is expected to close by the end of June 2024, are expected to represent a total amount of approximately 250 million euros, or around 25% of the second disposal program announced by the equipment manufacturer in October 2023, intended to accelerate the group’s debt reduction.
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Negotiations with manufacturers
On average, equipment manufacturers represent between 60 to 85% of the manufacturing cost price of a vehicle. According to the Federation of Vehicle Equipment Industries (Fiev) negotiations are very tense with manufacturers regarding the passing on of the increase in costs. The price increases concern electronic components, raw materials, such as steel, nickel, lithium or palladium, energy and transport. The equipment manufacturers mainly negotiate with Stellantis and Renault to set up indices to pass on the increases. They are also betting on innovation, differentiation, moving upmarket and internationalization.