Business News


Hidria cautious, expects end-year sales down by a fifth

Idrija, 12 July (STA) - Industrial conglomerate Hidria, a major car industry supplier, expects end-year sales to decline by a fifth compared to 2019 due to coronavirus. Despite the hit, the company is well prepared for tectonic changes awaiting the automotive industry, CEO Iztok Seljak told the STA.

The first quarter of the year was comparable to 2019, but April brought a "dramatic decline in orders", which then stabilised at a very low level in May before picking up in June and July.

"Unfortunately this does not mean the crisis is over... A serious exit from the crisis remains a remote prospect," Seljak said.

Aside from cutting costs, including slashing executive pay by 20%, the group leveraged measures such as temporary layoffs and short-time work.

"The government measures were undoubtedly relevant and effective. But based on this experience, Slovenia must now proactively work on this mechanism and its systemic response to such crisis situations."

Seljak says the situation in the automotive industry, which accounts for some 70% of group sales, is very complex, with coronavirus "just a small part of the whole, although not unimportant. It will definitely accelerate certain processes."

Several processes have been unfolding side-by-side in the industry: fast transition to highly efficient diesel and gasoline engines, hybridisation and electrification, and new sharing economy models.

Hidria has been intensively working on hybrid and electric technologies since 2005 and currently supplies parts for many models of hybrid and electric vehicles.

In the last two years, it secured new long-term contracts for cutting-edge products, including an EUR 300 million-plus deal to supply hybrid drivetrain components to BMW and Mercedes.

Seljak thinks the coronacrisis will accelerate the trend towards minimisation of impacts on the environment, with Hidria well positioned to benefit.

Sales in the e-mobility segment are already on a par with sales directly related to diesel, a segment that has undergone radical improvements thanks in part to Hidria's innovations, according to Seljak.

Hidria plans significant investments in the e-mobility segment in 2022/2023 and expects the state to help.

"Just like the state helped bridge the biggest operating crisis by participating in labour costs to protect jobs, it will now be extraordinarily important that it participate in development costs."

Talks are currently under way with the Economy Ministry on a EUR 100 million package for green mobility investments, he said.

You might be also interested in:

GET IN TOUCH

We are here to help you.