Valeo: Valeo Unveils New Measures to Offset Tariffs as Q1 Revenue Drops 2.1%

Valeo announced on Tuesday a fresh set of measures to mitigate the impact of US tariffs and help the company achieve its 2025 targets, following a first quarter marked by a 2.1% drop in revenue due to declining production in Europe and North America. The automotive supplier, a specialist in driver assistance systems, reported revenues of €5.3 billion for the first three months of the year--a decrease of 0.8% on a like-for-like basis--citing a slowdown in the electrified vehicle market and ongoing uncertainties related to tariffs. "Valeo has taken the necessary decisions to meet its 2025 objectives and make this year a new milestone in improving profitability and cash generation," said CEO Christophe Périllat in a statement. "We are accelerating restructuring plans, aiming to reduce administrative and commercial costs by around 5% and capital and intangible investments by about 15% in the first half compared to last year." The group has also undertaken a comprehensive review of its supply chain to reduce the base subject to new tariffs. For example, Valeo has shifted plastic injection molds for certain parts from China to Mexico or the United States to comply with the USMCA (United States-Mexico-Canada Agreement), thereby avoiding the 25% surtax, Périllat explained during a press teleconference. "Thanks to the measures taken by Valeo, more than 90% of the products manufactured by the group in Mexico and imported into the United States now comply with the USMCA agreement," he added. For the remaining products, Valeo is still targeting 100% compensation from its clients. To date, more than 75% of the amounts concerned are already secured through compensation agreements, and Valeo is continuing discussions to reach the 100% target, Périllat said. (Reporting by Gilles Guillaume, editing by Kate Entringer) Valeo announced on Tuesday a fresh set of measures to mitigate the impact of US tariffs and help the company achieve its 2025 targets, following a first quarter marked by a 2.1% drop in revenue due to declining production in Europe and North America. The automotive supplier, a specialist in driver assistance systems, reported revenues of €5.3 billion for the first three months of the year--a decrease of 0.8% on a like-for-like basis--citing a slowdown in the electrified vehicle market and ongoing uncertainties related to tariffs. "Valeo has taken the necessary decisions to meet its 2025 objectives and make this year a new milestone in improving profitability and cash generation," said CEO Christophe Périllat in a statement. "We are accelerating restructuring plans, aiming to reduce administrative and commercial costs by around 5% and capital and intangible investments by about 15% in the first half compared to last year." The group has also undertaken a comprehensive review of its supply chain to reduce the base subject to new tariffs. For example, Valeo has shifted plastic injection molds for certain parts from China to Mexico or the United States to comply with the USMCA (United States-Mexico-Canada Agreement), thereby avoiding the 25% surtax, Périllat explained during a press teleconference. "Thanks to the measures taken by Valeo, more than 90% of the products manufactured by the group in Mexico and imported into the United States now comply with the USMCA agreement," he added. For the remaining products, Valeo is still targeting 100% compensation from its clients. To date, more than 75% of the amounts concerned are already secured through compensation agreements, and Valeo is continuing discussions to reach the 100% target, Périllat said. (Reporting by Gilles Guillaume, editing by Kate Entringer)