Auto parts manufacturer Cayman Engley Industrial Co Ltd (開曼英利) forecast that sales could be flat this quarter compared with a year earlier, as one of its major clients is just about to recover from a slump, while its other clients might not show significant growth until next year.
“The worst has passed and we are entering the high season this quarter, but the car market in China has not fully recovered yet,” an Engley official said by telephone on Tuesday.
The official asked to remain anonymous.
The US-China trade dispute has hurt Engley’s clients in China, affecting their operational expansion plans and vehicle sales, although FAW-Volkswagen Automotive Co Ltd (一汽大眾), its largest client, has gradually increased shipments since August, the official said.
The company also counts Beijing Benz Automotive Co Ltd (北京奔馳) and Volvo Cars Group among its major clients.
Cumulative sales fell 0.69 percent year-on-year to NT$15.83 billion (US$513.1 million) in the first nine months of the year, compared with a 3.82 percent decline in the first eight months, as last month’s sales grew 25.12 percent annually to NT$2.15 billion, Engley said.
The company said it expects orders to increase after clients release new vehicles and the Chinese government launches stimulus packages late this year or next year.
Increased shipments of battery compartment covers for electric vehicles could also help boost sales from this quarter to next year, it said.
As the Chinese vehicle market is expected to gradually recover and shipments of auto parts for electric vehicles should continue to grow, Engley’s sales for next year are predicted to increase 5 to 10 percent compared with this year, analysts have said.
The company last week secured a syndicated loan of US$70 million from 12 banks, which it said it would use to repay bank loans and increase working capital.
Engley shares gained 0.21 percent to close at NT$97.2 on Wednesday ahead of the Double Ten National Day long weekend.
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