(Reuters) – Aptiv PLC does not expect semiconductor prices to cool off in the near future, the auto parts supplier said on Wednesday.
Even though supply-chain challenges are easing, prices of certain parts remain high, denting profits.
The company said the “real challenge” is in obtaining chips, whose prices have risen 25% to 30%, while supply chains remain tight.
The Dublin-based company said demand for new vehicles remains strong in North America and Europe, but flagged concerns around underlying GDP growth in China.
Aptiv, which counts General Motors and Ford among its customers, also said it is positioned to have “enough” inventory to combat possible disruptions in case of a strike at the two Detroit carmakers by the autoworkers’ union.
“We have the flexibility to adjust down and then back up if there is a labor disruption,” Aptiv’s chief executive Kevin Clark said at the JPMorgan auto conference.
United Auto Workers (UAW) is seeking improved benefits, including double-digit pay rises and defined-benefit pensions, for all workers in its talks with automakers Ford Motor, General Motors and Stellantis , also known as the Detroit Three.
(Reporting by Pratyush Thakur in Bengaluru; Editing by Shailesh Kuber and Pooja Desai)