The automotive industry is facing significant challenges as it navigates a shifting landscape.
The transition to electric vehicles is progressing slower than expected. Rising living costs have also kept many consumers from purchasing new cars.
These pressures are not only affecting car manufacturers but also the suppliers who depend on their success.
One of those suppliers, the German company Webasto, is now in a serious financial crisis, according to Boosted.
Webasto, a major producer of sunroofs and heating systems, has been hit hard by the downturn in the automotive sector.
The company is struggling with €1 billion (£870 million) in debt, which urgently needs refinancing. The debt, accumulated in part during an ambitious expansion, has now become a heavy burden.
Negotiating New Loans
Webasto has started working with its lenders, including BayernLB and UniCredit SpA, to negotiate new loan terms. A restructuring officer has been brought in to oversee the process.
The company has also hired Rothschild & Co. to provide advice on handling its debt and exploring potential mergers or sales.
Earlier this year, Webasto renegotiated loan terms after failing to meet certain financial conditions. However, weaker-than-expected results have led to fresh talks.
Competition from Chinese suppliers has also made the situation worse. In 2023, Webasto saw sales in China decline significantly.
The company’s struggles reflect the broader challenges in the automotive industry. Consumers, facing rising costs, are holding off on buying new cars.
The shift to electric vehicles has been slower than predicted. Automakers like Ford and Volkswagen have announced major layoffs and are considering plant closures in Europe.
Webasto is taking steps to reduce its financial strain. In February, it sold most of its charging station business. The following month, the company announced that mass layoffs are under review.
At the end of 2023, Webasto had loans totaling over £900 million, including one loan worth £700 million. The company’s ability to restructure its debt will likely determine its future.
Like many others in the industry, Webasto is feeling the effects of a rapidly changing and challenging market.
