VIENNA (Reuters) - After three boom years, the auto industry must adjust to the fact that demand will no longer grow quite as strongly, Voestalpine (VOES.VI) CEO Wolfgang Eder said on Friday.
The Austrian speciality steelmaker’s focus on finished parts for cars has made the automobile industry a major customer that contributes one third of its group revenue.
Eder said he sees demand softening over the next six to eight months.
“We assume that there will be a kind of ‘soft landing’, meaning this overheated economic cycle will cool down and turn into a normal economy.” the CEO, who will step down next year, said.
Voestalpine’s ties with German carmakers are particularly close. It followed them in expanding production overseas years ago when U.S. drivers’ appetite for cars from BMW (BMWG.DE), Daimler (DAIGn.DE) and Porsche (VOWG_p.DE) became a reliable revenue source.
“The last few months have been rather arduous,” Eder told shareholders at an investor conference in Vienna, when asked about the auto business.
Trade tensions with the United States, including a dispute with China, as well as the European Union’s own issues have made consumers more cautious, he said.
However, global economies remained robust enough to ensure a continued solid demand for cars, he said. “I do not expect a dramatic slump.”
Voestalpine, which posted revenue of 12.9 billion euros last year, expects to top 13 billion euros in 2018/19 and reach 15 billion in 2020/21.
Reporting by Kirsti Knolle; editing by Jason Neely