Wagon warns on future orders

Manufacturing News, Source : TheManufacturer.com
Published : 04 Apr 2007 15:14

Wagon plc, Automotive components group Wagon warned today that a tendency among car-makers to manufacturer their own parts may damage its order book two or three years down the track.

However, in the shorter term Wagon was benefiting from the restructuring and redundancy programme it began last November. Despite delays to the start of the programme, staff numbers had fallen by 450, the company said today in an update on trading for its financial year ended 31 March 2007.

Performance in the second half of the year was much better than in the first, both in terms of production volumes and profit, and the year's financials will be in line with its previous expectations.

The company said it remained confident that the scale of the benefits to be derived from the programme will be as originally envisaged, but the delayed start would mean them not being realised until three months later than expected.

Wagon said: "Order intake in the year just ended will be weaker relative to prior years due mainly to increased short-term in-sourcing by some OEMs on specific programmes. This may have an effect on overall volumes in two to three years' time. However, we have increased our market share against other suppliers, particularly with certain important German customers.

"Raw material price pressures continue, but we do not envisage them having a material effect on results to 31 March 2008."

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