Car parts manufacturer Nifco has recorded a fall in sales - and predicted another one to come - as turmoil in the automotive industry led to a “challenging year”.
The Stockton firm saw turnover fall from £76.0m a year earlier to £71.1m in 2018, with operating profit more than halving to £4.6m.
Managing director Jim Casey - who took over from long-time boss Mike Matthews in June - said the company was expecting another fall in sales in 2019 as Brexit-related uncertainty and other issues caused huge issues in the automotive industry.
But he also sounded a note of positivity, saying that Nifco had made improvements to its internal operations to improve efficiency, and that the company was still seeing demand for new business.
In the accounts, Mr Casey said: “2018 has been a challenging year for Nifco UK, and the autmotive sector in general.
“Uncertainty generated by delays in the Brexit process and the introduction of the new WLTP emissions regulations have had a significant effect on the majority of automotive manufacturers, both through lower car sales and delays in new model introductions.
“In addition, slowdown in Asian economic and the ongoing trade issues between China and America have had an impact on the demand for premium vehicle brands. Whilst the transfer of Jaguar Land Rover production of the Discovery model to their plant in Slovakia has had an additional effect on Nifco UK.
“2018 saw a reduction in reported operating profit margin compared to 2017 (6.4%, down from 12.8%). This included restructuring costs of £553,000. 2017 included an exceptional item of £4.8m, therefore underlying OP margin is comparable with the prior year.”
Nifco - which manufactures plastic parts used in the engines, interiors and exteriors of cars produced by BMW Mini, Ford, General Motors, Honda, Jaguar Land Rover, Nissan, Renault, Toyota and Vauxhall Opel - had previously reported 15 consecutive years of growth.
But many of the company’s main customers have moved or cut back production over the last 18 months as the automotive industry has suffered from a slump in demand and other factors, including Brexit.
Despite the challenges it faced, Nifco added to its staffing, which increased from 618 to 643 during the year.
