Core Insights - The automotive parts industry is experiencing significant performance differentiation among major players due to the dual pressures of electrification and supply chain restructuring [1][2] - Companies are implementing restructuring, cost control, and efficiency improvement measures to recover profit margins, despite challenges in the electrification business [1][4] - The Chinese market has emerged as a core growth engine for many automotive parts companies [1][7] Financial Performance - Valeo reported a 4.1% year-on-year decline in sales for the first half of 2025, totaling €10.66 billion, but achieved a 0.5 percentage point increase in operating profit margin [2] - ZF Friedrichshafen's adjusted EBIT rose to €874 million in the first half of 2025, with an adjusted EBIT margin of 4.4%, despite a 10.3% decline in sales to €19.7 billion [2] - Continental's second-quarter sales decreased by 4.1% to €9.6 billion, with an adjusted EBIT of €834 million and an EBIT margin of 8.7% [2] Strategic Adjustments - Companies are undergoing significant restructuring efforts, with ZF focusing on enhancing profitability and competitiveness through comprehensive restructuring plans [4] - Valeo is optimizing its R&D efficiency and has adjusted its sales target for 2025 from €21.5-22.5 billion to a minimum of €20.5 billion, primarily due to unfavorable currency exchange impacts [5] - Continental plans to spin off its automotive subgroup as an independent company by September 2025 to enhance operational resilience [4] Market Dynamics - The U.S. tariff policies have significantly impacted the global automotive parts industry, prompting companies to adjust pricing strategies and enhance supply chain resilience [2][3] - The Asia-Pacific market, particularly China, is becoming increasingly vital for automotive parts suppliers, with ZF and Valeo both emphasizing local production and innovation [3][6][7] - Valeo secured €11.8 billion in orders in the first half of 2025, a 30% increase year-on-year, with new orders from Chinese automakers growing at three times the rate of sales [7] Technological Innovations - Companies are focusing on advanced technologies such as electric drive systems and high-level driver assistance systems to capture market opportunities in China [6][8] - Valeo aims to leverage new sensor technologies and centralized electronic architectures to enhance its market position in the growing segment of high-level assisted driving [8]