FRANKFURT -- German partsmaker Eisenmann, which supplied Tesla in 2015 with a new paint shop at its plant in Freemont, California, filed for insolvency late on Monday. It is the latest sign of the growing economic problems crushing profits in the auto sector.
Eisenmann, which has 3,000 employees and generated annual revenues of 723 million euros ($806 million) in 2017, filed for insolvency at the Stuttgart District Court.
The company, which is based in Boeblingern, Germany, said it was now looking for a strategic partner for its paint and assembly unit, as well as its application technology business. Potential buyers have already expressed interest, Eisenmann said.
The insolvency comes as bigger auto suppliers and automakers including Mercedes-Benz parent Daimler and technology and tire specialist Continental have issued profit warnings, triggered by a worse-than-expected downturn in demand for global vehicle production.
Robert Bosch revised its forecast for global automotive production last week. The world's largest auto parts supplier now expects a 5 percent decline in vehicle output this year, bigger than an earlier estimate of a 3 percent decline.
Eisenmann ran into liquidity problems because major projects started in 2018 led to a large year-on-year loss, it said.
A spokeswoman declined to specify which projects had pushed the company into insolvency.
"This is another example of the extreme supplier pressure these days. We do not foresee the environment getting any better soon," Evercore ISI analyst Arndt Ellinghorst said in a note to investors on Tuesday.