Elevated LeverageLeverage above 1x constrains financial flexibility and raises interest exposure, reducing room to absorb demand shocks. Over the medium term this heightens refinancing and liquidity risk, limiting capacity for capital allocation to growth or shareholder returns until deleveraging progresses.
Thin Operating ProfitabilityModest EBIT/EBITDA and very low net margins leave limited buffer against commodity inflation, warranty or warranty-recall costs, and pricing pressure from OEMs. Persistently thin margins constrain reinvestment and make returns more sensitive to cyclical downturns in vehicle production.
Volatile Free Cash FlowEvidence of volatile FCF driven by fluctuating capex or working capital reduces predictability of deleveraging and investments. Over a multi-quarter horizon, inconsistent cash generation complicates strategic planning and may force trade-offs between maintenance capex, growth projects, and debt reduction.