Vitesco Technologies, a provider of modern drive technologies and electrification solutions, expects its sales to grow this year in China, said CEO Andreas Wolf on Thursday.

"The Chinese market is going (up) slightly. The growth rate for the next two years are going to be rather positive. This is how they view, especially regarding e-mobility. And for Vitesco Technologies, we also expect to see further growth for 2024," said Wolf at the company's annual press conference.

China has been one of the largest markets for Vitesco. Last year, the German company increased its consolidated sales to 9.23 billion euros ($10.04 billion), with a better-than-expected margin and cash flow, and roughly 30 percent were from China.

Vitesco has a number of manufacturing sites and research and development facilities in China. Wolf said the company's growth momentum will grow further as it will merge with Schaeffler.

"I'm not saying I'm relaxed, that would be the wrong term to use, but I believe we are very well positioned to be able to stand our ground in the Chinese market with our products," he said.

Globally, Vitestco has seen electrification to gain momentum. In 2023, its total order intake came to more than 12 billion euros, of which roughly 8.3 billion euros was attributable to electrification components.

It had a total order backlog of around 58 billion euros by the end of 2023. It marked the first time that more than half of the backlog was related to electrification.

He said the large number of product launches in 2023 and this year confirm the company's electrification portfolio.

"With our strong partnerships, for example in the form of long-term supply contracts for silicon carbide, we consider ourselves well prepared in this regard," said Wolf.

Vitesco is forecasting sales between 8.3 billion euros to 8.8 billion euros this year because of the challenging market environment and the planned significant decline in contract manufacturing activities with Continental.

Due to the increase in profitability anticipated in the electrification business, the company expects to see an adjusted earnings-before-interest-tax margin of between 4.5 percent and 5.0 percent.

It is forecasting a negative free cash flow of around 350 million euros in 2024, owing mainly to negative effects from reduced contract manufacturing activities and the repayment of start-up financing to Continental.

Due to the high number of product launches this year, especially in the second half of 2024, we expect our investment ratio to be around 7 percent of sales for the year as a whole, with a full focus on investments in electrification, said the company.