Let me now turn the floor over to your host, Dr. Michael Büchsner. Please go ahead.
Thank you very much. Yeah, hello and welcome also from our side to our quarter one earnings call today. You have, as always, Stefan Bauerreis, our CFO, and myself, Michael Büchsner, being the CEO of the Stabilus Group in the call. Yeah, a stable performance in rough economic environments, that's how I would summarize this quarter for us. Overall, it was a good outcome. So our revenue did increase in 6.7% year-over-year, for sure mainly driven by the DESTACO acquisition and about the other impacting factors, which basically led to a decline on the revenues without consolidation of DESTACO . That's what we'll talk about throughout the presentation. The EBIT adjusted was at 11.6% and thereby year-over-year increased significantly by 70 basis points. And for sure, with our long-term strategy and with the acquisition of DESTACO , we further improve our portfolio.
And this improvement on the portfolio, predominantly in the area of automation technologies, leads to a further stabilization of our business. And this is what we see now in the numbers. It was absolutely the right strategic approach along the line to stabilize our business further, to further improve it, and to make it sustainable even in such rough economic environments like we see them today. Our net leverage ratio, and we'll see that throughout the presentation, is kind of stable at 2.8. The market environment will continue to be challenging. That means we expect our numbers to be somewhat loaded towards the end of the financial year for us again, because, and we'll see that in the presentation, we're working on a lot of measures to continuously improve the position of our company. Having said that, with the current guidance, we are very comfortable.
Our guidance is, and we published it on the 9th of December past year, at EUR 1.3 billion-EUR 1.45 billion sales with an EBIT margin of 11%-13%, including a free cash flow of EUR 90 million-EUR 140 million. Our quarter one result, stable, underlines this performance, and it underlines the path to this performance to reach our guidance. On the next page, we'll have a review on DESTACO. DESTACO has solid revenues, EUR 45 million past a quarter. EBIT margin is at 18.9%, which is extremely good, I'd say, comparing it to the past quarter one last year. You know, we did not publish these numbers for sure because they were part of our due diligence. However, I can tell you this performance is even better than first quarter in the past business year for them.
It also has a very good cash flow generation along the line, considering along with the revenue that basically the first quarter for sure also in the industrial automation sector is impacted by a December, which only is two weeks long because of the holiday shutdowns in all kinds of industrial areas. So very good performance with close to 19%. We are absolutely on track with our yearly performance expectation with DESTACO. And also the integration is well on track. We could close all the work streams on the integration side. Going forward, there will be the one or other integration cost, but there will only be internal costs. And this is why we'll not see a big impact on our numbers in the quarters to come. So very solid performance, good integration, very nice progression in terms of sales. Cross-selling activities are running well.
You know, for the year, we've been planning that our cross-selling activities would reach EUR 10 million annual sales end of this year, annualized sales. We're currently in the range of EUR 2 million, and this basically puts us right on top and on the spot in terms of our sales synergies we've been planning for. And also in terms of cost synergies, we are doing well. Our overall yearly cost benefits for the year in DESTACO should be in the range of EUR 1 million, and we are currently beyond EUR 0.5 million already. So that means we are well on track to reach also our cost position and cost synergies with the DESTACO business in hand.
With that, we switch to the general overview in terms of revenue, profits, and margins, and I would hand over to Stefan to give you an overview on the focus of the regions as well.
[audio distortion] Once again, here also impacted by the first consolidation of [audio distortion]. On the one side, due to the increase in the operating activities, which is on the EBIT side already explained, which are offset by obviously higher finance costs and higher income tax rate. But also here, some smaller valuation impacts are included here when we're talking about cash conversion here on that perspective. So overall, I think a good development on the total development of our profits. Coming now in the last key performance indicator to our adjusted free cash flow.
And here we have to see that our free cash flow, our adjusted operating free cash flow is declining from the first quarter last year to the first quarter this year. Where does that come from? On the one side, it is positively impacted by DESTACO group for sure. That is clear. But as you know, we already also said that some of our, let's say, liquidity aspects, which were included in the fourth quarter of fiscal year 2024, also now are coming back and will find a certain reversal. So we have a big portion of that also now here in the first quarter here in there. So that is nothing from an operational perspective that we have to be careful on that. It's really much focusing on this quarter-by-quarter reversal that we have on that. Also, we have a temporary high of net working capital.
Also, that was due because, as you know, there have been also some strikes expected in the U.S. harbors, and we wanted to be sure to have a very comfortable supply chain, which now in the second quarter directly will reverse, and therefore we will see a significant improvement in the months to come. When we now go in the next slide, going to the different region, and I will first start with an overview of the different region, our segments, as you know, with Americas, EMEA, and Asia Pacific. So all overall, revenue development, which is very positive in Americas and EMEA, but here we have to clearly say that this is almost impacted by the very strong footprint of the DESTACO.
On the Asia Pacific side, we are lower also due to the fact that the major impact of DESTACO also is referring to the regions, Americas and EMEA, not so much on Asia side. In terms of the adjusted EBIT margin, also here we can say an increase up to 8.5% in Americas, 8.9% in EMEA, and downtrend, but still with a very comfortable margin of 19.4% in the region, Asia Pacific, which is from my perspective really much outstanding what we have. Finally, the revenue increase in the regions, Americas and EMEA, is for sure driven also by the first consolidation of DESTACO . Nevertheless, I think, as I already mentioned, our operational activities in terms of cost flexing and improving our structures are harvesting the first fruits. Now going in the next slide directly into the different details, and I will start with the region, Americas.
Sales revenues increased, as already said, by 14.7% with an organic growth of - 4.7%. This is mainly due to a reduction in revenues on the automotive side and also on some commercial vehicles. So these are the two major areas where we have from an organic perspective downturns, obviously then compensated by DESTACO and the good performance in industrial automation, but also in the independent aftermarket where we are very successful in Americas. That leads us at the end to a very much improved adjusted EBIT number, which is now at 8.5% coming from the 5.3% in the first quarter of last year. And also here, we have to say it is on the one side DESTACO, but also we are now doing our homework and now improving operational perspective. As you know, Americas always was significantly impacted by high fluctuation in Mexico.
And also here we see step by step more improvements and a stabilization of our business based on the initiatives that we took. Going then to the next region, and we will have an overview on EMEA. Also here with an increase in sales of 6.1%, but also here the same is true when we're talking about our organic growth, which is negative here and which is also mainly due to the fact that it is an automotive side, but also some other areas like aerospace, which is obviously a small area, but here also some deliveries are postponed a little bit of orders. So these are negative impacts. Positively also here, our, let's say, star market segment with independent aftermarket distribution and industrial automation. In terms of the adjusted EBIT, also here a very good increase from 8.4% to 8.9% and in total numbers from EUR 9.9 million to EUR 11.2 million.
So also here a good performance and also once again, our operational activities takes the first. Last but not least, Asia Pacific. And here, unfortunately, we were not able to maintain the good development of the revenue of the first quarter of last year. So all overall, we saw there a quite significant organic decline, which also here is mainly due to the automotive area, which is only partially then offset by the good development in industrial automation with the business of DESTACO now on hand. And the same, a slight decrease in the EBIT margin from 20.4% down to 19.4%. Also here, having in mind that obviously 20.4% in the first quarter of last year was a very much outstanding and extraordinary margin. And still the 19.4 % from our perspective is a really great achievement that we can be very proud about that.
That having said, we now come back to the market segments and I hand over back to Michael.
Thank you, Stefan, for this overview about the regions, and I'd like to talk a bit about the market segments for the past quarter. For sure, the number which sticks out here is also the sales of gas springs and the POWERISE. And this is basically driven by the POWERISE where we see lower sales than in the past year, quarter one. Why is that? There's a few impacting factors here. First of all, the quarter one in the past year for sure was a very strong automotive sales picture still. So let's say that compared to this year, first quarter, the vehicle build was better in the range depending on the segment 5%-10%. So that's one aspect to this whole equation.
The other aspect is that particularly on the top segments, we see some weakness in October, November, December last year. So our customers decided to predominantly produce the lower segment cars. And that's why you also see that the gas springs are better performing than the POWERISE systems because the lower segment cars have been preferred in terms of production rather than producing the cars with POWERISE systems. Then there is another impacting factor for the last quarter. You all know the unrest about the next steps in terms of electromobility. And this uncertainty out there for the consumers basically drives that the electromobility sector was hit by a minus of around about 10% across the regions. Right? In Europe and North America, that is basically clear because it's basically driven by our biggest customers, as you know, on the electric fleet side, including Tesla, for example.
But on the other hand side, you see this also in the Asia Pacific region. And why is that? There is BYD on the one hand. BYD for sure grows faster than the market. However, BYD decided to produce their POWERISE systems internally. So the external sales to that is basically not possible. And this is basically the reason why also, despite electromobility being for sure a favorite in China, still the sales are basically flat. And yeah, to a vast majority on the electromobility, even seeing a downward trend. So that means bottom line is for Stabilus, there is not a single loss in terms of contract. Contracts are all in place. It's just instead of 10, there are currently purchased nine elements. So we see a 10%, 11% reduction versus the past quarter.
This has to do, in a nutshell, as I said, predominantly with the point that in the past year, first quarter, still higher base level of cars sold, and then this concentration of car production on lower segment cars, a little shift away from electromobility. What does this mean for the next quarters? Yeah, for our customer base, we got, at the end of the day, the feedback that at least in the second half, we should be seeing better numbers because as there is some clarity around the world in terms of electromobility and some improvements on the car sales sector, there should be a relief. However, this will be in the second half of our business year. That's about the automotive side. In terms of industrial, machine, and automation, for sure, overarching was the integration for us still of DESTACO.
And one thing is for sure that the DESTACO integration, which is nice sales on the automation side, helps a lot in these turbulent times because you see there's also on the pie chart, our sales in terms of industrial business is increasing and the sales in percent on the automotive side slightly decreasing. And this has the nice effect that we see nevertheless stable margins even improved versus the first quarter or the first quarter last year driven by more industrial sales and also the effect of the DESTACO. So that means in terms of our strategy, we are spot on because we said we want to shift away a bit from the automotive side in terms of percentage on this pie chart towards the areas of industrial business. And this is what you see now.
So this kind of shift, which we on purpose at Stabilus with our strategy are pushing, leads to success because our margins are stable in rough waters and our industrial share increases. Also very positive is our distribution independent aftermarket. No wonder independent aftermarket in inflationary times like we've been seeing them over the course of the past two years, people basically stretch out a bit their investment in a new vehicle. This also leads to the point that independent aftermarket increases its sales. We brought good products to the market. We are now also fully entering the POWERISE segments for the aftermarket segment. This means higher content per vehicle on the aftermarket side where we sold a gas spring before. We are now also selling not only the gas spring, but also the POWERISE systems to the market.
This is something which carries fruit in terms of independent aftermarket. I can tell you that the margins in that area are also pretty nice. For sure, in terms of commercial vehicles, we still see the softness of the market. We took also a conscious decision about where to invest in terms of furniture. Furniture, and this is why this market segment is down 13%. We have been laying that out and displaying that over the course of the past year several times. We want to put our efforts and dollars where it really matters. This is not necessarily the furniture market because it is dominated by Chinese suppliers who are basically, yep, in terms of cost performance, top notch. However, quality is still a point where many of our customers decide to go with Stabilus.
This leads to the point that we are, at the end of the day, very selectively kind of taking our efforts in terms of where we put our money in capacities on the furniture side, and this leads to the point that, yes, margin quality, margin quality increases. However, sales at the end of the day are softer. Energy and construction is basically flat. A lot in terms of energy depends now on the new government in the U.S. and how things will be rolled out in the future, and this is why people are, at the end of the day, cautious and, at the end of the day, are just waiting what's to come in the next months in terms of decision taking. Aerospace, marine, and rail. This is basically impacted by Boeing. We will, throughout the year, make up for that.
However, as you all know and have heard in the media, Boeing had its challenges over the course of the past six months, and certainly we see that in our numbers. It's only down 6%. Purely Boeing would be even more a challenge. However, as we've been balancing nicely our portfolio between Boeing and also Airbus, we're now harvesting the fruits of better days for Airbus, and also in these segments, we are balancing our business portfolio, so bottom line is, yes, on the automotive side, there is an impact on the electromobility. However, with our nice sales on the industrial side, we make up for it and we increase the margin quality, which leads to a sustainable margin in the first quarter on all the segments, mainly driven by, for sure, industrial machinery and automation.
On the next slide, you see then the area of net debt ratio, 2.8, as I said in my introduction, very stable number for the time being. Currently, we have net debt or debt of EUR 663 million, which leads to this 2.8 net leverage ratio. And our plan is to reduce that well below two within the next two, three years. And for sure, midterm target remains 1.0. And this is something which we constantly work on. Yeah, talking about these efforts, I would like to jump to the next page here because these efforts we are currently doing in terms of net working capital as being one of the main drivers to basically stabilize our position in net leverage ratio was impacted in December. And Stefan mentioned that by an extraordinary high inventory in the North American region. There were some strikes coming up.
We took the decision to invest here some money to ensure that we start the new year without any impact on the operation side and maintain our very efficient measures on the operation side. However, this did lead to an increase of inventories about EUR 15 million. So the impact of increased inventories was basically EUR 15 million. And this is, at the end of the day, at the end of the day, something which we continue to work on. We were at 20.4. Our target is for sure well below 20. And throughout the rest of the year, we started the inventory reduction program along the line because now, as sales levels are flattening out and reaching its bottom, which we clearly see, we want to optimize and, at the end of the day, adjust our complete business model to that.
And as I said, overarching is that's a very good development in terms of industrial business. We are well on track in terms of stabilizing and continue to foster our strategies in terms of split between automotive and industry, which shows a lot of fruits. Currently, on the inventory side, we want to reduce over the course of the next weeks and months EUR 15 million so that we should be well below the EUR 20 million in the quarters to come. As we know, that's a main driver for deleveraging our company and paying back debts. On the next page, you see at the end of the day, our investments in new technologies. It's a little misleading here on this chart because a lot of these activities have been started last year. And you see here the number going up.
You for sure immediately come up with the question, how comes that in such times the investment focus on CapEx is still high, above 6%? This number will change as well due to the fact that over the course of the past quarter, we invested in technology and predominantly in automation in our company. This basically eases out. So the tooling is fully developed. The investments in the new technology roadmaps of DESTACO are coming to an end. Also, the investments we did on the automation side are basically easing and giving some relief here. So you will see in the next quarters that this number also comes down significantly due to the fact that many of these investments were done in the fourth quarter last year and they're just reaching out into our first quarter.
I can tell you for sure that with the innovations we did, we already invested this money in the past year. So we'll see that coming down as promised for sure. So this leads me to the next page, which is for sure talking a bit about the forecast or guidance for the complete year. And as I said, again, we are well on track in terms of reaching these numbers. So yeah, our revenue is EUR 1.3 billion-EUR 1.45 billion in terms of the forecast or guidance for this year. Margin in terms of EBIT margin, 11%-13%. Last quarter was 11.6%. It was better than the quarter before the first quarter in 2024 for us by a couple of points. And this basically leads to the assumption that we are well on track in terms of our forecast because we are improving year-over-year.
At the end of the day, right in our guidance as we start in the new year. We all know that the first quarter typically is the one which is impacted by lower sales driven by the winter shutdowns. We adjusted our capacities well in terms of our efficiencies in the plants. This helps us a lot also to reach our adjusted free cash flow of EUR 90 million-EUR 140 million. Please also remember that we kind of back-loaded. Some of these aspects, and I'm pretty sure we talk about that also in the Q&A session, will be for sure that we are increasing our efficiency in the plants. There's a stringent plan.
We recently had a supplier convention where we did roll out with all the suppliers a cost-cutting program, improvement plan in terms of component pricing and also engineering-related changes to cut down on the sales side or on the purchase side of components. And these are actually fruits which we harvest throughout the year. So that's why throughout the year, there will be also some positive benefits on our P&L driven by that initiatives. So last but not least, let's jump onto the page with the outlook here and the summary. Yeah, despite a challenging market environment, we are doing stable. We are executing our business plans. We are executing on our strategy to put a focus and shift on the industrial side. And this carries first fruits. Margin was better than in the first quarter last year.
We are stabilizing our business further, even with these lower sales on the automotive side because of this shift towards the industrial area, so this is spot on. The diversification is thereby spot on. We started our net working capital projects to reduce CapEx, where that we've been investing a lot in terms of automation technology in the past year, and this is coming to an end for the coming quarters, and then for sure, DESTACO integration is well on track, so just a couple of data points. Our production operations are stable. Cost situation in terms of cost synergies are well on track. Sales synergies are well on track. All the sales forces are trained and are selling the components of DESTACO and Stabilus in the same pocket.
This is basically helping us in the past quarter, and it will help us in the quarters to come. All the integration at the end of the day with external costs is done to a vast majority. For sure, we confirmed our guidance 2025. With that, I would turn it over to the auditorium for questions.
Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you will wish to cancel your question, press nine and the star key again. Please press nine and the star key now to state your question. The first question goes to Marc-René Tonn of Warburg Research. Please go ahead.
Yes, good morning. Thank you for taking my questions, basically two or three of them. First one would probably be on POWERISE. Thank you for elaborating on some of the reasons behind, let's say, software development in the first quarter. Basically, you can give us some indication on whether you already see, let's say, the mix improving again with, let's say, higher demand from the customers. There's also some inventory effects which may have played a role at your customers. I think most importantly, when we should expect the business with the door actuation systems to increase and to finally bring POWERISE back on the growth path, that would probably be my first question. Second question would be, you mentioned Chinese competition in gas springs for furniture.
Do you also see any kind of competition from that side, from China coming into the automotive gas spring business or any part of your industry business where this may be an issue in the future and how you might have to react on that? Or the quality requirements are still such high that you are very well protected still in these areas. And perhaps just generally coming back to POWERISE, I think in the past you mentioned that your order intake is ahead of your current market share. Whether this is something you could still confirm for now and going also into the future? Thank you.
Thank you very much, Marc-René, for your questions. In terms of POWERISE and the POWERISE mix, we saw this effect of electromobility and higher segment cars in the past quarter. And at the end of the day, it impacted our sales.
Part of this is for sure cautiousness of the customers out there. In rough times and inflationary times, they rather concentrate on maintaining their cars. This for sure has an impact as well as sales for lower segment cars, which not necessarily help us, but support us only in the gas spring side. This is why I've been seeing good sales in gas springs, but not on the POWERISE side for the past quarter. This is something which, at the end of the day, basically kicks in for the here and now. I would like to combine it with your question three. How are we doing in terms of market shares? Currently, the Stabilus market share is still 33%.
Over the course of the last year, and in the same way the year before, we won business to the magnitude of 35%, even 36% out there. This is driving our position in a positive way. Why is that? First of all, we are very competitive in the different regions. And this is why we continue to win business out there. By the way, in all regions, you know that there are the traditional basically competitors we have. However, in China, there is Engine. And even against Engine, we are winning business out there, which makes us confident that we continue to have our shares in China. We don't see any point here. And our current market share, as I said, is 33%. We did not lose a single business. We were winning the business along the line. And this is something which we see.
So however, for the here and now, our forecast, which we get from the customers, is in a fine-tuned way for the next four weeks and in a rough number for the next three months. And that's why I've been saying over the course of the second half of the year, we should see some relief as the customers are telling us that things are creeping up in the second half of the year. In the next quarter, we see basically a sideways movement in terms of the customer demands here. Some might be an exhaustion of excess inventories, but for sure, the impacting factors of this uncertainty of electromobility out there in the market, in conjunction with a reduced demand on upper segment cars to the favor of low segment cars, will for sure lead us over the course of the next one, two, three months.
That's what the current numbers suggest. It is bottoming out. It might get slightly improved. So we don't see further deterioration. But at the end of the day, we see the typical winter softness in the quarter to come. So that's one point. You also did combine it with door actuation . We sold in the range of EUR 20 million in terms of door actuation past quarter. And past year, sorry for that. Past year, we sold 250,000 systems. So the bottom line is EUR 20 million sales in that term. And this is gradually going up. Our assumption for this year is EUR 30+ million, even despite of these headwinds. So the acceptance of this technology in the market increases. We know that all the German OEMs are actually sourcing along the line these products now.
They're introducing that, and we will introduce that as a first big volume OEM with the southern German OEM end of the year starting next year. And thereby, the sales will go further up. The fitment rates are, from today's perspective, creeping up. And we see this positive trend going forward also because the biggest U.S.-based Detroit Three producer for SUVs also is up for sourcing of these actuation systems in the coming weeks. You also said and talked about furniture gas spring business. And here, it's very clear to us the local competition in China is not up for getting any market share on the automotive side. Why is that? You also mentioned that our quality is superior, which is for sure the essential point. However, there is also another point in this equation. This is the global reach.
We are the only one aside from SUSPA, who is our main competitor, as you know, paving the road of success with gas springs along the line. Our market share is overall 75% globally, and it's on a stable level currently for the last two years in Asia on all kinds of OEMs, including the local ones. We see 5%, and this is something which also here with the latest business wins, we underline.
The latest business wins help us a lot in terms of strengthening this position and even enforcing it because whereas we had 65% market share in China with our gas springs for a number of years, now we are even winning business up to 67%-70%, which along the line with all the other products for sure gives a good visibility of our market share over the course of the last five, six, seven years because typically development time is about two years for a car. And then you have the car model in your pocket for five years. So it means we have a good visibility that our market shares are even slightly increasing over the course of the coming years because we are winning more than our current market share is with these products. So I hope that answers your question, Marc-René.
Very clear. Thank you very much.
Thank you. And we will hand over to our facilitator for the next question.
And the next question comes from Akshat Kacker of JP Morgan. Please go ahead.
Thank you. Good morning, Michael. Good morning, Stefan. Three questions from my side, please. I'm sorry to come back to the underperformance in POWERISE as the first question. If I think about the business development in North America and APAC, it's clearly down double digit in organic terms. And I've completely heard you on all the comments that you've made. But when I think about how the market did in Q4 last year, or basically your quarter one, production in China, even excluding BYD, was up 5%. The market was up 12%. So that's a stark contrast to your own business development and POWERISE in that business.
And even in North America, I'm just cognizant of the fact that POWERISE in North America was down high single digit already in FY 2024. And when I think about overall electric mobility trends, your product is powertrain agnostic. Tesla volumes were not down meaningfully in Q4. In fact, they were up. So I'm just trying to understand why are you seeing that disproportionate impact from e-mobility trends? So just if you could clarify POWERISE a little bit more for me, that would be super helpful. And if you could just help us understand your overall full year expectations on automotive POWERISE sales this year, do you think overall global sales could be down with single digit? So that's the POWERISE question, please. The second question on APAC margins and the pricing pressure in the region that you mentioned in your December call.
So basically, you've guided for 100- 200 basis points of margin contraction at both ends of your range. I'm just interested in understanding how has that situation evolved in the last couple of months? We've seen that in Q1, margins are down 100 basis points. Should we expect more pressure in the coming quarters, or should we expect more improvement from this 100 basis point level as you focus on cost actions? And the last question is on industrial POWERISE. I think you mentioned you started to sell POWERISE into e-commerce and independent aftermarket. Could you just give us more examples of end market segments or applications that these products are going into, please? Thank you.
Thank you very much, Akshat, for your questions. Starting with POWERISE. You're absolutely right. And you see that on the pure numbers, also on the pie chart, POWERISE is lagging behind.
And quarter over quarter, it was basically quarter one 2024 to quarter one 2025, 11% as we did display. In this number, for sure, you see a decent good performance in the first quarter last year. I agree with you for sure in terms of that the number of vehicles produced comparing these two quarters, quarter one 20 24 to quarter one 2025, that there was not such a big deviation to these quarters. However, if you mirror back in the kind of at the end of the day, October to December in 2023 versus October to December in 2024, there was a significant impact by still good numbers on the electromobility side. There was a significant impact by the numbers because still SUVs and the upper segment cars were running better. So this is basically a shift within the portfolio of the customers. Why is that?
And we saw that actually on the gas spring side because if you look onto our gas spring side, the gas springs is pretty fairly stable compared to POWERISE. That means overall, the indication is the same with us, right? Because we are in a situation where the cars get sold. However, it's rather the lower segment cars and the cars without a POWERISE who get sold. And actually talking a bit about China in terms of China, yep, the market was up at the end of the day. One, as I said, big driver is there that at the end of the day, others are lagging behind in terms of OEMs, lagging behind BYD. BYD is taking market share from the knowns like Geely, Great Wall, FAW, and whatnot. And this basically has an impact onto our number.
In terms of the visibility we get from the customer, they're rather focusing on the second half of the year being kind of flat in terms of the second quarter when it comes to their prognosis. If you think about a bit on the APAC margin pressure, the margin pressure in general terms on the automotive industry goes back to the old normal, I would say, which we saw before the year of inflation, which was started at the end of the day with Corona. The inflation basically led to the point that many suppliers also could gain back some pricing here. Before this crisis at the end of the day of Corona, the typical price erosion you would see in the market was on the global scale 2%-3%, 2.5%. Gas spring less, right? Because it's a mature product out there.
However, on the POWERISE side, all other components in the car, you see a deterioration of 2.5% roundabout in average. So this time around, 2.5%, 2%-2.5% is a good number for North America and Europe, and this is what we deal with currently, and the number in China is a little higher. It's in the range of rather 5% price deterioration because now it's an uncomfortable situation in China that volume is shrinking in general terms, and thereby also the prices are going down in terms of margin. However, we expect that to further stabilize. Why is that? Because the automotive industry, and so are we, is used to 2%, 3% price deterioration, and we make up for it with our technical changes to reduce the prices. The technical changes is in the same way than the demand for price reduction in China on the focus.
That's why also technical changes kick in there faster. That means from today's perspective, yes, the price pressure will be happening mainly in our quarter two, three, and four. But we are well off in terms of offsetting this price pressure. And why will it start throughout the year? Yeah, typically, we do the same than many others try in the industry. We're pushing out negotiations as far as we can. Many of these price reductions on the customer side as well as on the purchasing side kick in starting 1st of January because typically they start with a new calendar year. Prices are going down on a new calendar year. Also our activities with our suppliers. And I've been talking about our suppliers that they've been also in a meeting with us to reduce their prices on the supplier side. So we saw very good benefit here.
We had a supply convention in October, and the new prices kick in as we speak in the first calendar quarter now. And this offsets this price deterioration we see in the margin in the POWERISE side. And therefore, we are confident that we can maintain the margin position. However, as I said throughout the presentation, it'll be probably loaded towards the end of the year as all these improvements are kicking in now. You negotiate early in the year with your customer base about prices, but also you negotiate about technical changes you can do in agreement with the customers. And this leads to the point that many of our technical changes kick in throughout the year. Some of them are long lead time items which need to be changed over the course of the next months.
So this is why I'm saying it's pretty much loaded towards the end of the year. Talking a bit about the industrial POWERISE, we started selling it predominantly in the area of automation technology. So you find it, for example, in sectors of automation where we open and close doors automatically of machining centers, of safety doors. You'll also find them down the road in the area of the kind of construction because we have customers who bring it into door actuation for some fire doors now. You find them also in the sector of health because adjustments of hospital beds is one area where we put them into. And then in the area of commercial vehicles and agricultural development because this where POWERISE systems are used to adjust all kinds of technologies, wind spoilers on the truck business for energy efficiency of trucks.
Then there is kind of all kinds of agricultural equipment which needs to be lifted from tractors and trailers. This is where you find them typically. So it's predominantly in the area of automation technology and industrial components. It's also in the area of health and recreation, in the area of furniture thereby. It's in the area of commercial vehicles and construction. Stefan, from your side, anything to add?
That was almost very good explained from my perspective. So as we said, the APAC margin, we are in that range where what we announced. So I think we understand the market and what is happening there very good. And therefore, whatever now comes in addition with the customer, the key message is to offset that also with good activities on the PPV side as Michael explained. So would I see now significant improvements? I would be careful.
But would I see significant downturns? I also would not see that too much. So we are in the range where we are, and I think that is a quite stable level.
Yeah, it will continue to stabilize further due to the fact that we are selling now. And I mentioned that in the presentation more on the industrial side, right? We really invest our money where it matters. We have automation technology in there. We have the area of industrial POWERISE, as you mentioned, Akshat. We have also the area of door actuation. And this is all market entrance into new fields along with service parts on the POWERISE side. And this guarantees good and stable margin positions also in the future. So thank you very much for your questions, Akshat. And I would hand over back to our moderator for today.
Thank you so much.
Thank you, Akshat.
Okay, so at the moment, there seem to be no further questions. If you would like to state another question, please press nine and the star key now. We will leave the lines open for a couple more moments.
Good. Maybe before we eventually get another question, just to summarize from our side, yes, we know along with other players in the industry very well, there is headwind out there, and these days are kind of rough days, but we've been preparing for it, and we did prepare for it for a number of years now with a strong focus on the industrial side, so we always mentioned it as Tech acquisition, so the industrial POWERISE systems, but also if we look at the acquisition of this takeover from Cultraro a couple of years ago, very solid performance out there, very nice margin development.
And this is exactly the nice strategy which helps us now to stabilize our business and also to have the right levers in our hands to shape our future. And there are, so to speak, a lot of different opportunities out there to continue to improve our business. So I asked last time, are there further questions?
We didn't receive any further questions.
Very good. So then I would like to use the opportunity also to wish you a nice week, a successful week, and all the best for the rest of this week. Thank you very much and have a good day. Thank you. Bye, everybody. Bye.