Lower production volumes in France have sliced £10 million off profit forecasts at automotive supplier Wagon.

Wagon, which has its head office at Birmingham Business Park in Solihull, has warned its full year performance will be "materially impacted" after a difficult first half.

Profit forecasts for the company, which makes car windows, doors and impact protection systems, were dramatically downgraded in the wake of the warning yesterday.

Pretax profits are now estimated to be around £4 million, compared with previously expected £14 million, according to Phil Oakley, an analyst at stockbrokers Hoare Govett.

Wagon said that management initiatives will result in improved performance in the second half of this year.

"The main weakness arises from lower-than-expected recent trading with French customers, which is expected to continue into the next financial year," the company said in a statement.

Contracts with Renault and Peugeot account for around half of Wagon's revenues, and have been hit by reduced production at the two French carmakers.

But Wagon said the impending closure of Peugeot's UK manufacturing facility at Ryton, in Coventry, would not have any major impact on future revenues, while contracts with Audi, Ford and General Motors were holding up.

In the Midlands, Wagon also has a door manufacturing operation in Brownhills and body structures site in Tyseley Birmingham.

There are no plants to close any plants as part of the management initiatives to improve efficiency, the company said.

Wagon also said it was confident that the integration of French car body-parts manufacturer Oxford Automotive, acquired via a reverse takeover earlier this year in a deal worth £128 million pounds, would meet expectations.

Shares closed down 37p at 166.75.