Mahle says it is planning to close its air management systems Öhringen plant in Germany employing 240 people, in stages up to the end of 2020.
The German supplier cites a lack of new orders "despite countermeasures" and price pressure for several years.
"Unfortunately, we have now reached a point where the outlook for the plant is not sustainable," said Mahle board member, responsible for Filtration and Engine Peripherals, Wilhelm Emperhoff.
"The location's cost structures do not allow for the acquisition of new projects, and most recently, even follow-up orders for existing products with low investment expenditure could no longer be placed in the market.
"Mahle's efforts to generate a sustainable outlook for the Öhringen location with new products and technologies have also proven unsuccessful. We were unable to win any new projects."
The supplier also says as a result of the high financial cost of transformation in the automotive industry, ongoing economic slowdown and declining demand for diesel vehicles, it is increasingly reliant on profitable and sustainable locations.
"This is a tough decision for us, but it is unavoidable given the prevailing situation and negative prospects for the Öhringen location," added Emperhoff.
In the coming weeks, Mahle will start discussions with employee representatives.
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