Client: Automotive supplier
Sector: Automotive supply industry
Project duration: 21 months
Company size: EUR 1.3 billion
Contact: Dr. Arno Haselhorst
The financial and economic crisis of 2008/2009 triggered a worldwide recession, which massively hit the automotive industry. In 2009, the industry had to cope with declines in sales of around 20 percent in Germany. The supply industry lost about a quarter of its sales. However, the automotive industry recovered relatively soon. In particular German brands and products, which are leaders in international competition, were able to re-bounce relatively quickly.
However, the return to the usual growth dynamics should not hide the fact that players in the automotive industry are facing fundamental change over the next few years. Above all, it will cause problems for those supplier companies that have been hit by the crisis.
One of the structural changes is the shift in global demand: while in the triad markets, registrations are increasing only marginally, in the future significant growth will take place in the emerging BRIC countries, especially in Asia. Vehicle production by OEM (Original Equipment Manufacturers) will shift even more strongly into these growth regions, which will inevitably lead to continued relocation of the suppliers' production sites.
On the revenue side, the supply industry is coming under increasing pressure: high manufacturing complexity, ever more stringent environmental regulations and rising raw material prices are driving up costs. Companies need to respond to these developments with significant cost savings and productivity gains; otherwise automotive suppliers will not be able to operate profitably in the future. The OEM market has already been characterized by strong concentration tendencies in recent years. The same will happen in the supply industry.
Over the next few years, suppliers will have to respond to these structural changes and consolidate accordingly. The OEMs demand longer price commitments, pass the financial risk to suppliers and expect comprehensive complete solutions. These demands can only be met by innovative companies with sufficient funding to finance growth and R&D.