Navigating turbulent waters

2007

• Pressure on suppliers increases around the world: automakers push for higher price reductions
• Suppliers face contradictory situation: downward pressure on costs versus record growth in sales and profits
• Sales and profits of suppliers from growth markets rising sharply
• 13 levers identified for success in the parts supply industry

The pressure on automotive suppliers has increased drastically over the last twelve months. Many car manufacturers have stepped up their demands for significantly higher discounts on purchased parts and systems compared to last year. What is more, as energy and raw material prices rise dramatically around the globe, costs for suppliers are increasing steadily. However, the study unveiled and interesting dichotomy: While many suppliers have recently run into financial difficulties, many others are announcing record growth in sales and profits year on year. For 2007 and 2008, suppliers are working at full capacity and their order books are full. Entitled "Navigating turbulent waters – Levers for success in the global automotive supplier industry," the study by investment bank Rothschild and Roland Berger Strategy Consultants is based on an analysis of financial and performance data from approximately 400 automotive suppliers with global operations. It covers the years 2000 to 2007.