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How suppliers can master the auto crisis

2009

Despite signs of mild economic recovery, the global automotive supply industry continues to suffer from the global economic crisis. A study by Roland Berger Strategy Consultants shows that 80% of all suppliers around the world will be in the red in 2009. Approx. 70 German companies are already insolvent, and this number will exceed 100 by year's end. Many car markets have slumped by up to 30% this year. Only massive government support programs have prevented a complete collapse of the industry.

"The average returns of global automotive suppliers will plummet to historic lows in 2009," says Marcus Berret, Partner at Roland Berger Strategy Consultants. "We expect that following growth of 5.4% and 2.1% in 2007 and 2008, respectively, an unprecedented level of minus 2% to 2.5% will drag the industry down". Many German suppliers have reacted quickly and have managed to cut their personnel costs by up to 25%, especially through short-time work. "However, this is by far not enough to offset the huge loss in sales," says Berret.

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