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Handbrake on – Slow progress over consolidation in the automotive supplier industry

2010

The automotive crisis in 2008/2009 has left behind deep scars on suppliers. In 2009 sales fell globally by an average of around 25%, with average returns (EBIT/sales) down from 5.7% (2007) to approximately -1.5% (2009). As a result, 340 suppliers worldwide filed for insolvency, including 75 companies in Germany.

Despite the greatest crisis in the history of the industry, consolidation remains slow. The number of mergers and acquisitions has been falling since 2007, and even fell in 2009. What are the reasons for this? For strategic investors, the market is not particularly attractive with its low margins and high levels of excess capacity. Suppliers themselves lack the necessary cash and management resources to carry out acquisitions. And in many segments, manufacturers do not wish to see any further consolidation in the global competitive structure.

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