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Global Automotive Supplier Study: Average industry profit margin drops to just 4.7%

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Chinese suppliers lead with 5.7%, while Europe (3.6%) and South Korea (3.4%) lag behind
Stagnant volumes, delayed EV transition, and geopolitical uncertainty emerge as key challenges
Margins expected to remain under pressure; strategic realignment essential for future success

Detroit, May 9, 2025

The global automotive supplier landscape is under strain, with profit margins falling to a projected industry average of just 4.7% in 2024, according to the newly released Global Automotive Supplier Study 2025 by Roland Berger and Lazard. The report, which analyzed over 600 suppliers worldwide, highlights that North American suppliers are facing a perfect storm—stagnant production volumes, slower-than-expected EV adoption, rising labor costs, and ongoing geopolitical shifts.

While Chinese suppliers lead with EBIT margins of 5.7%, suppliers in Europe (3.6%) and South Korea (3.4%) are falling behind. North American players, while performing better than their European counterparts, are not immune to the same systemic pressures.

“We’re entering a pivotal moment for the North American automotive supplier industry,” said Isaac Chan , Partner at Roland Berger. “With inflationary cost pressures and stalled EV adoption in the U.S., suppliers must act decisively. Portfolio optimization, regional strategy refinement, and operational efficiency are no longer optional—they are survival strategies.”

The study identifies five major trends reshaping the global supplier industry:

Stagnant global production volumes and regional overcapacity, especially in Europe and North America.
BEV adoption lagging expectations in North America, fueled by subsidy rollbacks and infrastructure gaps.
The rise of software-defined vehicles, demanding rapid technological adaptation.
Intensifying global competition, including aggressive growth from Chinese OEMs.
Geopolitical uncertainty, trade reconfigurations, and policy changes in the wake of the U.S. elections.

Despite these headwinds, the study offers a roadmap forward. Suppliers that embrace strategic partnerships, focus on competitive technologies, and localize operations will be best positioned to emerge stronger.

🔗 Download the full study here .