2022 Global Automotive Supplier Study
Automotive suppliers must continue to prepare for challenging times, while the industry is under enormous pressure to transform – according to findings in the 2022 Global Automotive Supplier Study, prepared by Lazard and Roland Berger.
After analyzing the performance indicators of approximately 600 suppliers, the study found that although the average profit margin in 2021 returned to its pre-pandemic level of 5.3 percent - the war in Ukraine, the shortage of semiconductors and rising material and energy prices brought this recovery to an abrupt halt in 2022.
Adjusted for inflation, global turnover in the supplier industry will again be below the level of 2019 in the next twelve months. The challenging interest rate environment also makes necessary investments in the sector's technological future viability more difficult. The study highlights key challenges ahead of the industry, including:
1. Due to Covid-19, semi-conductor and raw-material shortages, Ukraine war and Covid-19 relapses in China in 2022, global automotive production volumes will reach pre-crisis levels only in the mid-term
2. Although the growth of the global automotive supplier markets has come to a halt, average supplier margins came back to 2019 levels in 2021. However, margin pressure from cost inflation expected to further increase
3. Profits are allocated across the supplier landscape very selectively. While most traditional automotive suppliers have difficulties, many electronics, software and aftermarket players are realizing above average margins
4. Overall, the uncertainty about the development in the near- to mid-term future has never been as high as today – From a global recession or a collapsing of chip supplies with further volume declines to a steady volume recovery everything is possible
5. On the back of substantially rising interest rates, financing will become much more challenging for automotive suppliers
6. The crises in 2020-2022 have pushed general automotive trends into the background. Nevertheless, digitalization, automated driving, powertrain electrification or a changing E/E architecture are the top challenges for automotive suppliers in the mid-term
7. Price inflation, volatile production volumes and unevenly distributed profit levels indicate, that the general market dynamics needs to change. While OEMs are increasingly willing to share profits, suppliers are expected to provide greater transparency
8. Global pandemics and geopolitical conflicts drive the necessity to de-globalize supplier footprints and the interconnected supply chains to increase crisis resilience in the future
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