Global Automotive Supplier Study 2020

Reports and studies — New York, Financial Advisory, Industrials

November 25, 2020

This year’s Global Automotive Supplier Study, from Lazard and Roland Berger, analyzed performance indicators of approximately 600 suppliers around the globe to assess the current state of the industry, as well as trends and challenges.

Survey Highlights:

Globally, suppliers are expected to face a sales slump between -15% to -20% in 2020. However, the impact of COVID-19 differs significantly among countries. Europe's and North America's higher dependency on exports and global supply chains made the regions more vulnerable to the pandemic. China, in contrast, benefitted from a stronger local market and a more limited lockdown period.

Net debt levels and leverage ratios have substantially increased across the automotive supplier industry. Increasing net debt ratios are driven by declining business volumes since 2018 and upfront investments needed to keep up with industry transformation, with collapsing EBITDA levels in 2020. Leverage in the industry has reached an unhealthy level, even if stronger markets and some normalization of working capital levels may partially resolve the problem in the future.

The pandemic’s impact comes on top of technology-driven trends that are reshaping the industry, centered around “MADE” factors: new mobility trends, autonomous driving, digitalization and electrification.

Automotive suppliers have to be prepared to consistently restructure or exit commodity activities on the one hand, while on the other hand, they must find intelligent ways of capital spending to develop new areas for future profitable growth.

Download the review to read the findings in full.

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