Global Automotive Supplier Study 2025

The industry currently faces a challenging market landscape, clouded by stagnating growth, geopolitical uncertainty, rising competition, and mounting cost pressures from prolonged technological transformations. The study describes the current period in the automotive industry as one of “stagflation”, where stagnating volume growth is coupled with the urgent need to transform established business models.

The financial performance of automotive suppliers reflects this sentiment, with EBIT margins remaining 2 percentage points below pre-Covid levels. The study predicts profitability challenges to persist and likely intensify in the coming years, driven by five key trends: 

1. Stagnating global sales volume, 

2. Slower adoption of battery electric vehicles (BEVs), 

3. Rising software costs and increasing customer demand for advanced driver assistance systems (ADAS) and connectivity features, 

4. Swelling economic and competitive pressures in China, and

5. Resurging geopolitical tensions and global trade barriers. 

To remain competitive in today's dynamic automotive landscape and prepare for the future, the study recommends suppliers optimize their portfolios through partnerships, streamline their product offerings, and focus on strategic technologies. Western suppliers must prioritize structural cost improvements to stay competitive amid rising pressure from Chinese players. Technology and cost leaders should focus on strategic, well-executed expansion to sustain their advantage. 

Given accelerating geopolitical dynamics and market volatility, executing clear and disciplined regional strategies is crucial. These strategies will be essential for ensuring resilience, enhancing profitability, and improving capital structures.