Roland Berger publishes Global Automotive Supplier Study 2016
On 7 July, Roland Berger published their latest Global Automotive Supplier Study, produced in cooperation with Lazard. The study identifies automotive trends over the last year and provides insight into future developments. As part of the study, performance indicators of more than 600 international suppliers were analysed to assess the current state as well as trends and challenges in the industry.
The study acknowledges that while 2015 was another excellent year for automotive suppliers, volatility increased and global revenue growth slowed. Furthermore, the ongoing year-over-year improvement that the supplier industry has enjoyed since 2010 has largely come to a standstill, with revenue growth is at its lowest in seven years, and several product segments have actually seen profit margins slightly below the 2014 level. Therefore, a potential market cool-down in 2016 and future technology changes will remain key priorities for suppliers.
Key findings
- 2015: global profit margins remained at an all-time high of 7.5%
- However, the ongoing year-over-year improvement that the supplier industry has enjoyed since 2010 has largely come to a standstill
- Revenue growth has been the lowest in seven years, and several product segments have actually seen profit margins slightly below the 2014 level
- The (aftermarket portion of the) tire business has clearly driven average global supplier profitability in 2015 with margins well above 10 percent
- Powertrain suppliers have come under intensified pressure (losing ground vs. 2007), while the interior segment shows signs of recovery following a unique intra-segment consolidation over the past two years
- Suppliers focused on product innovation continue to maintain a two percent average margin lead over process focused suppliers
- However, the top performing process specialists achieve similar profitability levels as their innovation-focused peers
- Suppliers will have to cope with growing market volatility across the world – at the same time, the (revolutionary) changes of the future are becoming much more evident
- The triad market will most likely be growing slowly, and China is entering a stage of maturity with higher sensitivity toward macroeconomic impacts
- Brazil and Russia continue to suffer from further reductions of demand (at least in 2016), while growth potentials in Iran or North Africa are yet to materialise
- As a consequence, global vehicle production is expected to grow only moderately at ~2 percent in 2016 and beyond
- Suppliers will have to rely on other factors to stabilise or even drive up their margins to remain prepared for sudden macroeconomic shocks that could lead to substantial short-term reductions of demand
- On the powertrain side, the development of e-mobility is gaining a lot of momentum
- Roland Berger expects the market for electrified vehicles to multiply by a factor of 7-10x over the next decade
- Autonomous driving is becoming a reality – with OEMs as well as new players combining it with vehicle connectivity (and potentially e-mobility)
- Predicts completely new business models for automobile usage and ownership will emerge within the next ten years
- Suppliers will face a market for assisted/automated driving components that is expected to grow by a factor of five until 2025
- At the same time, suppliers will likely face fierce competition from new players formerly outside of the automotive supplier industry
- Mergers and acquisitions are expected to grow in relevance for automotive suppliers to permit them to gain a technological edge in a faster moving environment or to maintain a (scale-driven) competitive edge
- However, the complexity of acquisition-led growth will continue to be substantial due to intense competition for attractive targets, high price levels and the challenges of global post-merger integrations
- Study advises suppliers to accelerate flexibility and agility in developing (and running) their business
Please click here for the full study
And for more information from Roland Berger, please click here
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In: CLEPA News, Connectivity & Automation, Environment & Energy, Growth & Competitiveness, Safety