Tearing profits apart: how tier 1 automotive suppliers can mitigate shrinking margins
The latest report by Automotive from Ultima Media examines the profits and outlook for the top 20 automotive parts suppliers and explores the strategies and solutions they should consider to avoid significant disruption in the 2020s, including the key role they will play in automotive design and R&D
In parallel with their OEM customers, major automotive tier 1 suppliers are reporting falling profits amidst declining vehicle sales and manufacturing volumes. This economic uncertainty across the automotive industry, combined with growing requirements to invest in new technology, solutions and skills, is likely to lead to further profit margin compression for global automotive suppliers in the first half of the 2020s.
The impact is likely to accelerate changes across the global automotive industry, from cost and job reduction programmes, to a rise in joint ventures, mergers and acquisitions among tier 1 companies. Some firms are likely to reshape their business models altogether, spinning off divisions that produce non-core or highly commoditised products to focus more on sales of higher growth segments.
These impacts and strategies are analysed in-depth in the latest report by Automotive from Ultima Media, ‘Automotive Tier Supplier Profit Analysis: Mitigating Margin Compression Whilst Navigating Unprecedented Industry Transformation’ (download it for free here). It profiles the top 20 global automotive suppliers and examines the development of their profit margins over the past ten years, as well as assessing their outlooks. It also explores the innovations and solutions that automotive parts manufacturers across the industry can use to mitigate margin compression.