The outlook: Global challenges grow for automotive suppliers

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Automotive suppliers are facing a tougher environment as vehicle production declines, the Chinese market weakens and growing efforts to electrify powertrains are reshaping demand structures.

Automotive suppliers are facing a tougher environment as vehicle production declines, the Chinese market weakens and growing efforts to electrify powertrains are reshaping demand structures. Those are some of the key findings of the “Global Automotive Supplier Study 2019,” which was published by consultants Roland Berger and financial advisory firm Lazard. The report, which analyzed performance indicators of around 600 suppliers, found that component and systems manufacturers could see a decline in their EBIT margins to 6.0% or slightly more, their lowest level since 2012. The EBIT margin, a measure of operating profitability, is set to drop from 7.2% in 2018.

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