While the global automotive supplier industry continued to grow in 2017, disruption caused by four megatrends – Shared Mobility, Autonomous Driving, Digitization and Electrification – has gathered pace, according to the “Global Automotive Supplier Study 2018” by Roland Berger and Lazard. The study projects that supplier CEOs will need to transform their existing business models in order to capture shifting profit pools caused by these megatrends.
The study analyzed performance indicators from approximately 650 suppliers around the globe to assess the current state of the industry, as well as trends and challenges.
In 2017, the global supplier industry is expected to see revenues increase by approximately 3 percent compared to 2016, and maintain profitability levels with an average EBIT margin of approximately 7.3 percent. While volumes have reached record levels, global growth is slowing in some regions, with light vehicle production in North America expected to shrink by 3 percent to 17.4 million units in 2017. For 2018, the study authors expect suppliers to enjoy continued revenue growth, but at a slower pace, while maintaining stable EBIT margins. “The overall fairly positive sentiment is reflected in valuation levels of suppliers that are still trading above their long-term average,” said Christof Söndermann, Director at Lazard. “But the four megatrends in the automotive industry are causing disturbance in all supplier domains.”