The economic crisis of suppliers using the example of the automotive industry: An analysis of the causes and global influences - Image: Xpert.Digital
The great transformation: challenges and opportunities for automotive suppliers
Turning point in the auto industry: What suppliers can learn from the current crisis
The automotive supplier industry is facing one of its biggest challenges in recent history. Many companies are struggling to survive while the entire industry is facing profound changes. This report analyzes the causes of the crisis, highlights the global influences and outlines possible solutions for a sustainable future.
Current economic situation of suppliers
Suppliers to the automotive industry are exposed to immense pressure. German suppliers in particular are losing market share internationally as they are confronted with a variety of challenges. Traditional centers of the automotive industry are losing importance, while new, dynamic markets such as China and India are emerging. While large automobile manufacturers (OEMs) are able to pass on cost increases to their customers, suppliers are often unable to take advantage of this flexibility. This puts many companies in an economically precarious situation.
Inflation, geopolitical uncertainties and the transformation towards electromobility are exacerbating the situation. In addition, many suppliers have difficulty accessing capital. Due to restrictive lending policies, banks are often unwilling to provide the necessary liquidity, which further limits companies' scope for action.
Global economic situation and its effects
The global economic situation plays a crucial role in the current crisis. High energy costs in Germany place a significant burden on the competitiveness of German suppliers, especially in comparison to countries such as China, where energy prices are significantly lower. This means that German suppliers are losing market share, especially in China, one of the largest growth markets in the automotive industry.
Uncertainty about the future of electromobility and consumers' reluctance to buy cars pose further challenges. In addition, there is increasing competition from foreign suppliers, material shortages and global supply chain problems, which are exacerbated by geopolitical tensions and crises such as the war in Ukraine. The dependence on a few major customers and the “just-in-time” delivery strategy make suppliers particularly vulnerable to production fluctuations.
Examples of affected companies
Some companies in the supplier industry illustrate the precarious situation:
- MBW Group: The company had to file for bankruptcy due to delayed series start-ups, planning uncertainties and rising costs for materials, energy and personnel.
- WKW: Here too, bankruptcy was the result. The main reason was a failed investor deal.
Reasons for the economic difficulties
The causes of the crisis are complex and closely linked. The central factors include:
- High energy prices: Energy-intensive companies suffer particularly from the sharp rise in energy prices, which often cannot be passed on to customers.
- Material bottlenecks and costs: Delivery difficulties with raw materials and spare parts lead to production delays and enormous additional organizational effort.
- Transformation to electromobility: The change to electric vehicles requires high investments. Suppliers that specialize in components for combustion engines are faced with the task of fundamentally adapting their business model.
- Global crises: Pandemics, geopolitical conflicts and economic instability are putting strain on the entire industry.
- Volatile markets: Dependence on automobile manufacturers makes suppliers vulnerable to fluctuations in sales.
- Delayed product launches: Delayed launches of new models lead to financial bottlenecks.
- Supply chain issues: Global disruptions impact production stability.
In-depth analysis of the causes
In addition to the obvious economic and geopolitical factors, there are also internal challenges contributing to the supplier crisis. These include management errors, inefficient corporate structures and inadequate adaptation to the requirements of electromobility. Many companies have failed to invest in new technologies in a timely manner and to align their business models with changing market conditions.
Another problem is insufficient diversification. Suppliers that are heavily dependent on a few major customers face existential threats when sales fluctuate or production interruptions occur. The low flexibility of many companies also makes it difficult to adapt to unforeseen changes.
Impact on the entire automotive industry
The supplier crisis has far-reaching consequences for the entire automotive industry. OEMs (Original Equipment Manufacturers) are heavily dependent on the performance of their suppliers. If suppliers run into difficulties, this can significantly affect the production and competitiveness of car manufacturers. Delays in the delivery of components or quality problems directly affect the final products.
In addition, OEMs face the challenge of investing in transformation themselves while supporting their suppliers. Close cooperation and strategic partnerships are therefore essential in order to overcome the crisis together.
Possible solutions
To overcome the crisis, suppliers must take proactive measures. The following approaches could help secure the future viability of the industry:
1. Flexibility and adaptability
Suppliers must adapt their processes to changing market conditions. This includes the development of new technologies, especially in the area of electromobility.
2. Diversification
The dependence on a few major customers should be reduced. Opening up new markets and collaborating with customers from other industries can minimize risks.
3. Investing in innovation
Research and development is the key to remaining competitive. There are numerous opportunities, particularly in the area of sustainable mobility.
4. Cooperation and alliances
Strategic partnerships can help reduce costs and exploit synergies. Closer collaboration with OEMs can also bring benefits.
5. Efficient restructuring
In the event of insolvency, quick and effective restructuring is crucial. Companies should seek professional help in order to remain competitive in the long term.
6. Political support
Politics plays an important role in overcoming the crisis. Targeted funding programs and investments in infrastructure can help to strengthen the competitiveness of suppliers.
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Rethink structures and realign yourself strategically
The automotive supplier industry is facing an epochal crisis triggered by a variety of factors. The global economic situation, the transformation towards electromobility and the dependence on a few major customers make it clear that the industry is facing profound changes.
To overcome the crisis, innovation, flexibility and cooperation are essential. At the same time, companies must rethink their internal structures and realign themselves strategically. Politicians can contribute to stabilizing the industry through targeted measures.
Ultimately, the future of automotive suppliers will depend on how successfully they overcome the challenges and adapt to the new circumstances. The crisis can only be overcome through a combination of adaptability, innovation and close cooperation with other players in the industry. Change not only offers risks, but also opportunities to actively shape the future of mobility.
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