RB-2023年全球汽車供應商研究-Global Automotive Supplier Study 2023 - Opportunities for growth amid the challenge of change

REPORT

GlobalAutomotiveSupplierStudy2023

Opportunitiesforgrowth

amidthechallengeofchange

Cover:ArturDebat|GettyImages

Managementsummary

fterthreeconsecutiveyearsofcrisis,the

nascentrecoveryintheautomotivemarket

isprovingtobeaslowandinconsistentone.

Supplierscontinuetostrugglewithabroadsetof

challenges,fromlacklustergrowthtocost-driving

regulatoryframeworks,fromexpensiverawmaterialstoincreasinglaborrates,fromworseningcapital

constraintsandfinancingcoststosubsequently

decliningmargins.Traditionalplayersinparticulararehavingahardtimedealingwithglobaldisruptionsandfindingtheirplaceinaseeminglyunstoppabletechnologicaltransformation.Thisnewstudy–

conductedbyRolandBergerincollaborationwith

Lazardinlate2023–takesadeepdiveintowheretheautomotivesupplierindustryisattodayandwhat

keychallengesitfaces.Thoughthesituationis

unquestionablysoberingoverall,thestudyalso

identifiesopportunitiesandstrategiesthatcanhelpsuppliersadapttoandsuccessfullymasterthese

testingtimes.

2RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

A

Contents

1

4

Page

Takingstock

Slowergrowthisheretostay

2

7

Automotivesuppliers'financialhealth

Copingwithstructurallythinnermargins

3

14

Outlookforthesupplierindustry

Growthinnewplacesandnewtechnologies

18

4

Recommendations

SelectivestrategiesandradicalrepositioningThereisawayforward!

3RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

2018

2019

2020

2021

2022

2023e

2024e

2026e

2028e

2030e

1

Takingstock

NorthAmerica

SouthAmerica

Slowergrowthisheretostay

Peakvolume:17.9(2016)

17.0

16.7

16.5

16.5

16.3

15.6

15.0

14.3

Peakvolume:4.3(2013)

3.43.32.22.62.82.93.13.53.94.2

13.0

13.0

A

Thecoronaviruspandemicdestroyedadecadeofgrowthintheautomotiveindustry.And

thatwasonlythebeginning.Supplychaindisruptionsfollowedevenaheadofthewarin

Ukraine,whichinturnacceleratedsurgingcommoditypricesandgeneralinflationary

pressures.Addinlaborshortages,massiveinflationandrisinginterestrates,thethreatto

tradeemanatingfromresurgentnationalisttendencies–allalongsideagroundbreaking

andongoingshiftinthepowertrainanddigitalizationtechnologiesattheveryheartof

automotiveengineering–anditiseasytoseewhylargeswathsoftheindustrywereinrough

shapeevenbeforethelatestgeopoliticalconflictflaredupintheMiddleEast.Permacrisis,it

seems,isthenewnormal.

SouthAsia

Europe

AWhileChinaandSouthAsiaareexpectedtobethegrowth

driversofglobalvehicleproduction,EuropeandNAwill

likelynotreturntopeakvolumesbytheendofthedecade

22.0

Peakvolume:22.4(2017)

21.2

16.615.915.817.117.617.517.818.0

Peakvolume:9.6(2022)

Productionvolumeof

12.5

11.5

10.7

9.69.89.8

9.2

8.4

7.9

6.2

passengercars1)byregion,

2018-2030e[munits]

Global2)

94.2

Peakvolume:95.1(2017)95.797.6

92.4

88.1

89.0

85.7

82.3

77.2

74.6

China

Japan/SouthKorea

Peakvolume:28.2(2017)

26.924.723.624.826.426.427.8

32.1

33.2

30.5

Volumebelowhistoricpeakvolume

Volumeabovehistoricpeakvolume

Peakvolume:16.5(2007)

13.213.1

12.211.7

11.210.911.1

11.011.010.5

1)Incl.LCV;excl.CIS

2)Incl.RoW

Source:IHS,RolandBerger/Lazard

4RolandBerger|Lazard|GlobalAutomotiveSupplierStudy20235RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

71

74

95

97

Peakvolumes

[munits]

Growthhasneverthelessreturnedtoautomotivevehicleproductionvolumes,which

havebeenrecoveringslowlysincebottomingoutearlyinthepandemic.However,this

volumegrowthisgenerallytakingplaceonlyinChina,IndiaandSoutheastAsia.Also,itis

largelybeingdrivenbynewcomponents(forbatteryelectricvehicles,forexample)madeby

newplayers–insomecasesfornewOEMs.Bycontrast,volumesareeffectivelyflatliningin

JapanandSouthKorea.Worse,productionvolumesinEuropeandNorthAmericaarenot

likelytoreturntothepeakswitnessedin2017/2018untilaroundtheendofthedecade.Thisis

aseriousissuefortraditionalEuropeansuppliers,whosefinancialhealth–asdiscussed

below–isalreadysufferingbadlyastheyeffectivelysitonthesidelineswatchingother

playersparticipateingrowthinothermarkets.

Asgrowinguncertaintysurroundstheeconomicfutureandtheindustrystillfaces

geopoliticaluncertainties,Indiatooisputtinginanotableappearanceontheworld's

automotivestage.ThesubcontinentreboundedswiftlyinthewakeofCovidandisprojected

toseeforcefulgrowththrough2030.ThesameseemstoapplyforSoutheastAsia,too,which

isplottingatrajectorysimilartothatofIndia.UnlikeinChina,however,thepotentialfor

Westernsupplierstoplayasignificantroleinthesemarketscurrentlyappearslimited,and

neithermarketcankeepupwithChinaintermsofoverallvolumes.

Tosummarize:globalautomotiveproductionvolumegrowthwillnotsurpasspre-Covid

levelsuntil2028attheearliest.Moreover,eventhegrowththatistakingplacewillbedriven

mainlybynewtechnologiessurroundingthetransitionfrominternalcombustionenginesto

electricpowertrains.Andasthisgrowthgravitateseastward,EuropeandNorthAmericaare

inrealdangerofsimplylosingrelevance.Inparticular,Europeansuppliersthathavehitherto

donethevastmajorityoftheirbusinessontheirdomesticmarketneedtorealizethatthey

willmostlikelyneverseeareturntothevolumestheyenjoyedinthepast.

Themarket"asis"clearlyraisesalotofveryseriousstrategicquestionsforautomotive

supplierswhowanttostaysuccessfulintoday'srapidlychangingenvironment.

2

Automotivesuppliers'financialhealth

Copingwithstructurallythinnermargins

Manyofthepainpointstouchedonabovearehavingaverytangibleimpactonautomotivesuppliers'profitability.Lowervolumeshaveerodedtheirabilitytoreaptheefficiencybenefitsofscaleeffects,forexample.MarketvolumesremaindistinctlyvolatilebecauseofsupplychainfrictionsandprogramshiftsontheOEMs'side,makingitdifficultforallmarketplayerstodraftreliableplans.Achronicshortageofsuitablyskilledlaborhasbeenworsenedbytheneedfornewskillsetstocopewithdigitaltransformationandthetransitiontonewpowertrains.Thisfactinturnhasconspiredwithotherinflationarypressures–suchassteepwagerisesinEuropeandthestill-growingexpectationlevelsofunionsgoingforward–tosharplydriveuplaborcosts,alongsidehigherpricesforutilitiesandmaterials.Atthesametime,OEMsareincreasinglylimitingtheircontributiontosupplierstocompensateforsuchimpacts,forinstance.Allthesedevelopmentshaveunfoldedagainstthebackdropofhigherinterestratesandadeterioratingperceptionofthesectoronthecapitalmarkets,leadingtoacommensuratelyhighercostofcapital.B,C,D

BAlthougharecoveryinglobalautoproductionisexpected,

thegrowthdynamicsofthepastwillnotbeachievedanymore

Productionvolumedevelopment2001-2030

Growthdynamics

94

4.4

3.6

Manysuppliersneed

Global

financialcrisis

dedicatedperformanceprograms

2.0

1.7

tostabilizetheirmarginsand

securethecompanyagainst

CAGR

[%]

futureuncertainties.Theyshould

2001–20072007–20102010–20172017–20222022–2030e

reconsiderallactivities,

specificallyintermsofproduct

Covidcrisis,chipshortage,rawmaterialshortageandwarinUkraine

portfolio,productionlocations

-2.8

andsupplychainstructures."

FelixMogge,Partner,RolandBerger

Source:IHS,RolandBerger/Lazard

6RolandBerger|Lazard|GlobalAutomotiveSupplierStudy20237RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

2017

2018

2019

2020

2021

2022

2023

YTD

CLaborcostsincreasedsignificantlybecauseofhighinflationin

2022/2023butalsoduetoalackofskilledworkforce

Labormarketparameters

Hourlylabor

wageYoYgrowth

Vacancy

development[#k]

Unemployment

rate[%]

Germany

1,000

500

0

10

5

0

5.7

5.7

5.9

5.7

5.3

5.25.0

10

5

0

5.6%

1.8%

USA

12,000

6,000

0

10

5

0

8.1

5.3

4.4

3.93.7

3.8

3.6

10

5

0

5.4%

3.5%

China

100

50

0

10

5

0

4.2

4.1

4.3

3.9

3.9

3.83.6

10

5

0

6.3%

2.3%

Historical

Projected

annualgrowth

2023-2024

Q12019

Q12020

Q12021

Q12022

Q12018

Q12017

average

2017-2022

Source:CenterforAutomotiveResearch,IMF,RolandBerger/Lazard

DComparedwithpre-crisislevels,theautomotivesupplierindustryhasstructurallylostthreepercentagepointsonEBITmargin

Keysupplierperformanceindicators,2015-2023e(n=~600suppliers)

Revenuedevelopmentglobally

Indexed

[2015=100]

YoY[%]

EBITmargin[%]

126

121

Covid

impact

103Inflation

100impact(c.11%)

17

7

6

4

2

-2

-11

201520162017201820192020202120222023e

8

7.6

7.2

7

6.7

6

5.3

5.1

5

4

3

22.5

1

0

201520162017201820192020202120222023e

Source:Companyinformation,RolandBerger/Lazard

109

102

100

4.6

6.8

114

113

121

5

5

8RolandBerger|Lazard|GlobalAutomotiveSupplierStudy20239RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

0

Takentogether,theseandotherfactorshavestructurallyshaved3%pointsoffsuppliers'EBITmargins,whichhavefallenfromaround7.5%tounder5%.Diggingdeeperintothisprofitsqueeze,anumberoffurtherinterestingpointsaddrevealingdetailtothereasonsforthisdecline.

Thefirstisthatafteryearsoframpantreturns,profitabilityinChinaappearstobe"normalizing"tothekindoflevelsmorefamiliarinWesternmarkets.ThisbeganwiththeCovidlockdownsin2021/2022,buthascontinuedastheChineseautoindustryincreasinglyalignswithWestern-stylestandards.EBITmarginsinthismarketthusseemtobestabilizingatmoremodestlevels(currentlyabout5.4%)thaninthepast–eventhoughthesearestillbetterthanreturnsinSouthKoreaandJapan,andfarsuperiortoEBITinEurope,whichhasbeenhithardbymaterialshortagesandpriceincreasesexacerbatedbythewarinUkraine.

Followingatrendobservableinrecentyears,anotherkeyfactoristhatlargersuppliersareevidentlybetterabletoabsorbcrisisimpactsandstillstayonanevenkeel.Smallsuppliersareoftenhighlydependentonspecificproductsormarketsandsufferthemostwhenmarketsaredisruptedand/orfinancialchallengesarise.Afterridingthewaveof

Inanenvironment

wherelowerreturnsand higherriskmeetmorelimitedandmoreexpensive funding,suppliershaveto pursuestrategicportfolio adjustmentsandexplore newwaystoremaincompetitive."

Dr.ChristianKames,Co-HeadDACH,Lazard

extraordinarilystrongperformance(withmargins

upwardof10%insomecases)fromAsianprocess

specialistsforthepastdecade,evenmid-sizedplayers

arenowseeingEBITerode.Incontrast,largersuppliers

aregenerallymorecapableofrecoveringcostsfrom

OEMs–althoughthismaynotbethecaseforthevery

largestplayers,whosevolumecansignificantlyaffect

OEMs'profitstoo.E

Athirdimportantfactorinthestructuralmargin

declineisthathigherprofitsarenowcomingfrom

differentactivities.Whilemarginsarevisiblydeteriorating

acrossallaspectsofsupply,tiresareperhapstheonly

traditionalautomotivedisciplinewherereturnsremain

stable.Andeventhisismostlybecauseoftheirlarge

shareofaftermarketbusiness.Ontheotherhand,

EWhileconventionalsuppliersarehit,manyofthetechplayersare

farlessimpactedbythecurrentshort-termdevelopmentsandchallenges

Positioningofautomotivesuppliercluster

Impactoverthenextyears:

––stronglynegative|–negative|

noimpact|++stronglypositive|+positive

A

Lackofvolumeandscaleeffects

BVolumevolatility

rawmaterialprices

CAbove-average

DHighenergyprices

E

Limitedclaim

success

Laborscarcity

Fandsalary

increases

RisinginterestandGunfavorableequity

capitalmarkets

ICE-focusedsuppliers

EUcommodity

players

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

China-basedOES

Large-scalecost

leaders

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

Batteryleaders

Software/techgiants

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

Batteryfollowers

Software

boutiques

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

–

–

0

+

+

Source:RolandBerger/Lazard

10RolandBerger|Lazard|GlobalAutomotiveSupplierStudy202311RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

2018

2019

2020

2021

2022

FThemargindeteriorationisvisibleacrossalldomains,

withtiresandelectronics/infotainmentbeingthemoststable

Keysupplierperformanceindicatorsbyproductfocus[%]

Revenue

CAGR'15-'22

EBITmargin'19-'22

c.3.1%

c.5.1%

c.4.3%

c.2.7%

c.0.3%

c.3.7%

9.3

8.8

7.8

6.1

6.2

5.7

5.5

5.3

5.3

5.2

5.0

5.0

4.6

4.4

4.3

5.1

4.3

4.1

4.0

3.3

2.6

1.8

1.1

1.2

Chassis

Powertrain

Exterior

Interior

Tires

Electronics/

infotainment

EBIT2019

EBIT2020

EBIT2021

EBIT2022

Source:Companyinformation,RolandBerger/Lazard

GContrarytotraditionalcomponents,suppliersinthenewvehicledomainscanachievemuchhigherEBITmargins

SupplierEBITmargincomparison,oldvs.newtech[%]

1)Volkswagen,BMW,Mercedes-Benz,Toyota,Hyundai,Tesla,Ford,GM,BYD,SAIC2)CATL,

FarasisEnergy,GSYuasa,SamsungSDI3)AMD,Wolfspeed,Elmos,Infineon,Intel,Nvidia,NXP,ON,Qualcomm,Renesas,Rohm,ST,TexasInstruments4)Microsoft,Google,Apple,Qualcomm

OEMs1)

8.08.3

Traditional

suppliers

6.8

Battery2)

Semiconductor3)

Software4)

34.2

27.726.426.1

29.7

26.8

30.8

28.9

21.721.6

10.810.5

7.2

9.5

8.2

5.8

4.8

4.8

5.1

2.5

5.3

4.6

Source:Consensus,RolandBerger/Lazard

thetrendstowarddigitalizationandnewfunctionssuchasconnectivityandautomated

drivinghaveenabledelectronicsandinfotainmentsupplierstodefendtheirmarginsfairly

well.Thatsaid,theshifttowardelectrifiedvehiclesiscreatingsignificantmarginissuesfor

almostalltypesofpowertrainsuppliers:forplayersfocusedsolelyonICE,volumesare

slowlystartingtocomeunderpressureasthelastgenerationsofcurrentproductscome

toanend.ForICEplayerswhoareactivelymanagingthetransitiontowardelectrified

powertrainproducts,R&Dspendingone-mobilitycontinuestoeatintoprofitability.

Moreover,newEVproducts–manyofthemacquiredthroughhard-foughtcompetition–

arestillfarfromprofitable,eitherfromapriceperspectiveorbecauseBEVmodelsalesstill

lackthescaleneededtooffsettheseeffects.F

PerhapsmostcriticallyofallfortraditionalOES,thetransitioninpowertrainsawayfromICEtechnologyisbringingcompletelynew,powerfulandmuchmoreprofitableplayersintotheautomotivespaceinpreciselythoseareaswithhighprofitpools.Aglanceatthechartaboveillustratesthepoint:whilebatteryplayershaveonaveragedoublethemarginsoftraditionalsuppliers,themarginsofnon-automotivesemiconductorandsoftwaresuppliersaremorethanfourtimesashigh(andsignificantlyhigherthanthoseofOEMs).G

Deeppocketsarekeywhenitcomestoreapinghandsomerewardsinautomotivegrowthsegments.Thenewtechplayersenteringthemarket–togetherwithsuccessfulAsian-basedsuppliersandsomelargetraditionalOESofsystemicimportance–havetheseresourcesandarethusbetterabletofundtheR&Dthatwillletthemcapturelucrativemarketsharesgoingforward.

12RolandBerger|Lazard|GlobalAutomotiveSupplierStudy202313RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

A

3

Outlookforthesupplierindustry

Growthinnewplacesandnewtechnologies

Eveniftherateofexpansionoverallhasslackened,wehaveseenthatautomotivesupplyis

stillanexpandingindustry.Growthisslatedtoaverageroughly4%perannumfrom2022

through2030.Andwherethereisgrowth,thereareopportunities.Theprincipalchallenge

facingexistingsuppliers,however,isaptlysummarizedinthechartshownbelow.H

Simplyput,thebulkofautomotivesupplygrowthfortheremainderofthisdecadewill

comefromdifferentcomponentsthaninthepast.Itwillcomeinresponsetodemandfrom

differentcustomersthaninthepast.Andallthesignssuggestthatitwillberealizedby

differentcompetitorsthaninthepast.Astraditionalcombustionenginetechnologiescontinuetheirdeclineandmechanicalcomponentsingeneralslideevenfurthertowardcommoditization,itwillbesoftware,electronicsandbatterytechnologythatprimarilydelivergrowth.NewBEVOEMsfromAsiawillbethemainsourceofdemand.AndwiththeexceptionofTesla,whosegrowthisliterallyoffthecharts,ChineseOEMssuchasBYDaretheonlyonescurrentlyfuelingconstantgrowth.Critically,traditionalNorthAmericanandEuropeansuppliersinthepowertrainsegmenthavevirtuallynochanceofparticipatinginthisgrowthtoanysignificantdegreeiftheystaywiththeirexistingportfolios.I

ItisalsoimportanttonotethatChineseOEMsaresubstantiallyenlargingtheirshareoftheirhomemarket.In2024,localOEMsare–forthefirsttime–expectedtoaccountformorethan50%ofvehicleproductioninChina.Evenintheattractivepremiumsegment,whichhas

HTheautomotivesupplierindustryoffersgrowthbutwith

differentcomponents,customersandcompetitors

Globalautomotivesuppliermarketdevelopment2022-2030e1)[EURbn]

Bycomponents

401,260

60

255

915

235

145

55

135

ADAS3)

Software4)

ICE

decline

xEVvalueadd

Battery

value

add2)

LTAs

Revenuepool2030

Revenuepool2022

Volume

growth/

penetration

Source:RolandBerger/Lazard

1)Assumingconstantmaterialprices2)Incl.cells

3)Incl.autonomousdriving

4)Incl.E/Earchitecture

LTAs:long-termagreements

ICE:internalcombustionengine

ADAS:advanceddriver-assistancesystems

Bycustomer

B

Bycompetitor

C

1101,260

3231,260

187

48

127

915

105

915

Revenuepool2022

TraditionalOEMs

Up-and-

coming

CHNOEMs

NewBEVOEMs

Revenue

pool

2030

Revenuepool2022

Trad.OES

(old

techn.)

Trad.OES

(new

techn.)

New

OES

Revenuepool2030

14RolandBerger|Lazard|GlobalAutomotiveSupplierStudy202315RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

Large-scalecostleaders

?Leveragedesign-to-costandproductionefficienciesintimesofmacrochallenges

15%

China-basedOES

?ExposuretogrowingOEMclientsinAsia

?Loweraveragepersonnelcostbasis

"Winners"

EUcommodityplayers

?Highexposuretomacrocostincreases,onalreadylowmarginlevels

50%

ICE-focusedsuppliers

?OftenlateintransitiontoBEVtechnologies

?Continuouslydecreasingscalesandlimitedrefinancingopportunities

"Losers"

IChineseOEMscontinuously

gainmarketshareintheirhome

marketandhavealeadingpositioninBEVproduction

RoleofChineseOEMs

Salesdevelopmentin

ChinabyOEMregion

35%

33%

39%

53%

49%

9%

10%

9%

8%

28%

8%

27%

25%

21%

20%

28%30%28%

19%

22%

20182019202020232025

CHNNA

Europe

Asiaexcl.China

Source:IHS,RolandBerger/Lazard

Automotive

suppliershavelostnearly3%-pointsofEBITmarginsince2017/18

–currentprofitability levelisnotsufficienttomatchtheaveragecostofcapital"

ChristofS?ndermann,ManagingDirector,Lazard

historicallybeendominatedbyEuropeanOEMsin

particular,twoofthetopfivebest-sellingmodelsin2022

alreadycamefromChinesemanufacturerBYD.Asthe

Chinesegovernmentpersistsinincentivizinglocal

players,butalsobecauseofthegrowingloyaltyof

Chinesecustomerstodomesticplayers,thistrendisset

tocontinue:itisnocoincidencethatnineofthecountry's

toptenpureelectricvehiclemanufacturersarehome-

grown.Thelogicalconsequenceofthistrajectoryisthat,

ofthe30millionorsocarssoontobemadeforthe

Chinesemarket,perhapslessthan15millionwilleven

theoreticallybeaccessibletoWesternplayers.

Paradoxically,amarketgrowingfastinabsoluteterms

couldthusbecomeaflatteningorevenshrinkingplaying

fieldforWesterncompanies.

Fortraditionalsuppliers,thewritingisonthewall.Itis

hightimeforthemtoseeChineseOEMsasserious

customersandChinesesuppliersasveryprofessional

competitors.Nordoesthisapplyonlytothedomestic

Chinesemarket:asleadersintheadvancedtechnologies

surroundingbatteryelectricvehicles,theseplayersare

alsolookingtorampuptheirmarketsharesinother

regionsaswell.Moreover,theirimpressivecommandof

scaleeffectshelpsthemkeepoverallcostsdowneven

when,likeWesternsuppliers,theyarefacedwithrising

inputcosts.Therealisticnatureoftheirexpansion

ambitionsisreflectedinChinesesuppliers'upwardsurge

inglobalrankingtables.J

Whenwedistillthisindustryoutlookintothesimple

categoriesofwinnersandlosers,asoberingpicture

emergesfortraditionalWesternOES.K

Largenumbersoftraditionalsuppliersarebecoming

increasinglyirrelevantasnewcomers–manyofwhich

areestablishedandwell-resourcedtechnologyplayers

fromotherindustries–assumestrongmarketpositions

andcaptureattractiveareasoffuturegrowth.Theseries

ofcrisesenumeratedatthebeginningofthisstudyhas

acceleratedthisparadigmaticshiftintheautomotive

supplyindustry.Perhapstheonlytrumpcardslarge

traditionalsuppliersstillpossessaretheirscaleandtheir

financialstrength.Goingforward,however,theirmarket

successwilldependonhowtheyplaythesecards–which

leadsusintoconcreterecommendationsforplayersin

theautomotivesupplyspace.

JChineseplayersare

professionalizingand

areactiveingrowing

segments,asreflected

intheirpresenceinthe

globaltop-100

RoleofChinese

automotivesuppliers

Top-100suppliers

Rankofbest

CHNsupplier

#24

#12

#3

RevenueshareofCHNsuppliersintop-100

2%

5%

9%

No.ofCHN

suppliersamongglobaltop-100suppliers

11

7

3

Source:Consensus,RolandBerger/Lazard

2017

2012

2022

KWhilenewsuppliersmostlyseetheautomotiveindustryas

anattractivegrowthopportunity,traditionalOESoftensuffer

Automotivesuppliercluster

Software/techgiants

?Leveragetechnologyknow-howfromotherindustriesandfinancialroomforinvestment

20%

Batteryleaders

?Leadingpositioninasegmentwithhigh

entrybarriersandrapidgrowth

Batteryfollowers

?Largeinvestmentrequirementsforuncertainrevenues

?Lessscaleeffectsthanmarketleaders

15%

Softwareboutiques

?Oftentooinefficient/unusedtoautomotiveprocurementstandardsandprocesses

?Partlyinferiorsoftwarequalitycomparedwithtechgiants

TraditionalOES

NewOES

..%Estimatedshareofsupplierswithinthecluster

Source:RolandBerger/Lazard

16RolandBerger|Lazard|GlobalAutomotiveSupplierStudy202317RolandBerger|Lazard|GlobalAutomotiveSupplierStudy2023

Overall,thesuppliermarket

remainsagrowthbusiness,albeit

withdifferentcomponents,for

differentcustomers,andforother

suppliersthantoday."

FlorianDaniel,Partner,RolandBerger

RolandBerger|Lazard|