Roland Berger Management Consulting predicts that the growth of the global auto parts market will slow in the short term, and the industry structure will take place in the long term, according to the “Global Auto Parts Suppliers Research†report released on December 25, 2015. Fundamental changes, suppliers that focus on products, customers, and regional structures may benefit more.
China's auto parts industry output value
The global auto parts market has flourished in the past few years and has always maintained a high level of profitability. The global EBIT margin of auto parts suppliers has been rising since 2011, reaching a record high of 7.5% in 2014.
The report believes that the volatility and uncertainty of the global automotive industry will continue to increase in 2015. The output of global light vehicles is expected to continue to rise in the next two years, but the growth rate will drop sharply. Among them, Europe will maintain a low level, Japan will decline, the North American Free Trade Area will grow moderately, and China is still the only major Growth momentum. In addition, OEMs facing increasing profit pressure have begun to cut additional costs, which has increased the friction between OEMs and suppliers. Therefore, the report predicts that, based on maintaining a high level of profitability, suppliers will slow down their growth in the short term, and the risk of the downside outweighs the opportunity.
As the demand of end customers continues to shift to Asia, raw material suppliers expand downstream, and currencies and capital markets fluctuate, and other factors, the uncertainties faced by auto parts suppliers in the future will increase, and the industrial structure will fundamentally change. Will redistribute the benefits of products and areas. Among them, the profit rate of Chinese suppliers still has a leading edge, but due to fierce competition, its profit level is gradually declining. In the next few years, China will still be the largest market for automotive terminal customers, and Chinese customers’ demand for entry-level vehicles will increase significantly. This poses a challenge to the quality and technology of local OEMs and the cost of Western OEMs. In the long run, 2 to 3 competitive Chinese Tier 1 suppliers will appear in the top 30 global suppliers. As China's number one automotive production base, the gap between local suppliers and global counterparts is gradually narrowing.
The report suggests that suppliers should seize the next wave of opportunities to increase efficiency without limiting their flexibility to quickly adapt to more uncertain and volatile market developments. At the same time, suppliers should be prepared to benefit from the transfer of industries and mitigate the risks in the medium to long term.
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