Automotive Suppliers COVID-19 Catalyst Change | FTI Consulting

How Automotive Suppliers Are Using the COVID-19 Crisis as a Catalyst for Change

Corporate Finance & Restructuring | Automotive

August 18, 2020

Power Tool

COVID-19 has caused major economic dislocations across the world, and for the automotive industry, such disruptions have always been a catalyst for change. After record performance following the 2008-09 recession, the auto industry began to experience a slowdown in 2018 – signaling the industry was headed into a downturn prior to the global pandemic.

The uncertainty of a post COVID-19 environment is forcing executives across the auto industry to consider and implement strategies that mitigate the effects of ongoing economic instability and its negative impacts on sales demand and production volumes.

“Our productivity will be down 20 percent, and we’ve more than doubled our inventories to protect customers. Customers are not going to pay for these cost increases.”

Auto Executive

Differentiation is Key

FTI Consulting’s analysis of a decade of financial data (2010-2019) for more than 400 auto suppliers reveals numerous insights and market opportunities. This, in combination with our interviews with key industry executives, conducted in conjunction with the Automotive News Data Center, reveals three key areas of differentiation that will help determine who emerges from the crisis in a position of strength:

  • Cost Leadership and Fiscal Discipline (Article One)
  • A Continued Focus on Innovation
  • Navigating the Industry’s Changing Ecosystem

Our findings will be released in a three-part series, along with a comprehensive industry perspective and analysis. Take a moment to download the summary and to subscribe to the series.


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