Automotive Industry Insights
June 27, 2023DownloadsDownload Brochure
It is common knowledge that the last few years have been challenging for the automotive sector: heightened interest rates, looming recessionary fears, consolidations, supply chain shortages and more. These macroeconomic concerns culminated in an OEM profit decline in 2022 while capital expenditures remained high. Margin pressure has also hit the supply base, as both volume and product mix (e.g., electric vehicle (“EV”) vs. internal combustion engine (“ICE”)) uncertainty made it difficult to develop recovery plans and the long-term strategic investment decisions required to reduce costs.
Suppliers find themselves in a precarious position within this constantly shifting ecosystem. The automotive industry is different now, suppliers specifically need to understand what these changes mean for them and proactively - and with urgency, ask questions such as: How can I increase flexibility of my operations to keep up? What can I do to improve revenue mix and use this moment to our advantage? How can I best arm my company to remain relevant?
For automotive suppliers, it will be critical to proactively transform, or they risk becoming irrelevant.