The report pointed out that the global auto parts market has flourished in the past few years and has maintained a high level of profitability. Since 2011, the global EBIT margin of auto parts suppliers has been rising, reaching an all-time high of 7.5% in 2014.
According to the report, the volatility and uncertainty of the global automotive industry continued to increase in 2015. Production of global light vehicles is expected to continue to rise in the next two years, but the growth rate will drop significantly. Among them, Europe will maintain a low level, Japan will decline, the North American Free Trade Area will grow moderately, and China remains the only major growth driver. In addition, OEMs facing increasing profit pressures have begun to cut additional costs, which has increased friction between OEMs and suppliers. Therefore, the report predicts that suppliers will slow down in the short-term growth based on maintaining a high level of profit margin, and the downside risks outweigh the opportunities.
Roland Berger believes that due to the further impact of end-customer demand transfer to Asia, raw material suppliers' downstream expansion, and currency and capital market fluctuations, the uncertainties faced by auto parts suppliers will increase in the future, and the industrial structure will Fundamental changes have occurred and will redistribute the benefits of products and sectors. For auto parts suppliers, this environment will create more opportunities and risks.
In terms of cases, the profit margin of Chinese suppliers still has a leading edge, but due to fierce competition, its profit level is gradually decreasing. In the next few years, China will remain the largest market for automotive end-users, and Chinese customers' demand for entry-level vehicles will increase significantly, challenging the quality and technology of local OEMs and the cost of Western OEMs. In the long run, two or three competitive Chinese Tier 1 suppliers will appear among the top 30 suppliers in the world. As the number one automobile production base in China, the gap between local suppliers and their peers in related fields in the world is gradually narrowing.
The report suggests that suppliers should seize the next wave of efficiency gains 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 industry shifts and mitigate the risks associated with the medium to long term.
In the short run, suppliers should improve their intelligence efficiency; increase or maintain the flexibility of the entire value chain in production, R&D and procurement; stimulate the initiative of key resources to ensure that they can join possible working groups at any time; strictly manage investment decisions. And one-time costs; carefully monitor the market development and signals that the market may decline.
In terms of long-term actions, suppliers should maintain or improve their unique sales propositions, highlighting clear technical or process differences; focus on product areas with higher-than-average growth rates and profit potential, and actively utilize M&A opportunities; It also balances regional share and customer share from the perspective of value creation; establishes optimal processes and structures, maintains flexibility and efficiency in a more complex global layout; applies scenario simulation techniques to regularly review and adjust previously developed strategies.
Food Additives,Food Preservatives,Food Additives Examples,Emulsifiers In Food
Wuxi Volksky New Materials Co.,Ltd. , https://www.volkskychem.com