Germany’s automotive suppliers are feeling the effects of international competition. According to a study, they are losing more and more shares in the world market. More innovative power could help.
According to an industry study, German automotive suppliers are falling behind in international competition and are losing global market share. With an average sales growth of 13 percent last year, “they bring up the rear globally, far behind the rest of Europe (21 percent), Asia (23 percent) and America (25 percent)”, said management consultancy PwC. They also came last in terms of profit margin.
Since 2019, German automotive suppliers have lost 2.7 percentage points of world market share – “as much as they were previously able to laboriously gain in 20 years,” wrote the industry experts. In the race for future technologies and future profits, Asian competitors are in a strong position. Two South Korean battery manufacturers made it into the top 30 right away, the Chinese battery manufacturer CATL is already in second place in the ranking, ahead of the Japanese supplier Denso, Hyundai Mobis and ZF Friedrichshafen. Robert Bosch maintained the top spot.
Crises overcome – innovation required
Worldwide, the industry is building on the successful times before the past crises in terms of sales. But because they could hardly pass the increased costs on to the car manufacturers, profit margins fell. In terms of profit share from sales before interest and taxes (EBIT margin), the German suppliers came last at 3.9 percent in the PwC comparison.
At almost 16 billion euros, they are “investing more than ever in research and development” and are also at the top in absolute terms. “In order for these investments to bear fruit, however, they should gear their technology development even more closely to market needs and the competitive situation, instead of chasing long-established trends such as in the battery business,” said study author Henning Rennert. In order to “catch up, the former top dogs have to drive real innovations again, achieve economies of scale and quickly develop new growth strategies.”