CSCMP's Supply Chain Quarterly
December 14, 2017
Supply Chain Executive Insight E-Newsletter
Each week the Supply Chain Executive Insight e-newsletter will include brief articles about developments that are often overlooked by other supply chain publications. We will present you with summaries of the latest research as well as new ideas on how to make your supply chain operations more effective. And we'll offer commentary that sheds light on what's happening in supply chains today.
Sign up now!

Most Read Articles

News from our sister publication
DC Velocity
Forward Thinking

Auto suppliers are headed for a shakeout

Asian and European auto suppliers are likely to take over their distressed counterparts as that industry undergoes consolidation, according to the results of a study consulting firm PRTM.

Asian and European auto suppliers are likely to take over their distressed counterparts as that industry undergoes consolidation, according to the results of a study of more than 350 automotive suppliers conducted by the consulting firm PRTM of Waltham, Massachusetts, USA. PRTM singled out China's Guangzhou Automotive Components and Weichai Power Company as leading suppliers in the auto industry that are well positioned to buy suppliers in other countries. Others topping the list of companies that are likely to buy up competitors include large, successful auto-parts suppliers in Japan and Europe.

PRTM said that the greatest number of bankruptcies and buyouts is likely to occur among suppliers of chassis and electrical and electronics systems. The report pointed out that chassis systems, which include brakes, steering, axles, and suspensions, require considerable capital to produce, hence any drop-off in order volumes quickly affects those suppliers' profitability. Dietmar Osterman, global lead director of PRTM's automotive industry practice, said that pressure for mergers and acquisitions will be especially strong for the more than 120 chassis suppliers worldwide, as this segment has a number of strong buyers as well as very weak companies. As for makers of automotive electronics, this segment represents the "future of the vehicle industry," and many suppliers will want to buy a company in that area to add such capabilities to their businesses, he said.

Only one U.S company made PRTM's list of the 10 top global suppliers. Glass and paint manufacturer PPG of Pittsburgh, Pennsylvania, was placed on the list because it is highly diversified in other industry sectors besides automotive. PRTM predicted that several of the remaining 31 North American auto suppliers will either declare bankruptcy or be acquired.

Source: "Several Chinese Auto Suppliers Likely To Emerge As Leading Global Consolidators, PRTM Study Finds," Press Release, August 2009

Join the Discussion

After you comment, click Post. If you're not already logged in, you will be asked to log in or register.

Want more articles like this? Sign up for a free subscription to Supply Chain Executive Insight, a monthly e-newsletter that provides insights and commentary on supply chain trends and developments. Click here to subscribe.

We Want to Hear From You! We invite you to share your thoughts and opinions about this article by sending an e-mail to ?Subject=Letter to the Editor: Quarter 2009: Auto suppliers are headed for a shakeout"> . We will publish selected readers' comments in future issues of CSCMP's Supply Chain Quarterly. Correspondence may be edited for clarity or for length.

Want more articles like this? Subscribe to CSCMP's Supply Chain Quarterly.