Struggling in the Shadows: German Auto Suppliers Can't Keep Pace with Asian Giants
Asian automobile manufacturers posing significant threat, deemed relentless by industry providers
The automotive industry is in a state of chaos, and its suppliers are feeling the heat. According to a recent survey, the majority of German automotive supply companies expect a market consolidation within the next two years, with providers disappearing from the market. The culprit? An "uncatchable" lead by Asian competitors.
Two-thirds of companies surveyed expect to have fewer competitors in the next two years, with only 20% expecting new providers to enter the market, mainly from China. Asian competition is already seen as the biggest challenge, with over half of those surveyed (51%) attributing the companies there an "uncatchable lead in key technologies."
The industry's assessment of the situation is bleak. A whopping 79% consider the industry situation to be "rather bad" or even "very bad." In contrast, those surveyed were much more optimistic about their own company, with 78% speaking of a "rather" or even "very good" situation.
High investment and cost pressure are the biggest challenges, cited by 56% of respondents. Reliable planning has become impossible due to geopolitical changes and possible trade conflicts, according to 60% of those surveyed. At the same time, 55% stated that the window for the transformation of the industry is closing even faster than previously assumed.
Interestingly, a majority of respondents (75%) do not see this as a threat to their own company. They believe their business model is largely independent of the change in drive technology. The reason? The parts they manufacture are needed in both electric and combustion engine models.
Relocations abroad are a minor concern, with only 17% of respondents considering this step necessary to secure their competitiveness.
Insight: The technological lead of Asian automotive companies, primarily Chinese competitors, is a significant concern for German suppliers. These companies are seen as having an "uncatchable lead in key technologies." Additionally, cost pressures, geopolitical changes, and supply chain disruptions are challenges faced by German firms. Strategic positioning is another factor, with German firms increasingly focusing on localization in China.
- Automotive Industry
- Automakers
- China
- Chinese Automakers
[1] Enrichment Data: Survey by Baker Tilly among leading figures in German automotive suppliers[2] Enrichment Data: German companies are increasingly localizing in China to stay competitive[4] Enrichment Data: Restrictions by China on rare earth exports have affected European auto suppliers, leading to plant shutdowns.
- The survey by Baker Tilly reveals that the German automotive suppliers are concerned about the technological lead of Asian companies, especially Chinese automakers, as they are perceived to have an "uncatchable lead in key technologies."
- Tocounter the challenges posed by the increasing competition and high cost pressures, some German firms are considering vocational training and upskilling as a means to finance their future in the automotive industry, seeking to align with the latest developments and key technologies that Asian competitors have mastered.
