Change coming for auto suppliers

Electric vehicles and autonomous driving are expected to revolutionize the automotive industry in coming years, but what will the impact be for parts suppliers?

The Roland Berger consulting firm sees changes in what it takes to make a vehicle, as well as which companies will be supplying those parts, in its Global Automotive Supplier Study 2016. Collaborating with the Lazard financial services firm, more than 600 suppliers around the world were examined. Here are some highlights:

• Tire makers have seen the biggest increases in profitability since 2007, while powertrain suppliers saw profits fall.
• Profit margins for parts suppliers based in Europe and the NAFTA region currently are above average, while Japanese and Korean suppliers are below.
• Light vehicle sales are expected to remain flat in the NAFTA region through 2018, but grow by 12 percent in Russia and India.
• The automotive parts market is expected to grow from 700 billion euros in 2015 to more than 850 billion euros in 2025.
• The demand for parts related to assisted or autonomous driving is expected to grow by 500 percent over the next decade.
• The market for electric vehicles could grow 700-1000 percent over the next decade.
• Changes in automotive technology will shake up supplier dynamics, with companies from Apple to Uber gaining leverage.
• Global economic uncertainty – everything from Brexit to the lifting of sanctions on Iran – is expected to create volatility in the automotive parts market.