2023-08-24 11:59:22
International competition is shrinking German car suppliers’ market shares
Germany’s ARD news network reported Thursday that auto parts suppliers in Germany are losing more shares in the global market. It quoted an industry study by PricewaterhouseCoopers, a management consultancy, that with an average sales growth of 13% last year, German auto parts suppliers rank last in the world, far behind the rest of Europe (21%), Asia (23%) and America (25%). ), and they are in last place in terms of profit margin.
The study quoted experts that since 2019, suppliers have lost 2.7 percentage points of their global market share, the same amount they had been able to hard-earn in 20 years. In the race for future technologies and profits, Asian competitors are in a strong position, with two South Korean battery manufacturers making it into the top 30, while Chinese battery company CITL is second in the rankings, ahead of suppliers. Japanese like Denso and Hyundai.
Around the world, the industry is building on successful times before crises past in terms of sales, but because suppliers have been unable to pass the increased costs on to automakers, profit margins have fallen.
In terms of share of EBITDA (earnings before interest, taxes, depreciation and amortization margin), German suppliers came last with 3.9 percent in the consulting firm’s comparison.
On the other hand, ARD indicated that to overcome crises, the power of innovation can help in that, and highlighted the author of the study, Hennig Reinert, that in order for investments to bear fruit, they must direct their technological development more closely towards market needs and the competitive situation, rather than Catch up with well-established trends as in the field of batteries.
Accordingly, major companies must once once more lead innovations, achieve savings and develop new growth strategies quickly, indicating that German suppliers are currently investing more than ever in research and development, with a value of approximately 16 billion euros.
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