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Auto suppliers will have to cut sales by a quarter by 2020, PwC study shows

2020-08-31T12:22:33.770Z


As early as 2019, sales and profits of the German auto suppliers decreased, as the consultants from PwC determined. The corona crisis exacerbates the situation of Continental and Co., the experts predict a drastic drop in sales.


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Employees in a ZF Friedrichshafen plant: the company from Baden-Württemberg was the third largest automotive supplier in Germany in 2019

Photo: Felix Kästle / dpa

According to a study, the suppliers that are important to the German auto industry are at risk of significant losses this year. The consulting firm PwC is assuming a global decline in sales of large companies in the industry by 13 to 24 percent - depending on the further development of the corona pandemic. Even at the beginning of 2020, the starting conditions were not easy after a difficult year 2019 for many companies. Now German suppliers are also coming under increased cost pressure: "The current crisis acts like a magnifying glass."

According to the industry observers, a number of companies will not be able to avoid taking a tough austerity course. "After the German supplier industry has shown continuous growth over several years, it is now clear how many companies actually need restructuring", explained the author of the analysis, Henning Rennert. At Continental, among others, but also at numerous competitors, cuts are being made. Conti boss Elmar Degenhart (61) spoke in June of the biggest car market crisis since the 1930s and feared a possible series of bankruptcies.

An exclusive study for manager magazin also showed in July that the pre-crisis level in the entire automotive industry will probably only be reached in the third quarter of 2023. McKinsey consultants therefore advise auto managers to invest more in alternative drives, make supply chains more robust and cut costs in order to support profitability in a reduced market volume. Online sales must also be significantly strengthened.

PwC has now evaluated the situation of 83 major suppliers from various countries. In the case of the German representatives, sales in the previous year fell by two to a total of 223 billion euros compared to 2018, although their share of the world market increased slightly by one percentage point to 25 percent.

Bosch remains the largest German automotive supplier

more on the subject

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  • Share collapses: Schaeffler plans capital increase

  • Auto supplier again at a loss: Leoni cannot find a way out of the crisis

  • Impending bankruptcies: Fear of the big wave of bankruptcies By Simon Book, Martin Hesse, Michael Sauga and Gerald Traufetter, DER SPIEGEL

Not only the pure business volume but also the profitability decreased in 2019. From a turnover of 100 euros, the German companies examined left an average of just 2.60 euros in profit - in the previous year it was at least 6.30 euros. In other regions, the industry was able to maintain a higher level of earnings. In 2020, a number of companies are expecting red numbers as a result of Corona.

In terms of sales, Bosch defended its position as the largest German automotive supplier in 2019 with 77.7 billion euros - ahead of Continental with 44.5 billion euros and ZF Friedrichshafen with 36.5 billion euros. Schaeffler (14.4 billion), Mahle (12.1 billion) and Hella (6.6 billion) followed in the other ranks.

Conti and the cable and wiring system manufacturer Leoni had already posted losses in 2019, but also because of conversion costs and special factors. The industry association VDA stated that six out of ten suppliers are considering stepping up staff cuts.

Lower Saxony's prime minister and VW supervisor Stephan Weil (61, SPD) recently warned that the consequences of the coronavirus are likely to affect smaller suppliers in particular, who are already under pressure from the change to e-drives and digitization: "I fear that we will we will have to prepare for a lot of bad news by autumn, this is a topic that will keep us busy. "

mg / dpa-afx

Source: spiegel

All news articles on 2020-08-31

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