An Analysis Of The Top 100 Automotive Suppliers

Louise Smyth

An analysis by Berylls Strategy Advisors of the ‘Top 100’ automotive suppliers shows an industry undergoing dramatic change in times of severe economic challenges. But the research also shows certain sectors of the supply industry coping far better than others – for some very clear reasons.

Each year, Berylls, the international automotive management consultancy, lists the 100 largest automotive suppliers worldwide and identifies the risers and fallers in terms of revenue and profitability. The research offers an appraisal of the global automotive supply industry.

Automotive Supply Chain Trends

“Despite an impulsive US trade policy, Brexit chaos, and a cooling of the Chinese economy, in 2018 the ‘Top 100’ achieved an average growth in revenue of 7.6% year on year,” explained Dr Jan Dannenberg, a Partner at Berylls, “but profitability was down, pretty well across the board.

“What we find most interesting are the reasons for these automotive supply chain trends – the type of companies who are ‘winning’ and ‘losing’. A key cause of falling margins has been the need to invest heavily in future technologies, and the rapidly widening chasm between traditional ICE (internal combustion engine) industry, and suppliers of CASE (connected, autonomous, shared, electrified) technologies.

“Today, rightly or wrongly, there is a total focus on CASE technologies. Anything that isn’t connected to artificial intelligence, cybersecurity, big data, autonomous driving, blockchain and so on, is barely noticed.”

Here’s a clear-cut example: in 2017/18, start-up WayRay, a manufacturer of holographic augmented reality technologies and user interfaces that employed 50 people with a turnover of $3.5 million, raised a total of $98 million in venture capital. Last year, Proseat (seat cushions, turnover 291 million euros with 2,100 employees) was sold to a Japanese competitor and valued at around 45 million euros. In terms of revenue multiple, the CASE start-up was rated 180 times higher than the traditional supplier. And in Berylls’ Top 100, CATL, the Chinese supplier of lithium-ion batteries, leapt into the Top 100 for the first time at position 71, making it by far the most successful new entrant of 2018.

The other major theme to emerge from the analysis is the advantage that large automotive supplier groups hold over SMEs. This isn’t a new trend, but it’s accelerating.

Automotive Supply Chain Predictions

Dannenberg said, “By the year 2025, Berylls expects 60 per cent of total sales to be accounted for by its Top 100 – i.e. the world’s 100 largest suppliers; today it’s just over 50 per cent. The larger automotive supplier groups are more global, have easier access to capital markets and more competitive cost structures through best-cost-country locations, invest heavily in the development of CASE technologies, or simply buy the skills they need by acquiring companies. To survive as a supplier, small- and medium-sized businesses must remain agile and entrepreneurial, niche-focused and cost-conscious.”

The full report is here.

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