Tier one markets: Violent movement below the surface
Never before have so many cars been sold worldwide as in 2017 – a total of 94.5 million new cars left the assembly lines of OEMs this year (2016: 92,2 million). The strategy consultancy Berylls Strategy Advisors has examined the industry and comes up with interesting figures. The turnover of the top 100 global suppliers increased by 5.8 percent and reached a total value of 835 billion euros. German suppliers continue to occupy a strong position – 18 German companies are among the top 100, all of which were able to increase their sales. Overall, they achieved sales growth of 7.5%, significantly better than the global average of 5.8%. However, the profitability of our American competitors was better than that of their German competitors – US suppliers achieved an average profitability of 10.2 %; the Germans “only” 9.8%.
Bosch remained the undisputed leader with sales of 47.7 billion euros, followed by Continental with 44 billion and Toyota holding Denso with 36.3 billion. The top trio are thus defending their positions from the two previous years. Following the acquisition of TRW Automotive, ZF Friedrichshafen continued to grow and, with sales of 33.5 billion euros, took fourth place, replacing the Canadian-Austrian supplier Magna.
Electronics as the growth booster
The figures show an interesting trend: While sales of the 100 largest tier ones grew by 5.8% between 2015 and 2017, the ten largest OEMs grew by only 2% over the same period: an indication that electronics account for an increasing share of the automotive value chain. According to this finding, a number of semiconductor manufacturers are also represented in the ranking with their respective automotive-related delivery spectrum: NXP ranks 78th with 3.14 billion euros, Infineon (3.054 billion euros) 82nd and Renesas 83rd with 3.022 billion euros.
Not only German suppliers, but also almost the entire European supplier industry have improved their position in the Beryll ranking – with two exceptions. The International Automotive Components Group (IAC), an American manufacturer of interior components headquartered in Luxembourg, slipped by 21 places after substantial parts of the company were contributed to a joint venture with a Chinese partner. The Antolin group had to accept a slight decline and loses a position in the ranking.
US companies more open for disruptive strategies
The group of US suppliers generated total sales of 117.8 billion euros. Berylls observed that many US companies are setting the course for tomorrow’s mobility with great vigour and are divesting themselves of traditional business activities. The market observers highlight the case of the supplier Delphi, which was split into two companies – Aptiv with a focus on future mobility, while Delphi Technologies continues the “old” powertrain activities.
The Korean suppliers were not quite as successful. They had to accept a decline in sales (to a total of 49.3 billion euros) and a shrinking profitability. The only exception was LG Electronics (rank 97). The electronics giant is currently strengthening its expertise in the fields of lighting systems and electronic assemblies. The company recently continued on this course with the takeover of the Austrian lighting specialist ZKW.
China has doubled the number of its suppliers in the top 100 ranking from two so far (Weichai Power, 17th place and Yangfeng Automotive, 32nd place) to four. The casting specialist CITI Dicastal (74th place) and Ningbo Joyson Electronics (75th place) are new.
Related articles:
Infineon intends to regain the lead in automotive chips
French-Japanese axis for e-powertrains launched
How Bosch drives the development of the connected and the electric car
Continental expects changes in business models
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