In February 2021, CLEPA (the European Association of Automotive Suppliers) together with McKinsey & Company questioned the CLEPA members again about the economic situation and outlook. Organized for the 4th time now, this 'Pulse-Check' has become a kind of barometer for the automotive industry. The previous edition dates from September 2020.
We zoom in on the most important conclusions:
- The participants in the latest edition of the survey have a much more positive attitude: in September 2020, 68% of those questioned still had a negative attitude, whereas in February this figure was only 31%. 80% of automotive suppliers even expect an increase in order volumes in the next 12 months.
- Margins will also remain stable in 2021 and higher profitability is even expected in 2022.
The CLEPA Pulse Check also examined two trends, namely the shortage of semiconductors and the transition of the industry.
For the shortage of semiconductors, we noted that:
- More than 60% of the respondents said they would experience negative impacts in one way or another, ranging from necessary supply chain adjustments to a risk of production downtime or commercial consequences (e.g. claims by car manufacturers)
- Increasing production capacity for microelectronics takes a long time - a quick recovery of the situation is therefore not to be expected.
In the survey of the transition, or even disruption, that the automotive industry is currently going through, we conclude that:
- 61% of the respondents expect a shift in profit pools from traditional components to software and electronics. More than 90% of the surveyed suppliers are currently implementing changes to their product portfolio.
- Sales of light duty vehicles (passenger cars and light vans) will not recover fully on a global level, even by 2030 and beyond. Growth in China/rest of Asia will not compensate for stagnating or declining sales in Europe and the USA, forcing suppliers to seek growth outside the automotive industry.
- New vehicle manufacturers such as Nio, BYD, Xpeng and Fisker are seeing a strong increase in their valuation, yet 66% of the suppliers surveyed believe that the new car manufacturers will barely have an impact on their turnover by 2030
- Society's focus on sustainability is increasing, prompting stricter regulations and structural changes. 83% of the suppliers surveyed said they had defined general sustainability objectives, but only 15% had translated these general objectives into a detailed sustainability roadmap. The main difficulty lies in finding the right level of ambition, estimating the costs of decarbonization and putting actions in the right order.