Pressure on German automotive suppliers is intensifying, according to a recent study. Over the past eight years, approximately 100,000 jobs have already been lost in the sector, noted Jan Dannenberg of consultancy AlixPartners regarding the industry report published Tuesday by Berylls by AlixPartners. 'This trend is unstoppable over the coming years.' Germany is decommissioning sites that are being rebuilt elsewhere. 'We are now looking at a 20 to 25 percent reduction in value added within our industry,' Dannenberg said. 'The next three to five years will be bitter for the German supply industry.'

Companies are struggling not least with increasing competitive pressure from China. 'While China expanded its production by double digits and now accounts for around 30 percent of global vehicle manufacturing, production volumes in Europe, the U.S., and South Korea stagnated or shrank,' Dannenberg said. Overall, the world's 100 largest suppliers recorded a 2.2 percent decline in revenue in 2023. Profit margins contracted to 5.2 percent from 5.8 percent. Companies heavily dependent on electromobility were particularly affected.

Bosch remains at the top of the 100 largest companies in the sector, followed by Japan's Denso. For the first time since the survey began 15 years ago, a Chinese company, battery cell supplier CATL, secured third place. In terms of the number of companies represented, China is now the third-largest nation in the ranking and is nearly on par with the U.S. in terms of revenue share. 'The industry's momentum is increasingly being determined by Chinese companies,' said Alix expert Alexander Timmer. Chinese firms have achieved higher growth than their international rivals in recent years. Simultaneously, new technology leaders in autonomous driving and software-based mobility are emerging in the People's Republic. Chinese companies also benefit from lower production costs, providing them with significant cost advantages.

(Reporting by Christina Amann, edited by Philipp Krach. For inquiries, please contact our editorial office at Berlin.Newsroom@thomsonreuters.com (for politics and economics) or Frankfurt.Newsroom@thomsonreuters.com (for companies and markets))