For the new Oliver Wyman study “The supplier industry caught between cost pressure and value growth,” a worldwide survey of managing directors and board members at leading automotive supplier companies was conducted in the first half of 2010. The survey results show that cost pressures in the industry will intensify further in future years and that functional innovations can play only a very limited role in offsetting this trend toward loss of value. The only recourse that suppliers have to generate long-term value gains and profitable growth is global growth in volume following the crisis – particularly in emerging automotive markets. In the highly competitive supplier market, the only companies achieving sustainable success will be those that are internationally focused, are located in emerging markets and generate significant cost downs.
Enormous cost pressure is weighing on the entire automotive industry. Suppliers, responsible for more than 50 percent of value creation, are feeling most of this pressure.