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1、An integrated response gives suppliers the resilience to address the urgent pressures facing the automotive industry.By Pedro Correa,Dominik Foucar,Klaus Kremers,Klaus Stricker,Tom Wendt,and Ping YiHow Auto Suppliers Can Navigate the Industrys Perfect StormCopyright 2022 Bain&Company,Inc.All rights
2、reserved.AcknowledgmentsThe authors are grateful for the support Ingo Stein provided to this study.1How Auto Suppliers Can Navigate the Industrys Perfect StormAt a Glance Auto suppliers must further transform their cost structures amid downturns,rising interest rates,and surging inflation.Increasing
3、 flexibility is a key success factor in times of high and continued uncertainty.At the same time,suppliers need to deal with the seismic and permanent changes reshaping the auto industry.To survive,an integrated response fusing cost reduction,commercial excellence,and the right portfolio strategy is
4、 needed.Automotive suppliers profit margins are under extreme pressure after more than two years of stop-go production and little flexibility from original equipment manufacturers(OEMs)on pricing.Volatility has become the norm in the face of continued supply-chain challenges,record-high material and
5、 energy costs causing soaring inflation,and growing geopolitical tensions.As a result,many companies in the sector are in a significantly weakened position.Many are also highly leveraged,particularly among midsize suppliers.With interest rates rising and banks more reluctant to lend to an already hi
6、ghly geared industry in so much flux,auto suppliers face being further squeezed by higher borrowing costs.At the same time,sales volumes remain volatile and will be impacted by downturns in several geographies.Pressure to invest in expensive and unfamiliar new technologies for the future is also inc