1、Global Automotive Supplier Study 2025REPORTStagformation:Trends,outlook,and recommendations to navigate stagnation and transformationThe global automotive supplier industry is facing a challenging market landscape,clouded by stagnating growth,geopolitical uncertainty,rising competition,and mounting

2、cost pressures from prolonged technological transformations.In essence,what we currently observe in the automotive supplier industry can be aptly described as a period of stagformation,where stagnating volume growth is coupled with the urgent need to transform established business models.The financi

3、al performance of automotive suppliers reflects this challenging sentiment,with EBIT margins remaining 2 percentage points below pre-Covid levels.While there was a temporary stabilization in 2023,forecasts indicate a further decline in 2024,with industry averages expected to drop to 4.7%.We expect p

4、rofitability challenges to persist and likely intensify in the coming years,driven by five key trends:1)stagnating global sales volume,2)slower adoption of battery electric vehicles(BEVs),3)rising software costs and increasing customer demand for advanced driver assistance systems(ADAS)and connectiv

5、ity features,4)swelling economic and competitive pressures in China,and 5)resurging geopolitical tensions and global trade barriers.To remain competitive in todays dynamic automotive landscape and prepare for the future,we recommend suppliers optimize their portfolios through partnerships,streamline

6、 their product offerings,and focus on strategic technologies.Western suppliers must prioritize structural cost improvements to stay competitive amid rising pressure from Chinese players.Technology and cost leaders should focus on strategic,well-executed expansion to sustain their advantage.Given the