hat was expected to be a year of recovery from the Covid-19 crisis  turned out to be the year of semiconductor shortages and supply  chain problems. At the end, the ongoing frictions in the markets have  eradicated five years of growth for the global automotive supplier  industry. And 2022 is also a challenging year for suppliers, according  to a new study by Roland Berger and Lazard. In this first part of a threepart series, we detail the mounting pressures and financial health of  the industry.

Starting with the Covid-19 pandemic, the automotive industry is going  into the third consecutive crisis year with an above-average financial  burden, especially for traditional automotive suppliers. With the  semiconductor shortages, the war in Ukraine, and subsequently  skyrocketing raw material prices and factor cost increases, multiple  additional short-term challenges came on top of the pandemic  aftereffects. Especially Europe as a market is facing structural problems  and will most likely not have seen pre-crisis volumes by the end of the  decade.

While electronics suppliers and aftermarket players could outpace  their peers in terms of profitability, the majority of traditional players  face deteriorating margins in this environment. In the light of these  effects, also 2022, 2023 and most likely even 2024 will stay or be difficult  for automotive suppliers.

Taking actual inflation into account, also refinancing for automotive  suppliers will become much more difficult. Central banks are fighting  the development with increasing interest rates, making capital more  expensive in a time where it is most needed to finance technological  change.

W