In many respects, the automotive supplier landscape is undergoing the same massive disruption as the industry Itself. Brought about in large part by new technologies that are affecting everything from the plant floor to the customer experience, connectivity, autonomy, share mobility and electrification (CASE)—enabled by the cloud, 5G, analytics and other technologies—are creating new opportunities for traditional suppliers, attracting nontraditional suppliers and serving as a catalyst for mergers and acquisitions, joint ventures, partnerships, divestitures, spinoffs and more. The result is an increasingly competitive environment where savvy suppliers may have an opportunity to create a strategic advantage, while those caught flat-footed may not survive.
Previous articles in this series, developed in a partnership between FTI Consulting (FTI) and the Automotive News Data Center, examined the financial performance between 2010 and 2019 of 404 suppliers and explored how financial discipline and investments in innovation affect long-term growth and profitability. FTI segmented the companies analyzed into four categories: Performers, with above-average revenue and EBITDA growth; Defenders, with above-average EBITDA growth; Growers, with above-average revenue growth; and Contenders, with below-average revenue and EBITDA growth.
This last article explores the evolving automotive value chain and how M&A, divestitures, strategic partnerships and consolidation might help create a competitive advantage for companies wherever they fall in FTI’s analysis.