The industry's outlook may be brightening, but for many parts makers, it's still a dark time of perilous finance and strategic rethinking.
Even as car dealers scramble to meet new demand, several global suppliers are struggling with deflated profit margins resulting from a disastrous 2020 and the pandemic-caused crash in vehicle production.
Dire earnings reports this summer have prompted some suppliers to sell off operations, rethink strategies and even seek bankruptcy protection. And there's much more coming. The global industry likely will see 50 to 100 additional supplier bankruptcies in the next six to nine months, forecasts Dietmar Ostermann, U.S. automotive advisory leader for PwC.
"The ramp-up has gone well, but the bankruptcies are not done yet," Ostermann told Automotive News last week as he drove away from a supplier visit. Crisis support from lenders and governments? "That's over now. The banks are tightening back up, and a lot of suppliers are still not in good shape. Many of them are loaded up in debt when they need cash. Certainly, some plants will close."