The weak demand for electric cars is causing problems for the automotive industry. Suppliers are also increasingly suffering. This could have consequences.
The weak demand for electric cars is also increasingly becoming a problem for suppliers. In some cases, manufacturers are purchasing up to 50 percent fewer electric vehicle components than previously promised, according to a survey by the Horváth management consultancy among 50 automotive suppliers, including 35 from Germany. This is putting the companies under pressure. In order to reduce costs, 60 percent of the suppliers surveyed in Germany are planning moderate job cuts.
“The economic situation has deteriorated significantly for many suppliers and is putting some companies under increasing pressure,” says Frank Göller, partner and automotive expert at Horváth. “The switch to modules and components for electric vehicles requires considerable investment and many suppliers are suffering large losses in sales and earnings due to reduced demand.” Due to the tense situation, further mergers or takeovers are to be expected among automotive suppliers.
For the study, management consultancy Horváth interviewed industry executives in one-on-one interviews last quarter.
According to the Association of the Automotive Industry (VDA), a total of 273,500 people were employed in the German supplier industry in 2023.
Source: Stern
