When it comes to profit margins, Asian companies are at the forefront. But it doesn’t always have to be high-tech.
Bosch, ZF and other German companies occupy top positions among the world’s largest automotive suppliers. However, in a ranking of the suppliers with the highest sales based on profitability last year, the management consultancy Berylls sees three semiconductor companies by far in the lead: the Japanese company Renesas, the Swiss group ST Microelectronics and the Munich-based chip manufacturer Infineon with operating profit margins of well over 25 percent of sales.
This is due to the excess demand caused by the increasing importance of software, wrote the industry experts. “However, the figures for 2024 do not look quite so rosy”: Chip manufacturers have expanded their production capacities and are now facing a sluggish auto economy; demand for semiconductors and processors has collapsed. For 2024 and 2025, “significantly lower, but still above-average margins are to be expected.”
Asian companies particularly profitable
According to Berylls, half of the 25 most profitable suppliers are Asian companies. “It is not necessarily high-tech that helps them make big profits. Chinese suppliers in particular are convincing with traditional products such as tires (Sailun), glass (Fuyao) and parts for combustion engines (Weichai Power).” Only two German companies are among the top 25: Infineon and the Munich-based brake manufacturer Knorr-Bremse.
A quarter of the most profitable suppliers are tire manufacturers: Hankook, Toyo, Sailun, Pirelli, Bridgestone and Michelin sell their products not only to car manufacturers, but also directly to car drivers as end customers. “With the B2C business, they have a trump card in their hand that other suppliers do not have.”
Source: Stern
