Automotive Snapshot – October 2021

The supply crisis for semiconductors is leading to declining production figures for auto and commercial vehicle manufacturers worldwide. According to IHS Markit and LMC Auto, the supply shortage, particularly for semiconductors, will continue at least into the first half of 2022. The latest revised forecasts paint a challenging and volatile picture in the coming quarters, especially for European automotive companies.

FalkenSteg’s Automotive Snapshot summarizes the market atmosphere and provides decision makers with data-driven and practical insights on the background and extent of the current crisis.

The automotive supply industry is undergoing a historically challenging transformation process towards alternative drive technologies, new mobility concepts and ultimately new business models. In a nexus with historically weak profitability and simultaneously high debt levels, the current erosion of call-offs might prove to be just one crisis too many.

Consequently, the pressure to consolidate will continue to rise. The key question is whether buyers can still be found for ailing or insolvent automotive suppliers in the current market environment. As shown over the past few months, many M&A processes are failing and insolvent automotive suppliers are now threatened with breakup or even liquidation in severe cases.