Skip to main content
Sister Publication Links
  • European Rubber Journal
  • Plastics News
  • Tire Business
web
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Automotive
    • Tire
    • Non-Tire
    • Suppliers
    • Silicone
    • Latex
    • Coronavirus
    • Executive Action
    • Government/Legal
    • Opinion
    • Technical Notebooks
    • Women in Tire & Rubber
    • ITEC
    • International Elastomer Show
    • HEXPOL Sponsored Content
    • Failed takeover by Apollo a distant memory for Cooper
      Smithers opens driver, equipment testing center in Michigan
      Trelleborg divests U.K. offshore oil and gas operation
      Myers Industries raising prices citing material costs
    • Failed takeover by Apollo a distant memory for Cooper
      Smithers opens driver, equipment testing center in Michigan
      Trelleborg divests U.K. offshore oil and gas operation
      Myers Industries raising prices citing material costs
    • Trelleborg divests U.K. offshore oil and gas operation
      Myers Industries raising prices citing material costs
      Richard F. Grossman dies at 86
      ARPM readies for 2021 Environmental Health and Safety Summit
    • Arburg publishes its first sustainability report online
      Goldsmith & Eggleton introduces raw materials handling line
      Hexpol acquires Spanish wire and cable compounder
      New Products: Mahr Inc. introduces MarForm MMQ 500 Form Tester
    • New legacy taking shape at Stockwell Elastomerics
      Fenner opens new textile treatment line in Pennsylvania
      Stockwell Elastomerics' legacy moves on
      Larger mixers tout economies of scale, along with the need for speed
    • Ohio firm focuses on making better masks in U.S.
      U.S. to increase NBR, make gloves using Defense Production Act
      Tire Cologne canceled; rescheduled for 2022
      Tire Technology Expo canceled for 2021
    • New legacy taking shape at Stockwell Elastomerics
      Davis-Standard promotes Andrew Alaya to aftermarket sales role
      Harwick Standard adds Flores to West Coast sales team
      GM promotes Siemen to lead sustainability; Parker to retire
    • To boost U.S. microchip production, Biden administration must find supply chains weaknesses
      TIA among associations against increase to minimum wage
      9 Goodyear-Cooper Tire stories you may have missed
      Cooper recalling 430,000+ whitewall LT tires in multiple brands
    • New legacy taking shape at Stockwell Elastomerics
      Column: Discussions of race, equality may mean uncomfortable moments
      Column: Business trips possible because of essential workers
      Editorial: Associations see opportunity for progress under new administration
    • Studying RPA ASTM methods for detecting compound quality differences
      Damage mechanism in oil and gas formulations during downhole testing
      Advancements in synchronous drive belt design for industrial and consumer markets
      Effects of multiple repurposed materials for reinforcements of standard rubber compounds
    • Rubber Division introduces WORD webinar series
      WORD panelists say evolution, authenticity keys to success
      New video celebrates women in rubber industry
      ITEC panelists say women can thrive in tire industry
    • Goodyear recognized by Lockheed Martin as 'elite supplier'
      EV tire advancements to help secure future
      Lambillotte: Only question on AVs is timing
      CAR official says EV future brighter than autonomous
    • Rubber Division introduces WORD webinar series
      Rubber Division seeks abstracts for 200th Technical Meeting
      WORD panelists say evolution, authenticity keys to success
      IEC keynote: Communication key to logistics
    • Sponsored By HEXPOL Compounding
      Faster Access to Your Polymer Compounding Experts Around the World
      Sponsored By HEXPOL Compounding
      Take a walk thru a HEXPOL Lab
      Sponsored By HEXPOL Compounding
      HEXPOL offers a unique selection of High Performance Elastomers to match your application requirements
      Sponsored By HEXPOL Compounding
      It’s what you can’t see that makes the Difference at HEXPOL
  • Blogs
    • Products
    • Wacky World of Rubber
    • New Products: Mahr Inc. introduces MarForm MMQ 500 Form Tester
      New Products: Starrett expands field-of-view for multi-sensor vision system
      New Products: Nova thinks outside the box with sealing tech
      New Products: MonTech introduces 1,500 kN lab press
    • Wacky World of Rubber: How Trelleborg, teens sealed a spot in the world record book
      Wacky World of Rubber: Of chicken and feet, but not chicken feet
      Wacky World of Rubber: Time to go mattress shopping
      Wacky World of Rubber: Because nothing says football like 'frunk' shrimp
  • Newsletters
    • Rubber in Automotive
    • Silicone News
    • Latex News
    • Sign Up for Newsletters
    • Failed takeover by Apollo a distant memory for Cooper
      Smithers opens driver, equipment testing center in Michigan
      Trelleborg divests U.K. offshore oil and gas operation
      Myers Industries raising prices citing material costs
    • New legacy taking shape at Stockwell Elastomerics
      Fenner opens new textile treatment line in Pennsylvania
      Stockwell Elastomerics' legacy moves on
      Larger mixers tout economies of scale, along with the need for speed
    • Sri Trang Gloves starts major capacity expansion
      Synthomer dismisses takeover reports
      Combined Goodyear-Cooper Tire company has tire technology, sustainability edge
      Helixtap launches new digital marketplace for rubber
  • Multimedia
    • Videos
    • Photo Galleries
  • Directory
  • Resources
    • Classifieds & Mold Mart
    • Sponsored Content
    • White Papers
    • HB Chemical
      Sponsored By HB Chemical
      The HB Chemical and Ravago Partnership: Taking Customer Service to a New Level
      Sponsored By HB Chemical
      Above and Beyond with HB Chemical
      Sponsored By HB Chemical
      The Company Behind the Inventory
      Sponsored By French Oil Mill Machinery
      Process Improvement, Cost Reduction with Custom Press Systems
    • Sponsored By Uncountable Inc.
      Labs of the Future: How to Choose a Laboratory Information Management System in 2021
      Sponsored By Uncountable Inc.
      Cooper Standard deploys lab informatics platform to synchronize R&D
      Sponsored By Elkem
      LSR Selectâ„¢: A solution to improve your financial impact in molding applications
      Sponsored By HEXPOL Compounding
      Peroxide Cureable Silicone Injection Molding
  • Data
  • Events
    • RPN Events
    • RPN Livestreams/Webinars
    • Industry Events
    • Past Events
    • ITEC Library
    • International Silicone Conference Library
    • 2021 Healthcare Elastomers Virtual Edition
      2021 Rubber in Automotive Virtual Edition
      2021 International Latex Conference Virtual Edition
      2022 ITEC
  • Advertise
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. Automotive
July 01, 2020 10:53 AM

Auto suppliers ranking holds steady despite pandemic, challenges

Alexa St. John
Automotive News
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    The world's biggest auto parts suppliers have their hands full this year. But for many of them, the challenges were already piling up in 2019.

    Well before the coronavirus pandemic brought down global vehicle production in March and turned suppliers' operations upside-down, the parts industry was taking it in the gut over a steep business decline in China, a protracted labor strike at General Motors and a fraught reordering of product plans in Europe where regulators are clamping down on the production of traditional CO2-emitting vehicles.

    But even as parts makers navigated those market potholes last year, they managed to remain in much the same competitive ranking as they have for the past two years, according to this year's Automotive News' top supplier ranking of the industry's largest parts companies.

    Bosch, Denso, Magna, Continental and ZF Friedrichshafen remain the world's five biggest suppliers, as they have for the last two years. Of the top 10, only two—Lear Corp. and Faurecia—changed rankings last year. They swapped positions on the list, with Faurecia now No. 8 and Lear No. 9.

    "Last year we really were at the back end of a long, strong growth cycle for the automotive industry," said Dietmar Ostermann, U.S. automotive advisory leader at PwC, which tracks global automotive activity globally.

    And all of last year's challenges compound the struggles suppliers now face as they tread water from pandemic-induced liquidity issues and parts shortages, he said.

    "It blows enormous holes into those auto suppliers, and some of them will not make it," Ostermann said.

    The results

    The industry's suppliers examined their roles in electrification and autonomy last year as they looked toward the future.

    "Clearly the transition of the industry and refocus of the industry started to really gain momentum and speed outside of the industry," said Jeff Schuster, LMC Automotive president of the Americas and global vehicle forecasting. "That left a lot of suppliers questioning the longevity of their business. If they were focused in the space of ICE, they're scrambling to try to transition or expand or refocus while not knowing when the market will actually flip."

    Several suppliers considered significant investments in electrification, vehicle light-weighting, connected-car activity and anything related to autonomous driving last year, Ostermann said.

    They seemed to place their biggest bets in electrification and self-driving commercial vehicles.

    Dana Inc., the Toledo, Ohio-based producer of transmissions and axles, completed its acquisition of Nordresa Motors Inc. in 2019 to gain additional capabilities in electrified powertrain systems. Last year, German parts giant ZF Friedrichshafen disclosed plans to acquire trucking brakes supplier Wabco Holdings Inc. ZF expects the acquisition, completed in May, will lead to a better position in self-driving commercial- vehicle development.

    "People were aggressively making acquisitions; some of those probably were riskier than others," Ostermann said. "The riskier acquisitions that were big to swallow hurt those suppliers now."

    In Japan, Honda agreed to merge three affiliated suppliers—Keihin, Showa and Nissin Kogyo—with Hitachi Automotive Systems to create a global megasupplier of electrified vehicle drivetrains, electronic control units and other components.

    "All of this at the same time created microcosms of challenges in various parts of the world," Schuster said, "and I think that's really difficult sitting on top of this need to invest in the future."

    Perfect storm

    Last year presented the perfect storm of megachallenges that put pressure on the supply base in an unprecedented way, Randy Miller, global advanced manufacturing and mobility leader at EY, told Automotive News.

    As a result of troubles in China and Detroit, many suppliers reported sizable declines in revenue.

    Panasonic Automotive Systems Co. sustained a nearly 22 percent decline in total global sales to auto makers in 2019.

    Mexican supplier Nemak, which reported major losses from the UAW strike, took a 15 percent hit to sales, falling six places in the industry ranking to No. 58.

    And Thyssenkrupp fell five places to No. 21 this year after an 18 percent drop in sales.

    On the flip side, some suppliers did relatively well despite the choppy circumstances.

    Delphi Technologies reported a nearly 14 percent boost in sales last year. The South Korean lighting supplier SL Corp. reported a 33 percent increase in sales from the year before.

    Making its debut on the list of top suppliers is Marelli—formed after Fiat Chrysler Automobiles sold its parts unit Magneti Marelli to Japan's Calsonic Kansei in a $6.5 billion deal last year. The combination of the two companies yielded the industry's 14th largest supplier, with total global sales to automakers of $14.94 billion in 2019.

    The gains were all the more remarkable in a year when issues clobbered companies ahead of the even more disruptive pandemic to come.

    The decline in vehicle demand in China knocked sales at Lake Forest, Ill.-based supplier Tenneco, slashed full-year production forecasts for Garrett Motion and largely was responsible for slowed sales growth in the first half of the year for ZF.

    The lengthy GM UAW strike hurt several suppliers. The interruption took $57 million out of third-quarter sales at Detroit-based driveline and drivetrain supplier American Axle & Manufacturing Holdings Inc.; dropped Nemak's third-quarter earnings and total revenue by 13 percent and 16 percent, respectively; and cost Faurecia $25.5 million in the third quarter last year.

    The enormity of stricter emission regulations in China and Europe also hit parts makers. Continental said last fall it was going to start restructuring and cutting as many as 20,000 jobs worldwide, because of European market challenges in particular.

    "The continued emergence and maturity of new business models and alignment around new mobility frameworks—that evolution and the decline in investment in some of those business models—was a big contributor to the challenges," Miller said.

    "When you take the strike into context of the market slowdown that we were seeing at the end of last year, then you also factor in the volatility of the trade agreements in some of the biggest markets, that's when you start to get almost a perfect storm to come together. It puts everybody in an even tougher position with COVID hitting," he said.

    Ostermann observed that last year's challenges will make 2020's all the more troubling for many larger suppliers.

    "They typically would have been in the financial position to survive COVID-19," he said. "If those companies right now are struggling, it is because of fundamental problems they had before."

    Letter
    to the
    Editor

    Rubber & Plastics News wants to hear from its readers. If you want to express your opinion on a story or issue, email your letter to Editor Bruce Meyer at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Get our newsletters

    Staying current is easy with Rubber & Plastics News delivered straight to your inbox, free of charge.

    Subscribe Today

    Subscribe to Rubber & Plastics News to get the best coverage and leading insights in the industry.

    SUBSCRIBE
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter

    MISSION

    To serve companies in the global rubber product industry by delivering news, industry insights, opinions and technical information.

    web
    Contact Us

    2291 Riverfront Pkwy, Suite 1000
    Cuyahoga Falls,
    OH 44221

    Customer Service:
    877-320-1726

    Resources
    • About Us
    • Digital Edition
    • Contact the Staff
    • Advertise
    • Order Reprints
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Careers
    • Ad Choices Ad Choices
    • Sitemap
    Partner Sites
    • Tire Business
    • European Rubber Journal
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    • Automotive News
    • Crain Brands
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Automotive
      • Tire
      • Non-Tire
      • Suppliers
      • Silicone
      • Latex
      • Coronavirus
      • Executive Action
      • Government/Legal
      • Opinion
      • Technical Notebooks
      • Women in Tire & Rubber
      • ITEC
      • International Elastomer Show
      • HEXPOL Sponsored Content
    • Blogs
      • Products
      • Wacky World of Rubber
    • Newsletters
      • Rubber in Automotive
      • Silicone News
      • Latex News
      • Sign Up for Newsletters
    • Multimedia
      • Videos
      • Photo Galleries
    • Directory
    • Resources
      • Classifieds & Mold Mart
      • Sponsored Content
      • White Papers
    • Data
    • Events
      • RPN Events
      • RPN Livestreams/Webinars
      • Industry Events
      • Past Events
      • ITEC Library
      • International Silicone Conference Library
    • Advertise
    • DIGITAL EDITION