Dear All:
Find time to read the attached article on Can North American auto suppliers create value?
v North America’s auto suppliers are struggling for survival, squeezed by rising costs, blistering competition, declining production volumes, and relentless downward pricing pressure from automakers themselves facing severe business conditions.
v McKinsey research finds that over the next five years, North American suppliers could potentially create value across 60 to 70 percent of a vehicle’s content, in three product segments: those that provide opportunities for significant innovation; those that are consolidated, with high barriers to entry; or those that give agile competitors early-mover cost benefits.
v Creating value in the fourth area, which represents 30 percent of a vehicle’s content, will be extraordinarily difficult. Consequently, North American suppliers should actively consider their exit options in these segments.
v Our findings, which have strategic implications for suppliers and OEMs alike, show that North America’s auto suppliers must consolidate and restructure their portfolios to improve profitability.
Thanks & regards,
Source: http://www.mckinsey
BigGains !!
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