Abstract
Report synopsis
This is the definitive assessment and forecast of the state of the automotive
supply chain globally. Published by Automotive World and written by industry
expert Colin Whitbread (former SupplierBusiness analyst), this is your
best-available source of understanding, insight and analysis of the automotive
supply base. The full report is 62 pages in length.
Executive summary
Recent and ongoing events in the North American and European auto supplier
sector have once again highlighted the important role merger and acquisition
(M&A) activity can play in the industry's restructuring. Current industry
challenges suggest an intensification of this activity now appears possible in
2006/07, representing continuation of an evolution that has been apparent for
over ten years. The dynamic nature of this trend has resulted in a significant
realignment of the global supplier sector, as players have exited and entered
the business, either partially or completely, willingly or reluctantly, or
used M&A to redefine and sharpen corporate strategy around core businesses.
Recent high-profile bankruptcies at a number of major North American suppliers
have pinpointed flawed business models and significant legacy issues that
continue to damage financial performance, the result of which may well be the
need for some further dramatic business restructuring. This could well give
rise to significant additional M&A opportunities that, in turn, are attracting
new visionary financial players, confident of their abilities to drive through
major structural change in some sectors, to the arena.
Few days pass without further news of actual or potential restructuring moves
involving the purchase or sale of assets between differing parties.
Furthermore, this public domain information is probably just the tip of the
iceberg, with further extensive behind-the-scenes activity also being
discussed, evaluated and analysed. This activity encompasses suppliers at all
tiers (not just tier 1), OEMs and parties with predominantly financial
interests, most notably the private equity players. This complexity of
activity makes analysis of overall trends difficult, with many deal drivers
apparent, but certain themes have emerged.
One such theme is the continuing desire of many suppliers, especially the
larger and more diversified tier 1 vendors, to whittle down their structures
to focus on 'core' operations only...
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