Several Chinese Auto Suppliers Likely to Emerge as Leading Global Consolidators

IndustryWeek (8/24) – A global study of more than 350 automotive suppliers conducted by PRTM…showed that Chinese and the largest global European suppliers scored highest on PRTM's global buyer scale, indicating these suppliers will likely buy other suppliers that are distressed…Only one supplier, PPG Industries, Inc., appears on the top 10 global buyer list. PPG, located in Pittsburgh,Pa, is a glass and paint manufacturer that serves the auto industry, but is also highly diversified into several other industry sectors. PRTM predicts that several of the remaining 31 largest global North American suppliers are most likely headed for bankruptcy or buy-out.

The intensity of bankruptcies and consolidation is anticipated to be strongest in the chassis (brakes, steering, axles, suspensions, etc.) and electrical/electronics (wire harnesses, switches, door systems, etc.). Chassis systems are usually capital investment-intensive and, thus, more impacted by volume declines, whereas electronic systems represent the future of the vehicle industry and many suppliers are trying to add electronic capabilities to their respective automotive systems.