The global automotive supplier industry is expected to see continued growth in 2017, with revenues increasing by 3% and an average EBIT margin of ~7%. However, first signs of weakening are visible with softening of growth in China and Europe and a slight volume decline in the US. Chinese and NAFTA suppliers are currently more profitable than the global average, while exterior, chassis and tire suppliers are expected to improve their EBIT margin profile in 2017. Powertrain suppliers, on the other hand, continue to see their margins under pressure due to intensified competition and the cost of innovation. For 2018, the industry is expected to see continued growth, but at a slower pace. The automotive industry is facing transformation due to upcoming automotive disruption, which will fundamentally change the industry. Suppliers need to transform their business models to adapt to this change.
