German automobile supply industry employs more than 300,000 people in Germany alone and has been one of the nation’s most stable and healthy industry sector with around 220 billion euros before the pandemic increased difficulties for companies.
The challenges for automotive component manufacturers
However, Brexit, low vertical integration for electric cars, digitization, overcapacities, ailing markets – not to mention China – and the ongoing cost pressure from automobile manufacturers put already more and more pressure on the sector.
Revenue in 2021 will be around 25% below the previous year. Therefore, many producers in this sector must reduce their dependence on cars and hope for the federal government.
At Continental for example 13,000 jobs are at risk in Germany, at Schaeffler 4,000 across Europe, at Brose 2,200, Eberspächer will cease production of parking heaters in Esslingen am Neckar by 2022.
A current analysis by Falkensteg consultancy concludes that suppliers with an annual turnover of less than 500 million euros are particularly hard hit.
The small and medium-sized companies in the supplier industry often have to develop a completely new business field due to their very specific products, as VDA CEO Müller explained.
How to move forward? New solutions for the industry
For instance, Fischer Group – a family business with 2800 employees – is aware it must reduce its dependence on the automotive industry by developing modular power generation units with reformer methanol fuels.
These units can be used, for example, to power telecommunications systems in remote areas instead of diesel generators.
To sell these products and solutions, new markets and customer groups are in need.
Finding this is a challenge: it’s not just about transferring the existing business model to other industry sectors, but also about understanding the challenges these new branches of industry themselves have. Therefore, it is imperative to verify who you want to address and where. Business information on a high level could be the way moving forward.
Because accurately mapping a market and the counterparts in it is the first step in any strategy that involves entering new areas or unexplored sectors.
Business information is the most immediate response in such situations.
The need to adapt to a fast-changing scenario requires us to know quickly and precisely the realities to which our business could turn.
Potential customers, suppliers, distributors and new partners are key elements in the success of any company: having up-to-date information on these figures is now easier and could make all the difference, even for German suppliers to the automotive sector.