2021 Global Automotive Supplier Study

Navigating disruption in the supply chain

Over the past 17 months, the global automotive industry has been through the wringer—from pandemic-provoked production shutdowns and an accelerated shift to virtual sales to supply chain disruption. Multiple megatrends are also affecting the industry. How can suppliers adapt to this rapidly changing market?

Automotive suppliers respond to market changes

Over the past year, automotive suppliers have seen their share of headlines. Globally, they’ve been tested by shutdowns and labor shortages as a result of COVID-19, a global semiconductor shortage, and a sudden shift to digital sales. Meanwhile, the industry is already going through major structural changes as a result of several megatrends, including a shift toward electrification, autonomous driving, connected technologies, and shared mobility.

In our fifth Automotive Supplier Study, we take a look at automotive supply chain trends and the road ahead by analyzing shareholder value performance data from nearly 300 of the top global automotive suppliers. We examine performance by segment and the challenges and opportunities that automotive suppliers must address to thrive—or even to remain viable—in the new market reality.

Explore the key findings

  • The industry has run into a massive financial jam resulting from a combination of economic shutdowns in 2020 and 2021 and the continuing semiconductor crisis, with the risk of other raw material shortages looming large on the horizon.
  • Four disruptive megatrends (supply chain, electrification, technology convergence, and new market entrants) continue to drive change for suppliers, even in long-entrenched segments.
  • The semiconductor crisis will continue to force suppliers to address some of the issues that have been percolating beneath the surface for decades, including lack of visibility across the supply chain, aging IT systems, and erosion of trust between manufacturers and suppliers.
  • Component clusters tied to electrified vehicles (EVs) are growing at a frenetic pace, while internal combustion engine (ICE) components are either stagnant or declining.
  • Despite recent setbacks in the industry, it is time for suppliers to plan for the future. With a wave of new technologies either available today or looming large on the horizon, suppliers should focus on adequately preparing for what’s to come by looking at synergistic partnerships and strategic alliances to manage capital deployment requirements while continuing to invest in efforts to support future growth.

What’s next for suppliers?

Suppliers should make some important decisions about their future right now. They have several strategic options based on their positioning today in growing, stagnant, or declining segments. They should expand or defend their current positions, or pivot toward something new. The key question for suppliers is how much wiggle room they have in providing short-term shareholder value versus positioning their company for long-term success. The two aren’t necessarily mutually exclusive, so finding the right balance can help lead to a successful outcome.

Both in the near and long term, suppliers should adequately prepare their organizations for a future that’s arriving faster than expected. Where there was once time and money to “disrupt yourself” and create “optionality,” now suppliers should pivot and execute on targeted strategies that align with rapidly changing industry conditions. There has never been a more exciting, technologically advanced time in the automotive sector, and yet, time is perhaps the scarcest commodity of all right now.

Looking back

Deloitte has published its findings on automotive supply chain trends plus industry challenges and opportunities since our first Global Automotive Supplier Study in 2013. Explore the last global automotive supplier study published in 2019 here.

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