Situation of automotive suppliers comes to a head

adminonJuly 18, 2022February 11, 2022Leave a Comment

Declining sales in china hit automotive suppliers hard – manufacturers’ cost-cutting programs create additional financial pressure. The consequence: difficult times ahead for the global automotive supplier industry.

A look inside a mercedes factory.- picture: daimler

In the first half of 2019, car production declined by 5 percent compared to the same period of the previous year. In addition, an average EBIT margin of around 6 percent is expected for the current year, the lowest value since 2012. These are the key findings of the new "global automotive supplier study 2019" by roland berger and lazard. Key figures from over 600 suppliers worldwide were evaluated for the study.

"The main reasons for this negative development are weak passenger car sales in china and the general economic slowdown. In addition, there are structural changes in the context of the change to "electromobility", explains felix mogge, partner at roland berger. "International trade conflicts and the ongoing savings programs of manufacturers are reinforcing the trend."

Mobility of the future and german mechanical engineering

More information, expert knowledge and the latest trends can be found at the focus conference "mobility" at the 11. german mechanical engineering summit on 15. And 16. october 2019 in berlin: powertrains, power-to-X, battery production, last mile, urban infrastructure, logistics/transport, aviation, hyper-loop and much more.

Overcapacities due to declining growth in china

China has been the growth engine of the global automotive industry in recent years. The trade conflict with the USA has meanwhile significantly changed the framework conditions. For example, automotive sales in china fell by double digits in the first half of 2019 compared to the same period last year.

"The growth forecasts were good and many suppliers have built up further capacity", says felix mogge. "Now 60 to 70 percent of new capacity remains unused at some suppliers."

Access to capital more difficult

Suppliers should now secure sufficient financial leeway that will be sustainable in the long term. Because access to capital could also become more difficult due to the negative market situation.

"Many equity investors prefer sectors other than the cyclical automotive industry. At the same time, banks are becoming more restrictive in granting credit financing – this particularly affects smaller suppliers in product areas that will come under structural pressure in the future" says christof sondermann, managing director at lazard.

In addition, the number of M&A transactions in the supplier sector is declining this year. Chinese companies in particular, which represented an important buyer group in previous years, are now much less active.

Managing director – successor (m/f/d)

Mokveld central europe gmbh

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Investment pressure from new trends

Suppliers also need financial leeway due to the increasing trends in the automotive industry: digitalization, new mobility concepts, autonomous driving and e-mobility are putting the entire industry under pressure to invest – from oems to suppliers.

For many of these projects, roland berger says it is difficult to predict when and if the investments will be profitable. At the same time, carmakers are trying to cut costs, including through purchasing cost-cutting programs, which in turn affect suppliers.

This creates a difficult balancing act for established suppliers. You have to continue to run the established business profitably and at the same time not miss any growth trends. In this context, large and financially sound companies tend to have a better starting position, according to the consultancy. For many smaller companies, however, the change will be very challenging.

Suppliers need individual strategies

According to the study, however, there is no one-size-fits-all approach that suppliers can take. Each company must find the right strategic approach based on its own situation and market position.

In general, many suppliers need to become more flexible to keep pace with rapid technological developments. "Above all, they need agile structures and procedures in their organization – and should also increasingly examine cooperative ventures", advises roland berger-partner mogge.

He added that consistent and active portfolio management is equally important. "Suppliers have to decide whether they can achieve or defend market leadership in areas that will stagnate in the long term. If this is the case, the business should be expanded and consistently focused on increasing earnings and maximizing cash flow; otherwise, the exit should be considered" says lazard’s christof sondermann. "The freed-up capital should be invested in areas where profitable growth is realistic."

City runabout or race car? the scientific test of the uni bochum knows it.

If you want to invest your money in a vehicle, you should have a look at the online-test of scientists from bochum. He selects the appropriate car brand according to the individual driver’s profile.

agony of choice

A sleek golf? A solid ford? Or go straight for a moon price brand with extravagant esprit? If you want to invest in a new car, you’ll be spoilt for choice. Because it is not always easy to choose between the many different makes of car. A special report can help online test by scientists of the ruhr-uni bochum (RUB). Based on the personal preferences and attitudes of a car driver, he scientifically selects the five brands with the closest match.

"It all began shortly after the turn of the millennium with a diploma thesis that included the connection between personality structure and the choice of car brand has examined", looks dr. Rudiger hossiep, head of the test development project team at the RUB, back. "There is definitely a correlation there, so we kept researching and over time the whole project got bigger and bigger and the results more and more accurate."

Five-digit number of participants

Today, FAHR (the questionnaire for automotive action regulation) is based on a considerable database: figures and information of the motor talk and the car community motor talk as well as data from the meanwhile five-digit number of participants the scientists have brought together. According to hossiep, the results of the online test are accordingly stable and plausible.

How FAHR works in practice? Who would like to know which car brands suit him, fill the comprehensive questionnaire from. The next step will be a individual profile created: what is the importance of the image of a car?? How important are functionalities? How high is the personal security requirement?? In addition, the detailed evaluation sheet on which five car brands best and which least suit the respective participant.

High hit rate

"In about 90 to 95 percent of the cases, we can identify a make an accurate statement and provide clear guidance give. Only among those who have unusual preferences and therefore favor very specific brands are there still variations. the corresponding database is simply still too small", hossiep points to exotic examples such as the typical maserati driver.

With FAHR, he and his team have breaking new ground. Because no one else applies the methods of attitude and personality research in this way to the target group of car drivers. That’s a bit surprising, since the car is the most expensive consumer good of all, and in germany alone it costs around 40 million copies crossing the streets. However, the findings of the bochum scientists seem to be of only marginal interest to the major manufacturers.

Irrational behavior

"The psychology plays a major role in this area. A lot is something irrational and has not only to do with factual arguments", meanwhile, hossiep outlines the special buying behavior in the automotive sector. "The consumer simply lacks the competence to distinguish between the quality of two brands. So the image is a decisive factor in buying behavior and this is, of course, primarily dominated by psychological factors."

In his view, car advertising, for example, is also being made primarily for the so-called post-decision conflictsconsumers want to use advertising to verify their buying decisions after the fact. Hossiep: "he needs confirmation: ‘i’ve made the right decision’"."

Dominant impression

In order to irrational preferences of car buyers to illustrate this, hossiep takes up the suvs, which are currently so popular: "these are totally oversized cars with which you can’t get into a normal parking space and which no one can actually use in city traffic. Nevertheless, they achieve considerable sales figures", says the psychologist, and at the same time tries his hand at causal research: "through their design, vehicles make a dominant impression and people feel particularly protected there, because this is also repeatedly conveyed by advertising."

With the help of such findings and the constantly growing database, hossiep and his team have recently been able to offer the FAHR subscriber a wide range of services a selection of suitable models in addition to the right brand to be allocated. He is given twelve models that are a good match for his profile. At the same time, the test also six models that the participant should not choose under any circumstances. Hossiep: "We are constantly refining the algorithms and can therefore always make more detailed statements."

Career starters beware

"Young graduates must not underestimate what a car signals", warns psychologist hossiep, explaining: "i know many personnel managers who applicant bring to the car to take a look: has he cluttered it to the max? Has he parked sensibly? From this, they try to draw conclusions about his character and work ethic."

Many newcomers to the profession are also confronted with the issue of company cars. "Companies deliberately use it as an incentive. But there are strict rules. because of course i can’t drive a fancier car than my direct superior."

You want to sell your car and are looking for tips for a clean process to get the best sale price? We have put together the most important tips and precautions for you.

Get to know the best portals for used cars in switzerland, learn how to estimate a realistic selling price and what you need to know concerning. expect insurance and deregistration at the road traffic office.

reputable used car portals in switzerland

The following is important for the portals:

The portal must have sufficient coverage in your sales region (also make sure it is multilingual, should you need z.B. you also want to attract customers in western switzerland)
The costs of course play a big role. Thus, these differ sometimes enormously among the various providers.

Autoscout

According to its own information, autoscout24 is the motor vehicle provider with the most visits (web page views) on the swiss market, namely 15.5 million per month. For a fee, you can place ads in the basic, plus, premium and moneyback classes. The offers differ in their additional features and their duration.

At toplistings the ad is placed at the top of the search results.
With safenumber you do receive inquiries forwarded, but to a temporary number. This ensures that the interested party does not know your personal phone number.
Through topcar the vehicle is highlighted and placed in the most prominent position.
Moneyback Guarantees that the vehicle will be sold within 120 days. Otherwise the customer will be reimbursed.

The prices start at CHF 69.– and increase up to CHF 279.–. The ad may contain up to 16 pictures and a youtube video. Another plus is that the ad will be posted on anibis and comparis at the same time.

Autoricardo

With 100.000 advertisements, autoricardo is one of the largest online portals for cars in switzerland. in addition, the advertisements also appear on ricardo.Ch, so that, according to the provider, up to 400.000 visitors have access to it. The vehicles can be offered either by auction or fixed price. The insertion of the advertisement is always free of charge.

When the vehicle is sold, 9 % of the selling price obtained, max. CHF 190.–, as a success commission. If the sale falls through because the buyer does not pay the price, even though the deal was done correctly, the commission can be refunded.

Those who want to put their ad in the foreground can use the promotion options. This will be on autoricardo.Ch additionally between CHF 5.– and 10.– charges CHF 60 for placement on the home page.–.

Who on ricardo.Ch wants to score with promotional advantages, pays an additional CHF 2.– up to 12.–. On the ricardo homepage, which according to the provider receives 200,000 visitors a day, you pay an additional CHF 40.–.

Autolina

Autolina.Ch has according to its own information over 100’000 advertisements. These are free of charge for private individuals. During the first 7 days of the advertisement phase, the advertisement is only visible to registered dealers, who can submit a purchase offer during this period. After that, the vehicle is available to all autolina visitors, who can purchase it for a further 23 days. If the offer is still available after a total period of 30 days, it can be posted another 14 days free of charge.

Our tips for a successful car sale

Tip 1: how to determine the market value of your vehicle?

You want to sell your car but you do not know what it is worth? The value of a vehicle depends on the make and model, year of manufacture and mileage, equipment and condition, number and price of similar offers. In order to estimate the value of the vehicle, it is advisable to have it checked by a garage that is familiar with the brand. It detects weak points and tells you where you can not avoid a repair.

additionally compare the prices on the relevant portals. Filter by equipment features, mileage, model and year of construction.

Tip 2: use the free online car valuation service

In addition to your own and your car dealer’s evaluations, you can make a free online car evaluation. Under autouncle.Ch you can get a quick and uncomplicated picture of the market value of your vehicle. On this page, an estimate of the realistic price is made by evaluating advertisements of used vehicles in various portals. important: this is an estimate based on certain criteria and not a guarantee of a realistic selling price.

Tip 3: the more time you take, the better your chances of selling the vehicle

If you want to sell your car, take your time: for the check at your garage, for the determination of a reasonable selling price and for advertisements. The sooner you want to sell your car, the cheaper you have to offer it. If you want to achieve the highest possible price, you should take enough time.

Tip 4: take into account seasonal preferences

To sell a car at the highest bid, it is advisable to take seasonal preferences into account. If you want to offer a convertible, for example, you would be well advised to do so in the sunny months of march or april. In the winter months the price should be much lower. An SUV with all-wheel drive, on the other hand, is more in demand in the cold months. vehicles with a trailer hitch are ideal for caravans, horse trailers and garden waste transports. These should change owners in late winter to be used in the summer months.

Tip 5: High-resolution images arouse interest

An offer that is intended to arouse interest should include as many informative photos as possible. The car should be photographed from all sides, inside and outside. it is important to pay attention to the resolution and format that portal operators specify.

Tip 6: create desirability

If you want to offer your car in a particularly shiny condition, you can have it polished beforehand at a car repair shop specializing in paintwork. This revives the color, removes insect residue and fine scratches. Especially older cars can be made to look years younger with a polish. An investment that pays for itself quickly, because the purchase price can be significantly higher as a result.

Tip 7: wait for the periodic vehicle inspection

If the next periodic vehicle inspection is due in the near future, it is advisable to wait for it. A vehicle with an out-of-date sticker is much more difficult to sell than one that has just passed the vehicle inspection without a hitch. However, the obligatory exhaust gas maintenance must be completed beforehand. Without the emissions test, the car will not be admitted to any vehicle inspection in switzerland.

Tip 8: prepare arguments, documents and keys

Once the advertisement is published, it is time to be clear about the advantages of the vehicle. Comfort, safety, handling, appearance, fuel economy, equipment, accident-free, tax and insurance provide sufficient arguments. With regard to the accident-free status, by the way, you should only commit yourself if you know whether the vehicle is accident-free. If you bought it first or second hand, be cautious about claiming that the vehicle is accident free. In case of doubt, you are liable for false statements in this regard, even if they were made unknowingly.

Prepare the necessary documents. This includes the vehicle registration document, the protocol of the last vehicle inspection, the service booklet, the emissions maintenance booklet, the operating manuals, invoices for additional equipment and keys.

Last but not least, you should come up with a minimum limit up to which you will grant discounts. It is easier to get a price if you come up with a price range in advance. Here’s how you can be more confident in your dealings with the customer.

Important information about the test drive and contract when selling a vehicle

You can always buy and sell a vehicle verbally on a handshake. In order to rule out any ambiguities later on, however, a written contract should be part of every sale. A sales contract with the most important points you can create free of charge through our service. It is important that you fill in the data completely: name and address, ID number, keys handed over and vehicle documents. Only state that the vehicle has been accident-free if you can say so with certainty. However, if you are not the first owner, you should be careful with this statement.

Negotiation and test drive

Schedule the inspection and test drive so that they do not coincide with peak traffic times. You should allow one hour for this. plan the test drive in town and outside, even on highways.

clean the vehicle again beforehand and have the documents ready. For the trip, the vehicle needs tag numbers and must be insured.

Inform the buyer during the inspection about all features, defects and possible accidental damage of the vehicle. This also includes supposedly minor sheet metal damage.

Copy or. Take photos of the potential buyer’s driver’s license and identity card in advance. Make a note of your name, address and ID number.

allow negotiation of the purchase price, but already set your minimum purchase price you want to achieve. So you start negotiations more confidently and can argue more freely. Have the advantages and disadvantages of the car ready. Because praising only creates distrust and could deceive the buyer about defects and quirks.

Warranty for material defects

exclude the warranty for material defects, whereby accidental damage to the vehicle and other defects must be fully reported to the buyer. Guaranteed characteristics must also be included. In case of concealed material defects and missing features you could be held liable for fraudulent misrepresentation. If you describe the vehicle as accident-free and it turns out that this is not true, you may be liable for damages in the event of an accident caused by the vehicle.

Expiry of the payment

It is best to have the money transferred beforehand. Alternatively, the cash payment is a safe way of payment, but you should not do without some security measures. Avoid meeting points in lonely places, such as highway parking lots, forest edges or parking garages. It is best to take a second person with you. Insist on full payment of the agreed purchase price before handing over the keys and the vehicle documents. The buyer is only allowed to drive the vehicle with the appropriate license plates.

Be alert if the alleged buyer asks you to send him money. This is possible, for example, in the case of foreign customers who allegedly cannot transfer the purchase price unless money is first sent to them to cover the transfer costs.

Registration and deregistration of the vehicle

the vehicle registration card must be cancelled at the road traffic office of the respective registration. This is usually paid by the selling vehicle owner. Alternatively, the buyer can make the cancellation or do it by mail. If the vehicle registration certificate has been cancelled, the vehicle may only be driven until midnight of the cancellation date. The license plates remain valid for another 14 days.

Is it possible to withdraw from the purchase contract?

Even if you have already concluded the purchase contract, you as the seller can withdraw from the purchase just like the buyer. As a seller you can withdraw from the contract if the purchase price is not paid. The buyer, on the other hand, can cancel the contract if the vehicle is found to have important defects that were not disclosed or if promised features are missing.

Takeover or cancellation of the vehicle insurance

Motor vehicle insurance can usually only be canceled on specific dates. This is different for the sale of an insured car.

as the previous owner of the vehicle, you can change your insurance without any deadlines if you sell the vehicle and buy another one. You should inform your insurance company of your wish to change in good time. This will refund the proportional insurance amount to your account.
As a new owner you take over the insurance issued on the vehicle liability insurance for 14 days with all rights and obligations. this ensures that there is no unsecured usage. During this period, you can choose another liability insurance or continue the existing one in your name. If you change the insurance, you have to cancel the contract within 14 days after purchase. For this you can z.B. Use our template.
If you have the existing liability insurance if you already transferred your old vehicle to the purchased vehicle, the insurance of the transferred car will expire.

The situation is different comprehensive insurance. It ends on the day of the change of ownership. The previous owner will be refunded excess premiums on a pro rata basis. The buyer can choose and take out a new comprehensive insurance policy according to his or her own preferences.