Implementation strength of the management is central

In our view, anyone hoping that new players will emerge to capitalize the industry in light of the reluctance of established financiers is making a risky bet. However, our annual restructuring study shows that financiers are still willing to help automotive suppliers in a crisis situation if they present a convincing strategy and a resilient financial plan.

The basic prerequisite for this is the completion of the usual “homework” of every supplier in the current situation. These include securing liquidity, reducing costs, increasing profitability and consolidating sites. Inflation costs must be passed on to OEMs and adequate prices should be enforced.

In order to achieve the investment-intensive transformation on this basis, an excellently positioned management team is also required. They should not only be able to clearly formulate the strategy for the desired change, but also present a resilient business plan for at least three years.

A management team that is strong in implementation also distinguishes itself through good and active communication with financiers and OEMs alike. The information needs of manufacturers are increasingly similar to those of banks – whether in terms of strategy change or ESG implementation.

Unlike in previous crises, the topic of business model adaptation is increasingly coming into focus. Without a long-term target picture that includes customers, products and concrete paths of change, no one will be willing to make an investment.