European Automotive Suppliers. Who Survives and Who Disappears?

GlobalAutoIndustry.com’s latest Audio Interview “European Automotive Suppliers. Who Survives and Who Disappears?” with Ron Hesse features Christian Drenth. Christian founded DreCo Insights after observing the effects of the EV transformation across the European automotive supply chain. Programs ran out. No new business in the pipeline. And the next 18 to 24 months no longer plannable for any supplier with more than 30% of revenue tied to automotive. His work focuses on one question: what does an automotive supplier do before the order book runs empty? He has 27 years of direct experience with OEMs and Tier 1 suppliers across Europe and the US, and holds an Executive MBA from Mannheim Business School and ESSEC Paris. DreCo Insights works with automotive suppliers across Europe.

In the 10-minute Audio Interview, Mr. Drenth discusses these questions:

• How severe is it really?
  European car output dropped sharply in 2024. Supplier insolvencies in Germany and France are at levels not seen since 2009. You work inside these companies. How bad is it actually, and is this a temporary correction or something more permanent?
  
  
• What does survival require?
  You wrote on LinkedIn that below five percent operating margin, a supplier cannot invest, cannot hire good people, and cannot survive the next downturn. What does a Tier 2 or Tier 3 company actually need to do right now to stay viable?
  
  
• Staying on the OEM shortlist.
  OEMs are cutting their supplier bases. Losing one platform can mean losing several years of revenue. How is OEM purchasing behaviour changing, and what separates the suppliers that keep their contracts from those that lose them?
  
  
• The decisions that matter now.

A supplier owner is listening to this today. Volumes are down, an OEM has cut call-offs, and the pipeline is thin. Some are looking at defence or industrial markets to reduce their exposure. Where do those attempts go wrong, and what are the one or two decisions that actually change the outcome in the next 12 months?

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