DETROIT, March 8 /PRNewswire/ -- Manufacturing will not disappear in
Europe and North America -- but the development of emerging markets and the
need to compete with peers in low-cost countries will draw more of automotive
manufacturing investments into the south of the U.S. and Mexico and toward
Asia and Eastern Europe.
That is the main finding of The Odyssey of the Auto Industry: Suppliers
Changing Manufacturing Footprints, a study conducted by Roland Berger Strategy
Consultants, in partnership with the Original Equipment Suppliers Association
(OESA).
The study is the focus of a half-day seminar today at the 2004 SAE World
Congress in Detroit's Cobo Center.
The study finds that movement to low labor cost locations is the highest
priority for suppliers when aligning their manufacturing footprint. As a
result:
* North America and Western Europe will lose 11% to 20% of their global
supplier production share by the end of 2010, as automotive supplier
production in Asia and Eastern Europe will soar.
* The global production share for automotive suppliers in the U.S.
Midwest is forecast to shrink 3.5% annually, and mid-sized suppliers are going
to be the most affected. Small and medium size automotive suppliers will
expand production capabilities in Mexico and in the southern United States,
but larger suppliers will expand overseas.
* Within Europe, Spain and Portugal will suffer the biggest losses in
share production, and Eastern Europe will benefit the most with a 130% gain.
* By 2010, the share of supplier production will increase 19% in South
America, with Brazil being the strongest player.
* China will attract the bulk of automotive supplier investment as its
share of Asia's automotive supplier production increases by 165% by 2010.
Korea and Japan will remain stagnant as their suppliers focus on overseas
expansion.
"Growth opportunities in distant markets and increasing global cost
competition elevate the pressure to act globally," said Wim van Acker,
managing partner of Roland Berger's Detroit office. "Domestic automakers have
lost almost 10 percent of U.S. market share in less than 10 years," he added.
"The decrease has accelerated the need for domestic automotive suppliers to
seek overseas customers and to invest outside of the U.S."
The study outlines some of the major pitfalls of global expansion and
addresses ways to avoid them. Major risks to global expansion for suppliers
include underestimated startup and operations costs, a lack of local
capabilities and materialization of customer demand.
"There is a need for better cooperation between suppliers and customers in
adjusting their global footprints," van Acker said. "Suppliers currently lack
information about their customers' plans, which in turn makes it more
difficult for them to develop their own global manufacturing strategy."
Data for the study was gathered online from more than 60 suppliers in
December and January, representing more than $70 billion in annual revenue.
Those results were supplemented by extensive interviews with the operations
managers of more than one dozen selected suppliers.
The Roland Berger findings are the basis of the study's recommendations
for best practices in aligning manufacturing footprints; strategies to design
competitive manufacturing footprints, most wanted emerging markets, and major
pitfalls of global expansion and how to avoid them.
Roland Berger is a leading global strategy consulting firm with more than
1,700 consultants, in 34 offices in 24 countries across Europe, Asia, and the
Americas. The company's global Automotive Competence Center of 120
professionals has completed more than 700 projects during the last decade.
For more information about the company, visit http://www.rolandberger.com .
OESA is a forum for more than 350 automotive suppliers with global sales
of more than $300 billion annually. Members include automotive suppliers of
components, modules, systems, material and equipment.
SOURCE Roland Berger Strategy Consultants
 back to top
Related links:
http://www.rolandberger.com
CONTACT:
Andreas Mai of Roland Berger Strategy
Consultants, +1-248-729-5136, Email:
andreas_mai@us.rolandberger.com ; David Andrea of Original
Equipment Suppliers Association, +1-248-952-6401, Email:
dandrea@oesa.org ; or Dan Criscenti of AutoCom Associates,
+1-248-647-8621, Email: dcriscenti@usautocom.com , for Roland
Berger Strategy Consultants
NOTE TO EDITORS: A full copy of the report will be available for
news media on March 24, 2004.
|
