Berylls by AlixPartners Top-100 Supplier Study 2026 Automotive Suppliers Struggle with Declining Revenues And Weak Margins

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FAULHABER Drive Systems

Global vehicle production increased by around four percent to 92.9 million vehicles in 2025. However, the 100 largest automotive suppliers were unable to benefit from this, as highlighted by the latest edition of the Berylls by AlixPartners Top-100 Supplier Study.

Global vehicle production is rising, but automotive suppliers are struggling with declining revenues and weak margins. The 15th edition of the Berylls by AlixPartners Top-100 Supplier Study revealed that, despite increased global vehicle production last year, the 100 largest suppliers faced declining revenues. The cumulative revenue dropped by 2.2 percent to €1,061 billion. The main causes were unfavorable exchange rates, weaker demand for electric vehicles outside of China, and increasing geopolitical and economic pressures.

The ten largest automakers also recorded declining revenues and a massive drop in profitability. The transformation is particularly evident in the rise of Chinese companies, which are increasingly shaping the pace of innovation and market structure in the industry, as Dr. Jan Dannenberg, Partner and Managing Director as well as Co-Leader of the DACH region at AlixPartners, explains: "Although more vehicles were produced globally in 2025 than in the previous year, growth was unevenly distributed. While China expanded its production by double digits and now accounts for around 30 percent of global vehicle manufacturing, production volumes in Europe, the USA, and South Korea stagnated or declined. However, the higher production figures did not automatically result in increased revenues for suppliers. Around 62 of the top 100 supplier companies had to accept revenue declines. Even without negative exchange rate effects, growth would have been minimal."

At the same time, the vehicle mix increasingly shifted towards more affordable compact and mid-range models, particularly in the Chinese market, which also negatively affected the revenues of automakers and suppliers.

Worse Profitability

Furthermore, the profitability of the industry is deteriorating according to the study. The average margin of the ten largest vehicle manufacturers fell from 6.9 to 4.2 percent. Individual companies like Stellantis even plunged deep into the loss zone.

The supplier industry was not spared from this development either. The average margin of the Top 100 suppliers dropped from 5.8 to 5.2 percent. Companies with high dependency on electromobility were particularly affected. Fluctuating demand, delayed vehicle launches, and political uncertainties led to significant write-offs and overcapacities.

Strong Competition From China

In addition, Chinese companies are growing significantly faster than their international competitors. While the leading suppliers worldwide grew by an average of just under six percent annually over the past five years, Chinese companies achieved average growth rates of around 16 percent per year. Furthermore, new technology leaders in the field of autonomous driving and software-based mobility are emerging in China. Companies such as Huawei, Horizon Robotics, and Momenta are investing heavily in future technologies and benefiting from clear industrial policy support.

The structural advantage of China is not only based on innovation but also on long-term lower production costs. Since the year 2000, producer prices in China have risen significantly more slowly than in Germany or the USA. As a result, Chinese suppliers today have substantial cost advantages compared to their western competitors.

Inconsistent E-mobility Strategy Harms Supplier Industry

The development of electromobility is becoming increasingly uneven. While Chinese manufacturers are consistently pursuing their electric strategy, Western automakers are significantly delaying numerous battery-electric programs, as the study highlighted. U.S. and South Korean manufacturers are particularly affected. At the same time, many Western carmakers are extending the lifespans of their combustion engine platforms to better utilize existing production facilities and secure liquidity in the short term. The withdrawal of government subsidies—especially in the U.S.—has further exacerbated this development. This creates significant pressures for suppliers who have already made substantial investments in electromobility. Production capacities remain underutilized for longer periods, capital is tied up for extended durations, and financing costs rise.

Carmakers Exert Pressure

In light of declining profits, automakers are increasingly focusing on cost reductions. Particularly affected is the material expenditure—and thus the supplier industry. "The result is tougher price negotiations, longer claiming processes, and more restrictive support for struggling suppliers. At the same time, it is evident that technologically demanding segments are better able to defend their profitability. Semiconductor manufacturers remain by far the most profitable segment in the industry," emphasizes Dr. Jürgen Simon, Partner at Berylls by AlixPartners. High entry barriers, technological complexity, and geopolitical dependencies continue to grant them significant negotiating power over automakers. In contrast, providers of interchangeable standard components are coming under increasing pressure.

Global Supply Chains in Significant Transformation

The escalating trade conflict between Europe and the United States significantly strained transatlantic supply flows in 2025. Both imports and exports declined sharply. At the same time, European companies lost market share in China and India, while Asia's exports to Europe increased. India is increasingly emerging as a strategic winner in the global realignment. Numerous suppliers are investing in new plants and development centers there. Government support programs and local value creation requirements are further accelerating this trend.

Germany, on the other hand, is experiencing a significant reduction in industrial capacities. Several plant closures, extensive job cuts, and a lack of new investments highlight the structural pressure on the location. Dr. Jan Dannenberg explains: "In the last eight years, around 100,000 jobs have been lost in the German automotive industry. This trend cannot be stopped in the coming years. And Germany is dismantling locations that are being newly established elsewhere. We are now talking about a reduction in value creation in our industry by 20 to 25 percent. The next three to five years will be bitter for the German supplier industry, especially for medium-sized companies that have not yet strongly internationalized their business."

New Technologies Require Investments

The transformation of the industry requires significant investments in new technologies, production networks, and digitalization. At the same time, declining margins and rising financing costs are making access to capital more difficult. Dr. Alexander Timmer comments: "While the stock markets partially recovered in 2025 and many suppliers recorded significant share price gains, banks and debt capital providers remain cautious. The industry is thus caught in a tension between necessary transformation and limited financial flexibility."

Quick Adaptability as a Success Factor

In the coming years, flexibility, regional presence, and technological innovation will determine the success of suppliers. The industry is increasingly moving towards "Local for Local": production and supply chains are being regionalized to reduce trade risks and ensure customer proximity. At the same time, Chinese automakers are creating new business opportunities for Western suppliers through their international expansion. However, the critical challenge remains financing the transformation. Successful suppliers will therefore need to focus their portfolios, divest non-strategic business areas, and systematically reduce their capital commitment.

Top 10 Suppliers

In 2025, Bosch and Denso held positions 1 and 2 as in 2024. The first surprise came at position 3, which was taken by CATL, improving by 4 places compared to 2024. This was followed by Hyundai Mobis and Magna, which swapped places. Unchanged in position 6 is ZF Friedrichshafen. Aisin improved by one place compared to 2024 and now holds position 7. This is followed by Forvia, Michelin, and Hasco.