Automotive supplier study 2026
Redefining an industry
Henning Rennert and Dr. Raimund Wolf
Executive summary
The value creation model that made European, and especially German, automotive suppliers successful is reaching its limits as Asian competition accelerates. Suppliers now need to move fast on two fronts: restructuring and capacity adjustments to restore efficiency, and partnerships to make innovation happen.
- The supplier business has become majority-Asian for the first time. Asia now holds close to 50% of global market share, and China's share nearly tripling between 2015 and 2025, driven above all by its lead in battery technology
- The global industry is growing, but the top suppliers are not benefiting. Sales of the top OEMs grew 10% per year (CAGR), while the top suppliers' sales declined by 3%
- Germany's competitive gap is widening. Chinese suppliers are scaling toward leaner administration and lower manufacturing costs, while German suppliers remain weighed down by entrenched structures
- Slow restructuring is costing strategic momentum. High interest burdens and sluggish debt reduction are tying up the capital urgently needed for technological renewal
- Innovations are essential to become successful, yet others are reaping the scaling gains. Semiconductor and battery manufacturers achieve average EBIT margins of up to 28%, while traditional suppliers remain stuck in the low single digits
Why the proven success path of European automotive suppliers no longer leads to the goal
The European, and particularly the German, automotive industry remains stuck in crisis mode. The value creation cycle that propelled Germany's supplier industry to the top of the world for decades no longer holds up, and a downward spiral has set in that will be difficult to break.
Behind this lies a deep structural shift. For decades, the high volumes of European OEMs secured suppliers a leading position with a broad product portfolio. At the same time, supplier growth was often inorganic and debt-financed. Now that OEM volumes are falling and new competitors, particularly from China, have established themselves, the industry is falling behind on one decisive future trend after another: interest burdens are too high, and too little capital is left for innovation.
A sustainable answer can only be achieved collaboratively, with suppliers standing together and working closely with manufacturers. This is the way to regain technological and commercial competitiveness in future fields such as battery technology, software, and infotainment, and to move ahead in autonomous driving. And this is exactly where the opportunity for German industry lies: in an ecosystem that has always been strong in the interplay between established players, research institutions, and start-ups.
Sales for top automotive manufacturers
Sales for top suppliers
Who controls the global automotive supplier market today?
The supplier business is Asian for the first time. Our analysis shows that Asian suppliers now hold close to 50% of the global market, while the traditional automotive regions are steadily losing ground.
The rise of Chinese suppliers is especially striking. They first built their lead in battery technology, which allowed their market share to triple between 2015 and 2025. Today, they are challenging Western suppliers across every relevant domain: powertrain, software, electrical/electronic (E/E) architecture, and advanced driver assistance systems (ADAS).
German suppliers are being hit hardest, losing share above all in battery technology and electric powertrains. In many areas, technological leadership will have to be won back as it is the only way out of pure price competition.
Trend in global market shares by region 2005, 2015 and 2025
Americas - 8 suppliers
Revenue share of the 8 largest automotive suppliers from North and South America (Americas) of the global total revenue, in the years 2005, 2015 and 2025.
| Year | Revenue share |
|---|---|
| 2005 | 16% |
| 2015 | 15% |
| 2025 | 15% |
Europe - 9 suppliers
Revenue share of the 9 largest automotive suppliers from Europe of the global total revenue, in the years 2005, 2015 and 2025.
| Year | Revenue share |
|---|---|
| 2005 | 16% |
| 2015 | 14% |
| 2025 | 13% |
Germany - 8 suppliers
Revenue share of the 8 largest automotive suppliers from Germany of the global total revenue, in the years 2005, 2015 and 2025.
| Year | Revenue share |
|---|---|
| 2005 | 23% |
| 2015 | 26% |
| 2025 | 23% |
Asia - 24 suppliers
Revenue share of the 24 largest automotive suppliers from Asia of the global total revenue, in the years 2005, 2015 and 2025. Also shown: the share of revenue attributable to battery electric vehicle (BEV) drivetrains.
| Year | Total share | Of which battery electric |
|---|---|---|
| 2005 | 44% | 2.4% |
| 2015 | 41% | 1.1% |
| 2025 | 36% | 1.4% |
China - 6 suppliers
Revenue share of the 6 largest automotive suppliers from China of the global total revenue, in the years 2005, 2015 and 2025. Also shown: the share of revenue attributable to battery electric vehicle (BEV) drivetrains.
| Year | Total share | Of which battery electric |
|---|---|---|
| 2005 | 0% | – |
| 2015 | 5% | 0.2% |
| 2025 | 15% | 6.9% |
How are semiconductor and battery manufacturers winning the innovation race?
In today's innovation race, others are currently reaping the benefits of scale. Globally operating semiconductor manufacturers and Chinese battery manufacturers are achieving significantly higher margins than many traditional suppliers.
Our analysis of average EBIT margins from 2022 to 2025 clearly illustrates this gap: leading semiconductor and battery companies reach margins as high as 28%, while many classic mechanical and mechatronic suppliers remain in the low single digits. In terms of R&D spending, China averages 5.5%, the rest of Asia averages 3.3%, and Germany comes in at 7.2%.
The conclusion is clear: suppliers should not abandon their mechanical and mechatronic strengths but instead combine them intelligently with software and AI.
Four recommendations for automotive suppliers
A turnaround is possible if suppliers act decisively now. Our analysis points to four priorities:
- Sector-wide cooperation as a strategic liberation. OEMs and suppliers should move beyond old competitive boundaries and commit to shared development efforts and coordinated investment
- The chase for technological catch-up in key technologies. Effort should concentrate on the domains where the race is still open and real differentiation is possible. Mechanical and mechatronic strengths should be combined intelligently with new technologies
- Accelerated restructuring and efficiency increases. Capacity adjustments and debt reduction must move forward much faster to free up capital for future investments. Rigid, entrenched structures should give way to streamlined organizations with lean governance and a focus on engineering excellence and speed
- Self-help, rather than waiting for the market or policy shifts. The industry should not rely on market recovery or government assistance but should instead make use of the levers of innovation and scale. What matters most is an entrepreneurial attitude that identifies emergent suppliers early on as potential partners or acquisition targets
Sophie Cathrin Kulig, Steven van Arsdale, Sarah Guida, Valentin Woesler, Marie Enders, Nils Goepel, and Rob an der Meulen, as well as the team from the University of Oldenburg led by Prof. Dr. Jörn Hoppmann, Dr. Hauke Lütkehaus, and Sebastian Neiweiser also contributed to this report.
Automotive supplier study 2026
Methodology
For the automotive supplier study 2026, Strategy& worked with the Universität Oldenburg to analyze selected balance sheet metrics of 85 of the top 100 automotive suppliers, each with an automotive revenue share of over 50%. The observation period spans from 2020 to 2025 and includes metrics such as revenue, EBIT margin, R&D ratio, SG&A, COGS, and interest expense relative to EBIT. The analysis is based on data from Bloomberg and PwC Autofacts®, supplemented by publicly available company information and the 03/2026 edition of German magazine Automobil Produktion.
