1. Home
  2. >>
  3. auto
  4. >>
  5. Foresee falling profits in the automotive sector

Foresee falling profits in the automotive sector

Foresee falling profits in the automotive sector

For the period 2009-2013, top executives in the auto industry expect lower sales and profits, more bankruptcies and an increase in mergers and acquisitions. This is reported by “Die Welt” based on the results of a survey by the auditing and consulting company KPMG, for which 200 representatives of the automotive and supplier industry were questioned.

For the coming years, almost half of those surveyed are assuming strongly fluctuating earnings or are unable to assess their company’s profitability. “This is an unusually high value and not a good sign for an industry that is highly dependent on long-term planning,” says Uwe Achterholt, Head of Automotive at KPMG. 25 percent of the managers are of the opinion that the earning power of the companies will decrease. In addition, only one in six car managers assumes rising returns for the period.

At 77 percent, however, more than twice as many managers as in the previous year see the danger of insolvencies in the industry. Pessimism is particularly widespread among suppliers, of which 87 percent expect an increasing number of company bankruptcies. Among the manufacturers, three out of four respondents think this is likely. The main reason for the fears is a loss of sales, but also uncompetitive cost structures, debts and pension obligations of the companies. At 72 percent, twice as many industry experts as in the previous year would expect mergers, takeovers or alliances among manufacturers in the coming years. On the other hand, the car market in the emerging countries will grow faster than in all other regions. According to those surveyed, the greatest growth is imminent in Eastern Europe and Central and South America, especially in Brazil.