Global Automotive Supply Chain Outlook

The automotive sector plays an essential role in the global economy; it accounts for 5.7% of the economic output and more than 7% of the exported goods. In addition, the sector is the second-largest consumer of steel and aluminum among end-markets.

The global automotive supply chain is an interconnected ecosystem with production plants spread across different locations in Asia, Europe, North America, Latin America, the Middle East, and Africa.

Further, this mature industry has been amid a technological revolution with the emergence of autonomous vehicle (AV) technology, electric vehicles (EVs), and hybrid propulsion technologies. This revolution has caused leading original equipment manufacturers (OEMs), such as GM and Volkswagen, to pour billions of dollars into the development of new technologies and supply chains to support their ultimate mainstream production.

The breakdown of traditional trade agreements and production policies has created obstacles for global trade. The pandemic has caused additional challenges, and it has restricted global travel and the free flow of goods.

Reacting to the challenges faced, OEMs and suppliers have looked for creative solutions to solve global and regional supply chain challenges. A few remedies being pursued are:

• Alternative sources for goods and services
• Shortened supply chains
• Utilizing mergers and acquisitions (M&A) strategies to control important aspects of the supply chain

This report explores the challenges and solutions in managing a global supply chain and how M&A can be an important tool in a company’s arsenal to address these changes.