“So all suppliers must focus on achieving the best possible cost structure, even those who have been able to get price premiums because of their technology leadership,” he said.
A full 75 percent of suppliers surveyed said industry changes will make conditions harder. And 57 percent expect more bankruptcies, especially for medium-sized and small parts makers.
Respondents expect consolidation in the supplier industry to continue. The value of mergers and acquisitions in the sector will be the same or greater this year, 86 percent of respondents said. That’s up 10 percentage points from a year ago.
By a 3-1 margin, parts makers said supplier-OEM relations deteriorated in 2007. But those expecting an improvement in the future rose to 25 percent from 19 percent a year ago.