KPMG Automotive Related Rubber – COI Review
Want and edge when it comes to Automotive related to rubber? Attached is the latest installment of our Monthly Automotive Health Monitor, which provides an overview of ongoing trends and news in the industry.
Notable insights from this installment are as follows:
- Automotive OEMs (e.g., GM) as well as suppliers (e.g., Bosch) continue to face supply chain disruptions worldwide owing to chip shortages in Q1’2021, leading to limited production of vehicle parts requiring semiconductors (e.g., emergency braking systems), plant shutdowns, and reduced vehicles and parts production
- Global OEMs may face margin pressure due to the rise of key raw material prices (e.g., HRC steel, copper, platinum, rubber), in the near-term
- Amid the EV transition, traditional automakers (e.g., Ford) are increasingly collaborating with tech giants (such as Google) to provide enhanced Auto 2.0 (electrification, autonomy and connectivity) solutions
- Additionally, US OEMs (e.g., GM) may benefit from government initiatives for vehicle electrification and domestic manufacturing
- On the supplier front, the increased likelihood of direct semiconductor sourcing by global automakers (e.g., VW) to tackle production disruptions may unfavorably impact auto suppliers pertaining to chip-related components
- With the rising focus on sustainable and more efficient vehicle components, vehicle part makers (e.g., Continental) continue to implement the use of substitute materials (e.g., structural plastic)
- On the US automotive dealers end, growing consumer preference for light trucks/SUVs has led to automaker emphasis on high-margin cars and discontinuation of certain sedan models by global OEMs (e.g., Kia)
- Amid the pandemic, factors such as reduced vehicle miles driven and the increase in the number of people staying at home may decrease the need for daily commute and new vehicle purchases
- Automotive part retailers (e.g., O’Reilly) could witness a rise in DIY sales driven by factors such as government stimulus
I’m also attaching the latest economic analysis from KPMG. I hope that you find this information useful.