Photo: Taylor_B via flickr
A recent survey out of UBS paints a mixed picture for U.S. auto suppliers.
They polled 162 suppliers and found only 59% guiding for profitability over the coming 12 months, down from 63% in Q2. However, 29% are expecting double-digit earnings growth.
U.S. suppliers are experiencing tailwinds from the Japanese earthquake and tsunami as manufacturers look to reduce their reliance on Asian suppliers. Global operations at many automobile manufacturers ground to a halt this March when it became difficult to source electronic, safety, and engine equipment from the region.
Other points from the quarterly report:
- 24% of suppliers say consolidation is a company priority this quarter, down from 38% in the third quarter of 2010.
- 20% of suppliers are concerned that they are not ready to meet new fuel economy standards, leaving an opportunity for other suppliers to take market share.
- 2% of suppliers believe they would face bankruptcy if the seasonally adjusted annual rate of sales fell to 10-10.5 million.