The balance of power in the global automotive supply chain is shifting rapidly towards China, according to a new Strategy& study that also underlines the growing strain on Austria’s parts makers.
The PwC-owned consultancy says Asian companies already accounted for 49% of the world’s automotive supplier market in 2025. The standout change has been the rise of Chinese firms, whose share has climbed from 5% in 2015 to 14%. Over the same period, German suppliers slipped fro...
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m 26% to 23%, while the rest of Europe fell from 14% to 13%.
The contrast with vehicle manufacturers is sharp. Strategy& found that the ten largest carmakers increased revenues by 10% in 2025, while sales at the world’s 100 biggest suppliers declined by 3%. The consultancy said the divergence reflects weaker demand, high costs, heavier administrative structures and legacy financial burdens weighing on suppliers, particularly in Europe.
Pressure is most acute for large system integrators, whose average EBIT margin stood at 4.1%, well below the 8.3% recorded by the other top suppliers in the study. Henning Rennert, a partner at Strategy& Germany, said a new competitive class has emerged in Asia, especially in China, combining advanced technology with speed and flexibility.
The report also points to a widening gap in productivity and profitability. German suppliers, despite investing the most in research and development among the regions studied, posted only a 5.2% average EBIT margin, alongside the Americas at the bottom of the rankings. Chinese suppliers, by contrast, achieved an 8.4% margin with lower R&D intensity, while other European suppliers performed best overall, with a 10.2% margin.
For Austria, the broader trend is already visible in hard numbers. The country’s automotive supplier industry has been under severe strain for more than a year. In 2024, revenue in the sector fell 9.2% to €28.41bn, with about 5,000 jobs lost, including agency workers. At the end of that year, employment stood at 76,900.
The restructuring has continued into 2026. AVL List has announced further cuts of about 350 jobs, while ZKW is affected by 600 redundancies. Insolvencies at Eitek and Wollsdorf Leder have added to the pressure. Magna Steyr’s workforce has also shrunk as production volumes have declined, although Magna in Graz has recently seen a turnaround as Chinese carmakers including GAC and Xpeng have begun final assembly of some models there.
Strategy& argues that high research spending alone is no longer enough to secure competitiveness. It says European suppliers need faster cost and capacity adjustments, leaner organisations and deeper investment in key technologies. The consultancy also calls for closer cooperation between carmakers and suppliers, especially in autonomous driving, where it sees scope to pool capital, technical expertise and development know-how.
Rennert said the window for German manufacturers and suppliers to catch up is narrowing, though not yet closed. Established players, he said, still hold substantial strengths in mechanics and mechatronics, but those capabilities will need to be linked much more tightly with software, electronics and other new technologies.
Source: Noah Wire Services
