According to a new study released by corporate-advisory firm AlixPartners, no less than 38% of all auto suppliers in North America are in "fiscal danger”, meaning that they could face insolvency within 24 months or less unless they take urgent counteractive measures. It also claimed that 24% of all suppliers globally face the same danger. That would be in addition to the $60 billion in major supplier bankruptcies in the US alone since 2001.

The study looked at 104 automotive suppliers, 22 automakers, 18 heavy-vehicle producers and 32 automotive conglomerates world-wide, and measured and compared them across a wide range of financial and operating metrics. Among other findings, the study revealed that a pronounced divergence is taking place between top-performing OEMs and suppliers and those in the lowest-performing quartile; that the Chinese automotive market has cooled off to such a degree that a big shake-up is most likely brewing there; and that auto suppliers, in particular, need to do much more than what they have done to date to accelerate cost reductions, improve working capital and better manage product innovation if they want to stay competitive.

The study also notes that in 2005 the bottom 25% of suppliers world-wide experienced a significant deterioration in financial performance, with earnings before income tax falling 4.4 percentage points, to a negative 0.1 per cent—whereas for suppliers in the top-performing quartile it actually increased by 0.8 percentage points, to 9.2%.