Abstract
In addition to the rocketed oil prices and triggered by the sub-prime mortgage in the US, almost every industry has been hit. Costs are rising for companies especially for the automotive industry which use a lot of energy and fuel. The industry was focused on rising oil prices, emissions control and the price of steel.
Inflations and prices of cars were rising, and revenues were falling. This coupled with people worried about their finances, has lead to virtually no-one buying cars. Companies have seen their annual sales collapsing and had to take some initiative to compensate for the crisis.
Today, the situation of the automotive industry is unprecedented. As global stock markets plunge and consumers confidence dips to historic lows, light vehicle sales in almost all regions continue to slide. For the mature markets, especially in Western Europe and of course in the U.S, the decline in sales has been very sharp. Major factors for this decline include a lack of cash and financing sources, placing severe pressure on suppliers and dealers.
This situation, in turn, increases the risk to Original Equipment Manufacturers (OEMs), like the German Bosch or the French Valeo, that suppliers may fail and production may have to stop. With credit increasingly more expensive and difficult to get, these financial tensions will likely continue to affect the entire industry, from consumers of the end product to dealers, OEMs and suppliers.
