According to the Q4 2020 OESA Automotive Supplier Barometer IndexTM (SBI) – a gauge to measure the sentiments of North American automotive supplier executives – continued strength in light vehicle production volumes bolstered suppliers’ 12-month industry outlook vs. three months earlier. Results posted a strong positive reading of 67 for the period, 17 points above a neutral level of 50. The headline index increased 14 points from the third quarter and soared 52 points from the second quarter when the brunt of the pandemic was most acute.
The Q4 2020 OESA Supplier BarometerTM, sponsored by RSM US LLP, focused on Capital Markets & Innovation. The results indicate:
- Continued issues related to the COVID-19 pandemic remain the greatest threat to the industry, however threat ratings continued to ease from the second quarter.
- Production volumes are expected to be slightly above the volumes needed to break-even this year.
- Suppliers, on net, will require more capital for product innovation for next year, as the industry continues to offer its customers the latest technologies that end users are demanding.
- A majority of suppliers are confident with their pace of innovation, as 73% of respondents indicate they are at least on pace with the industry, while 44% believe they are ahead of the industry.
“Even as suppliers align costs and capital expenditures to a new market reality, leading firms recognize the importance of innovation in offsetting the impact of lost production volume,” said Mike Jackson, executive director, strategy and research, OESA. “Nearly 85% of supplier responses affirmed that their company’s capital structure supports innovation objectives, which increasingly fosters collaboration with external partners including suppliers, material producers and customers. Given the dynamic nature of the global automotive industry, suppliers are shrewd to utilize a range of innovation strategies and adapt approaches to suit specific customers and technologies.”
The Q4 SBI chart and a full copy of the Supplier Barometer results are available on the OESA website at:
CLICK HERE to view the RSM US LLP commentary on the Q4 2020 OESA Supplier Barometer results.