1Q 2021 Automotive Supplier Barometer: Optimism Prevails in the Face of New Challenges
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OESA Automotive Supplier Barometer:
Optimism Prevails in the Face of New Challenges
Southfield, Mich. (March 3, 3021) - According to the Q1 2021 OESA Automotive Supplier Barometer Index (SBI) – a gauge to measure the sentiments of North American automotive supplier executives – continued strength in light vehicle demand offset the negative impact of component and raw material shortages that is impairing suppliers' ability to fulfill customer volumes. Results posted a positive reading of 62 for the period, 12 points above a neutral level of 50. The headline index decreased five points from the fourth quarter of 2020 but remains strong.
The Q1 2021 OESA Automotive Supplier BarometerTM, sponsored by RSM US LLP, focused on Production, Planning and Electrification. Results indicate:
- Continued issues related to the COVID-19 pandemic remain the greatest threat to the industry, however these threat ratings continued to ease from the end of 2020.
- The primary internal and external production issues are related to supply chain constraints or disruptions.
- Shortages of inputs, particularly semiconductors, are hampering the ability of the supply base to meet customer production schedules.
- The industry continues to struggle with labor shortages in both blue and white-collar positions.
- R&D spending is unchanged from last year, remaining at 4% of total sales. The advanced material technologies category remains the top priority for future investment, with powertrain technology becoming a much higher priority compared to last year.
- Battery Electric Vehicle (BEV) program development is driving innovation across the supply base despite the lack of program profitability. Suppliers remain doubtful that BEV production will reach 10% of global production within the next five years.
"Suppliers continue to demonstrate exceptional resilience despite another wave of adversity, in the form of semiconductor and supply chain constraints. Suppliers are optimistic that ongoing demand levels will help negate current production shortfalls, particularly in the second half of 2021,” said Mike Jackson, executive director, strategy and research, OESA. “Given dramatic increases in global BEV investments and program opportunities, leading suppliers continue to take steps to understand ways they can capitalize on this shift, despite program profitability hurdles,” Jackson said.
The Q1 SBI chart and a full copy of the Supplier Barometer results are available on the OESA website at: https://www.oesa.org/resource/oesa-automotive-barometer-studies.
CLICK HERE to view the RSM US LLP commentary on the Q1 2021 OESA Supplier Barometer results.
About the OESA Automotive Supplier Barometer
The OESA Automotive Supplier Barometer captures the pulse and analyzes the twelve-month business sentiments of top executives in the supplier industry. It is a quarterly survey on commercial issues, the business environment and strategies that influence the supplier industry. This Barometer is distributed to vehicle manufacturers, financial institutions, governmental officials and the media to provide an on-going profile of supplier industry trends.
The Original Equipment Suppliers Association’s mission is to champion the business interests of automotive original equipment (OE) suppliers. Since 1998, the Association has been addressing issues of common concern and advocating on behalf of the supplier community throughout the supply chain and in Washington, D.C.
OESA is one of four divisions of the Motor & Equipment Manufacturers Association (MEMA). All divisions are represented by MEMA’s advocacy and emerging technology expertise. For additional information, visit http://www.oesa.org.
About RSM US LLP
RSM US LLP is the leading provider of audit, tax and consulting services focused on the middle market, with nearly 10,000 professionals nationwide. It is a licensed CPA firm and the U.S. member of RSM International, a global network of independent audit, tax and consulting firms with more than 41,000 people in 116 countries. RSM uses its deep understanding of the needs and aspirations of clients to help them succeed.
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Jeff Laskowski | Senior Manager, Communications
Original Equipment Suppliers Association | oesa.org
O: 248.430.5951 | firstname.lastname@example.org
25925 Telegraph Road, Ste. 350 | Southfield, MI 48033-2553
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