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Automotive suppliers: The crisis is over, the fight continues.

Articles and interviews（https://autosap.cz/en/category/articles-and-interviews/）

2/10/2026 | Articles are machine translated

MOTOR JIKOV Group is currently not observing a significant decline in orders. It is also acquiring new significant projects, for example a large order in the field of towing devices. However, it expects a certain decline in traditional automotive programs in the future. | Photo: MOTOR JIKOV Group

Chip outages, broken supply chains and the energy shock have subsided. However, European automotive suppliers have not been relieved. Instead of one extraordinary crisis, they are now facing several long-term pressures at the same time: a weaker European market, high costs, uncertain orders, expensive investments in new technologies and increasing competition from China. Thus, the fight begins for Czech companies to see who can adapt to the new normal.

A few years ago, suppliers to the automotive industry were mainly dealing with supply chain disruptions, semiconductor shortages or soaring energy prices. Today, the situation is different. This is not a single extraordinary problem that will subside and allow a return to the old order. Suppliers must learn to function in an environment that will probably be permanently more demanding than before 2020.

This is exactly how this year’s Boston Consulting Group (BCG) 2026 Global Automotive Supplier Study describes the situation. According to it, the acute crisis phase is over, but suppliers have entered a structurally more difficult period characterized by higher financing costs, pressure on inputs, geopolitical uncertainty and changes in demand.

The European suppliers association CLEPA draws attention to the continuing pressure on profitability, and the German automotive industry association VDA to the postponement of investments and the limited willingness of companies to expand employment in Germany. Reuters has repeatedly reported on the restructuring programs of large European suppliers. According to CLEPA, European suppliers have announced more than 100,000 job cuts in the last two years. Bosch, Continental and ZF are restructuring, for example.

“The industry has moved beyond the acute crisis phase, but it is operating in a structurally more challenging environment. Higher interest rates, persistent cost pressure, a shortage of people, growing Chinese competition and volatile geopolitics are now a long-term reality, not a blip. That is the essential difference compared to 2021,” summarizes Petr Knap, an expert on the automotive industry.

Fewer orders, higher costs

Czech companies are also finding that good results for carmakers do not automatically mean good times for the entire supply chain. While vehicle manufacturers maintain high production volumes, according to AutoSAP data, supplier sales fell slightly last year and most companies simultaneously faced rising wage, energy and material costs.

Miroslav Dvořák, Chairman of the Board and owner of MOTOR JIKOV Group, is also Vice President and Vice Chairman of the Suppliers and Special Purpose Organizations Division of the Automotive Industry Association, so he knows the situation in the sector very well. He describes it as a combination of problems that multiply each other. “The European automotive market has still not returned to the level before 2020, while the costs of labor, energy, materials and financing remain significantly higher. For suppliers, this means pressure on margins, more complex capacity planning and a longer return on investment. So it is not one isolated problem, but a combination of several factors that reinforce each other.”

BRANO has a similar experience. Václav Juříček, a member of the board of directors of BRANO Group, points out not only the decline in vehicle sales in the EU, but also the intensifying competition in the entire supply chain. The pressure comes from above with the arrival of Chinese car manufacturers, which are pushing prices and margins down, but at the same time, due to the smaller European market, the fight between suppliers themselves is intensifying.

“A number of competitors from Germany and other countries have already entered insolvency and the situation of the European automotive industry will probably be worse. I do not remember such a number of ‘global sourcing’ of customers, i.e. relocation of ongoing projects from competitors primarily due to bankruptcy. We are of course benefiting from this event so far and these are business opportunities for BRANO, we will see how long it will last,” says Václav Juříček.

“A number of competitors from Germany and other countries have already gone bankrupt and the situation of the European automotive industry will probably be worse. I don’t remember such a number of “global sourcing” of customers, i.e. relocation of ongoing projects from competitors primarily due to bankruptcy. We are of course benefiting from this event so far and it is a business opportunity for BRANO, we will see how long it will last,” says Václav Juříček, member of the board of directors of BRANO Group.

The combination of declining or fluctuating orders and costs that do not move in the opposite direction is particularly unpleasant for companies. “Recalls and sales are decreasing year-on-year, while our variable and fixed costs are under pressure from significant inflation – whether it is materials such as steel, polymers or electronics, or energy, logistics, wages or software costs. We cannot ignore the influence of the strengthening crown and the impact of the exchange rate against the euro or dollar,” calculates Václav Juříček. According to him, frequent postponements or even cancellations of customer projects are also added to this.

The founder of BRANO and the chairman of the board of directors of the entire group, Pavel Juříček, collectively describes this combination of problems as a “deadly cocktail”.

BRANO Group, on the other hand, is seeing a decline in orders and sales, while costs continue to rise. However, it is also gaining new business opportunities by taking over projects from competitors that have gone bankrupt. | Photo: BRANO Group

The worst is uncertainty

The market downturn itself may not be the biggest problem. For an investment-intensive industry, unpredictability can be even more dangerous.

“Suppliers often do not know what volumes they can expect in a year, two or three years. This uncertainty subsequently results in pressure on prices, more complicated capacity planning and more difficult investment decisions,” says Miroslav Dvořák from MOTOR JIKOV.

At the same time, a company cannot simply stop investing. It must automate, robotize, digitize and prepare new production technologies, but at the same time it often does not have a sufficiently long-term outlook for orders or certainty about how quickly individual technological trends will prevail.

“Companies must invest even if they are not sure of orders.”

A typical example is electromobility. Suppliers have received and are still receiving orders and requirements for new projects for electric vehicles, according to which they plan capacities and invest. However, the European market for these vehicles is not growing as fast as originally expected. The supplier must therefore be prepared for technological change, but does not know exactly when and in what volume the new programs will start.

This is also a problem on a European scale. Some companies underestimated the emergence of new technologies, while others invested in electromobility capacities in anticipation of faster growth. If the originally planned volumes are not met, the return on investment is prolonged.

The caution of companies is also evidenced by VDA data. According to a survey published in June 2026, 67 percent of German suppliers said that they had to postpone, move abroad or cancel investments originally planned in Germany. Only a small percentage of companies plan to create new jobs in their home country. This is not necessarily a general departure of production from Europe, but rather a transfer of some investments to more competitive locations.

The value is moving elsewhere

At the same time, suppliers are not only concerned with how many cars will be produced in Europe. It is also changing which parts will be profitable in the future.

BCG expects a shift in value towards software-defined vehicles, power electronics, semiconductors, battery technologies and assistance systems. Traditional components will grow significantly more slowly and segments directly related to combustion engines will face a long-term downturn.

This means double pressure for traditional Czech suppliers. They must manage the current price and order battle, but at the same time invest in the competencies they will need in five or ten years.

The head of MOTOR JIKOV Dvořák recalls another simple structural change: an electric car has fewer components than a car with a combustion engine. “Depending on the type of vehicle, it can be up to tens of percent, in some areas around half. For suppliers, this means that they will have to look for new production programs, expand their technological competencies and diversify their customer portfolio more.”

Machining a metal shaft. | Photo: BRANO Group

Carmakers: Our requirements are fundamentally unchanged

An interestingly different picture comes from the other side of the chain. Large customers emphasize continuity above all. It is in their interest to have a stable supplier base, long-term relationships and to maintain contracted volumes and deadlines.

“Time is accelerating. Just as we have to be more flexible today, our suppliers must also react more flexibly,” says Petr Michník, head of the administrative division of the Hyundai Motor Manufacturing Czech car manufacturer. However, he does not consider this to be a fundamental change in the relationship between the car manufacturer and suppliers. According to him, new demands are increasing, for example, in the area of ESG (Environmental, Social and Governance – criteria for environmental impact, relations in society and proper management by the company). These reach deep into the supply chain and, especially for smaller companies, mean additional administrative and cost burdens.

Robert Kiml, president of Toyota Motor Manufacturing Czech Republic in Kolín, sees the situation similarly. “We have high demands on suppliers, but Toyota has always had that,” he says. According to him, good communication is key. Toyota has a supplier base made up of financially stable companies and does not expect the ongoing restructuring to fundamentally threaten supplies.

“Of course, over the past twenty years, we have encountered situations where a supplier has had difficulties, and there have also been cases where we have helped them financially to survive or to move production elsewhere. However, most suppliers today restructure without affecting the main customer. And we do not interfere in this,” adds Kiml.

However, from the suppliers’ perspective, the change is more noticeable. Miroslav Dvořák notes significantly higher customer demands for price, quality, flexibility and speed of response. Customers want shorter delivery times, smaller series and more frequent order changes, while also expecting 100% quality and long-term price stability.

“Previously, we had more stable and longer outlooks, today orders change more often and customers confirm their needs in a shorter time frame. Therefore, the supplier must be much more flexible while maintaining high productivity,” says Dvořák.

“Previously, we had more stable and longer outlooks, today orders change more often and customers confirm their needs in a shorter time frame. The supplier must therefore be much more flexible and at the same time maintain high productivity,” says Miroslav Dvořák, CEO of MOTOR JIKOV Group.

The crisis has also brought about greater partnership

Not all changes in the relationship between automakers and suppliers are negative. The head of the Czech Schaeffler, Lukáš Rosůlek, points out that Covid has paradoxically brought both parties closer together: “Covid represented a big change. The disruption of supply chains brought much greater openness and flexibility. Our customers started to listen to us more, they started to see us more as partners.”

Closer cooperation is also related to the technological transformation of the automobile. The original suppliers of mechanical parts are often becoming system suppliers who also deal with the connection with the vehicle’s software architecture or cybersecurity issues. At the same time, according to Rosůlek, the pressure for maximum quality has increased significantly.

How to get out of this

The companies’ responses have several common denominators: cost reduction, automation, greater production flexibility, in-house development and, above all, diversification.

BRANO, for example, continues to invest in product and production process development and focuses on products with a high share of its own intellectual property, which it can offer to more customers in different markets.

“We apply the ‘global but local’ approach – a locally produced commodity with the same quality of services in all key automotive markets. This approach has proven itself to us so far,” says Václav Juříček from BRANO.

The company is also developing standardized modular production facilities. Although these are more investment-intensive, their advantage is the possibility of using them for a wider product portfolio. If the customer reduces recalls or cancels the project altogether, the production facility is not so closely tied to a single order.

“It’s a long haul and it’s not easy to graft this philosophy onto a wide range of our technologies, however, we are relatively successful with our core production technologies and some applications are already bringing the desired effect in the form of new business or secondarily used investments,” adds Václav Juříček.

“Businesses cannot solve everything on their own, says Miroslav Dvořák.”

Diversification is also one of the main topics for MOTOR JIKOV Group. According to Miroslav Dvořák, the company is currently not observing a significant overall decline in orders and is also winning new significant projects, such as a large order in the field of towing devices. However, it expects a certain decline in traditional automotive programs in the future.

It is therefore looking for new opportunities in expanding its customer portfolio, outside of traditional automotive programs and in orders with higher added value.