double interview
The start of 2020 saw a massive drop in vehicle sales, a double-digit percentage fall due to Covid. So for example, in the first two quarters an average of 35% fewer vehicles were sold in Europe than in the equivalent quarter in 2019.
The world’s largest automotive suppliers generated 11% less turnover than in the previous year.
Operative profit also fell substantially and stood at around -8% in the second quarter. OEM business development showed a similar picture during the same period. Since autumn 2020 we have been experiencing marked signs of recovery in the supplier industry. Both turnover and profits were gaining considerable momentum by the end of the year; some profits with a double-digit percentage. We are expecting a recovery for the period between 2023 and 2026, reaching the levels of the pre-crisis years 2018 and 2019, boosted by the growth in South Asian and South American markets. China and Europe will remain the largest markets by far, but with substantially smaller growth rates.
All this has sharpened the trend towards a two-tier society. The big players are quickly returning to their previous profitability and good growth rates, while the mid tiers get left behind.
Indeed. A majority of suppliers reacted early in the first quarter of 2020 when the first signs of the crisis were coming from China, along with the associated falls in sales. Either performance programs which were already running had their requirements sharpened up, or new programs were launched at short notice.
Suppliers’ austerity programs focused mostly on indirect areas and concentrated more on increasing their efficiency. The focus was on optimizing business procedures supported by automation, as well as adapting organizational structures in central areas. Not infrequently, potential efficiencies in double-digit percentages were identified during the crisis and prepared for implementation. We are expecting to see the full effectiveness and visibility of these in the German supplier industry in the next two years.
The pandemic has highlighted global interdependence alongside automotive added value and the importance of robust supply chains. Not infrequently, OEMs have to coordinate more than 10,000 direct suppliers in more than 50 countries, a task which has become considerably more challenging in the context of the past year.
Production stops caused by Covid have severely shaken the OEM’s fragile supply chains, followed by a gradual acceleration lasting several weeks. We are anticipating that OEMs will invest 20 to 30 percent more in their supply chain excellence in the next few years. This will include AI-supported optimization of supply chains in order to improve transparency throughout all stages of the value chain and make a contribution to sustainability. This is becoming more important, as sustainability is a critical factor in the purchasing decisions of more than half of all customers.
The increased use of AI in supply chain management by OEMs also requires active participation on the part of the suppliers, as for example in the carrying out of self-assessments. We are also anticipating that suppliers will make increasing use of tool-supported solutions to master the complexity of global supply chains.
The Best Owner Group is taking an interesting approach to manage the transformation of selected German suppliers in an ordered and structured way. By streamlining activities in the traditional drivetrain area, efficiency and volume models can be realized and this is intended to give both hard hit suppliers and investors potential returns of 12 to 15 per cent.
Unfortunately, for over a year now we have only got as far as announcements. Above all, the tension between investors for the fund and the (IG Metall) employers’ interests is yet to be solved. It is also unclear how a business which suffers from continual market decline is supposed to generate such high long-term returns. Moreover, the structuring of the fund as “evergreen” – so that no companies from the portfolio are sold, is a high risk in such a market field. Who invests money in a sinking ship, even if it is going down very slowly? If the “funding” does not come to fruition in the coming months, the Best Owner Group will get off to a false start.
The big tech players such as Google, Apple, Microsoft or Nvidia, have already installed their software solutions in a large number of vehicles. Interest is continuing to increase due to the growing importance of automotive off-board software. The value of software amounts to just about 700 euros per average vehicle, and by the year 2030 this will rise to over 2,500 euros, three quarters of which will be generated in the off-board field. As well as the Californian tech giants, Chinese players such as Huawei and Baidu, and the Korean electronics entertainment companies Samsung and LG are entering the “software-defined car” market.
However, tax rates are not the problem when it comes to equal opportunity. It is true that in 2020 the three tech players Apple, Alphabet (Google’s parent company) and Microsoft are only paying between 14.4 and 16.5 per cent income tax, whilst Volkswagen, Daimler and BMW are contributing taxes of between 24.4 and 36.8 per cent of their taxable income. The three German OEMs together would have a higher profit of only around 3 billion euros at a tax rate of 15 per cent. The real problem lies in the pre-tax result, i.e. in the profit itself, not in the taxes. The tech giants are simply much more profitable. They draw an almost 6 times higher pre-tax result than the three German OEMs: 28.1 per cent as opposed to 4.8 per cent. Pre-tax profit for Apple alone is more than double that of the three German OEMs put together.
Hitachi Astemo, created from a merger between Hitachi Automotive Systems, Keihin, Showa and Nissin Kogyo, is a new leading supplier which will certainly appear in the top 20 for the year 2020. Its focus is very clearly the Japanese OEMs, above all Honda (which holds a third of the shares), as well as Nissan, Mitsubishi, Mazda and Subaru. European or North American customers are so far hardly represented. However, the new company has good opportunities in the field of e-mobility in Europe (traction motors, lithium ion cells and battery modules, water pumps and inverters) and autonomous driving (ADAS control devices, camera systems incl. object recognition). Hitachi has for example supplied the inverters for both the Audi e-tron and the Porsche Taycan. But beyond that further scope is unknown.
Delphi sold its “Powertrain”/motor business including e-mobility activities to Borg Warner three years ago for around $3.3 billion. Aptiv’s spin-off, completed in 2018, has been an outstanding development: they were able to double their share price, their market capitalization stands at around 40 billion euros, and all financial figures have improved. Aptiv is a success story. And yes, it serves as a role model for other automotive supplier companies. In the same period, Continental’s market capitalization has fallen by 35 per cent, its returns have dropped and Conti has lost its long-standing position as the second-largest supplier in the world to Denso. The legal spinning-off of Vitesco does mean that a first step has been taken; however Vitesco is still a part of Continental.
The German suppliers in particular are going to have to follow suit, in order to separate themselves from the classic combustion engine business, and focus on the forward-looking CASE business. So far the large European supplier companies have been much too hesitant in their transformation. Valeo, Bosch, ZF, Mahle, Faurecia or Benteler ought to tackle this in a similar way to Aptiv: on the one hand a clean break from the powertrain business, and on the other hand a focus on future business.
China’s classic players, such as Weichai, Huayu, BHAP, NBHX, Joyson or Yangfeng, will be expanding their European presence step by step in the fields of powertrain, interior or vehicle electronics. However, much more interesting are the new players in the Car OS Operating System (e.g. Huawei Harmony OS), connected services (AliPay and Tencent Integration), autonomous driving (Baidu), e-mobility components, V2X, vehicle platforms and contract manufacturing (Foxconn with the MIH EV platform).
Chinese OEMs will also be increasing their export to (Western) Europe in the coming years and expanding their activities in these markets; how far the Chinese suppliers do the same should be monitored attentively. In China itself, suppliers like Bosch, Conti and ZF must take care not to be overtaken. For this reason they must increase their local activity in the short and medium term and build up local know-how and capacities, especially in the fields of connectivity and autonomous driving. The Chinese government is focusing on “intelligent connected vehicles”, and so interesting opportunities are arising.
Berylls Strategy Advisors would be happy to support you in this key decision process.
Arthur Kipferler complements the expertise of the Berylls partner team in the fields of market & customer, technologies, sales, and digitalization, as well as in the development and implementation of corporate, product, and regional strategies.
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Berylls Strategy Advisors GmbH
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80539 München
Germany
Phone +49 89 710 410 40 – 0
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c/o The Drivery
Mariendorfer Damm 1
12099 Berlin
Germany
Phone +49 30 217 82-116
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London, SW1Y 4JU
United Kingdom
Phone +44 73 8080 1960
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6340 Baar
Switzerland
Phone +41 41 763 04-00
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[/vc_column_text][vc_column_text]As a career starter at Berylls Strategy Advisors you can develop yourself from consultant to associate and senior associate, right up to principal and partner. An experienced expert will mentor you personally and will always be glad to see you reach the next level.
If not, we regard that as a personal decision, because, as we said, we don’t have a strict up-or-out principle. Accordingly, we have a very large midfield. This strength at the centre with our senior associates gives us a lot of know-how and strength in the teams and allows our customers to rely on excellent results the Berylls way.
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[/vc_column_text][vc_column_text]As a Partner you are responsible for the entire business relationship with one or more customers. You also represent a specific subject area of Berylls – e.g., Digital Strategy, Sales/After Sales Strategy, M&A or Organization Development. You also continue to play an important role in the daily project work: as an expert you are closely engaged with our project teams, optimally networked with the clients and their management, and you visibly bear responsibility.[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]
[/vc_column_text][vc_column_text]As a Principal you are responsible for customers and larger projects or for the management of multiple projects in parallel. You are an important liaison for our clients at their locations. You also contribute towards the business development of Berylls and to the development of new customer relationships and are responsible internally for a specific subject area.[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]
[/vc_column_text][vc_column_text]As a Senior Associate you assume responsibility as a classical project manager for whole projects and their teams. You interact closely with our customers and structure the work packages for Associates, Consultants, and interns. You are also responsible for internal tasks, e.g., in the further development of our intellectual capital.[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]
[/vc_column_text][vc_column_text]As an Associate you are responsible for smaller projects or individual modules of larger projects. Alongside the substantive work, you are also responsible for Consultants or interns and your initial engagement in internal task areas contributes to the further development of Berylls.[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]
[/vc_column_text][vc_column_text]As a Consultant you are responsible for individual work packages in our consulting projects. This could involve market, customer and competition researches or workshop preparations, quantitative modelling or the preparation of presentations. You will be supported from the start by experienced Berylls to ensure a steep learning curve. [/vc_column_text][vc_empty_space height=”20px”][vc_btn title=”View all jobs” style=”custom” custom_background=”#ee754f” custom_text=”#ffffff” shape=”square” link=”url:https%3A%2F%2Fberylls.jobs.personio.de%2F%23company-4330|target:_blank”][/vc_column_inner][/vc_row_inner][/vc_column][/vc_row]
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[/vc_column_text][vc_column_text]Various entry options are open to you as a career starter at Berylls Digital Ventures. We believe in the strength of cross-functional teams to develop products, design business models, attract investors and thus sustainably improve the automobility industry. Because major challenges often demand special motivation. Our product and venture teams also perform so well because they are standing on the shoulders of all the necessary disciplines: these disciplines include venture architects and business developers who assume the business perspective, as well as technical specialists for concept, design and data science, right up to full-stack software development – all roles contribute directly to the success of our ideas. The further development within your discipline follows our clearly defined specialist track from specialist to senior specialist right up to lead specialist. An experienced colleague from the same discipline, the respective Head of Product/Ventures/CTO or a partner will mentor you personally and will always be glad to see you reach the next level. The respective requirements for your application are set out in our open job offers.
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[/vc_column_text][vc_column_text]As Partner you are responsible for the successful further development of Berylls Digital Ventures. You represent Berylls Digital Ventures with respect to our customers, cooperation partners and investors. For this purpose you have a comprehensive and robust contact network. In addition, you form the interface to other business fields of the Berylls Group.
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[/vc_column_text][vc_column_text]Within your area you are the central contact partner for our investors, customers, teams and cooperation partners. You actively pursue new business relationships and thus contribute towards the steady further development of Berylls Digital Ventures. In addition, your expertise makes you an important sparring partner for individual product or venture teams.
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[/vc_column_text][vc_column_text]As a Lead Specialist, you support our teams with experience and advice, and help wherever necessary with ground-breaking professional decisions. In addition to this, you are responsible in close coordination with a Head of Products / Head of Venturing or Partner for the further development of your specialist team. With your experience, your engagement, and your integrative leadership style, you make an active contribution towards the steady further development of Berylls Digital Ventures, our products, and ventures.
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[/vc_column_text][vc_column_text]As a Senior Specialist, you are responsible within a product or venture team for all deliverables of your discipline and oversee the work of junior employees. Wherever interdisciplinary work is required, you are the first contact partner for your colleagues, and find solutions to advance your product or venture to the maximum in a professional and pragmatic manner.
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[/vc_column_text][vc_column_text]As a Specialist, you support our product or venture teams in your respective discipline. Personal initiative and independent working play a major role here from the start, which you demonstrate alone and in collaboration with an experienced colleague.
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[/vc_column_text][vc_column_text]As a career starter at Berylls Mad Media, you can proceed from Analyst to Consultant, Associate and Senior Associate up to Principal and Partner. We believe in the strength of cross-functional teams to develop our products and services and thus sustainably improve the transformation of the marketing and sales function of the automotive industry. Therefore, we offer several tracks to develop you into an expert and evangelist who is recognized as such by our customers and whose know-how is highly valued. These tracks include Customer Experience & Service Design, Data-Driven Marketing, Agile Organisational Design, Analytics & BI, MarCom as well as Tech & Architecture. An experienced colleague from the same discipline or a Principal/Partner will mentor you personally and will always be glad to continuously accompany your development.
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[/vc_column_text][vc_column_text]As a partner, you are responsible for the successful development of Berylls Mad Media. You represent Berylls Mad Media to our customers, cooperation partners, and stakeholders. For this purpose, you have a comprehensive and resilient network of contacts. As an expert, you stand for deep know-how in the field of digital transformation of sales and marketing, interacting closely with our project teams and taking visible responsibility.
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[/vc_column_text][vc_column_text]As a Principal, you are responsible for the operational business of our product and service development. Within this area, you are a central point of contact for our customers, teams, cooperation partners, and stakeholders. With your industry expertise, you will be a sparring partner for the individual product or program teams and actively contribute to building new business relationships.
[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]
[/vc_column_text][vc_column_text]As a Senior Associate, you will take responsibility for entire projects and their teams. In doing so, you will interact closely with our customers within the scope of your professional specialization and lead the customer team. Additionally, you are responsible for further development within your specialization in close coordination with a Principal/Partner. Through your experience, commitment, and integrative leadership style, you will actively contribute to the continuous development of Berylls Mad Media, our products, and our services.
[/vc_column_text][vc_empty_space height=”15px”][vc_column_text]
[/vc_column_text][vc_column_text]As an Associate, you will take responsibility for sub-projects, individual modules of larger projects as well as the deliverables within cross-functional teams in your subject area. Where interdisciplinary work is helpful, you are the first point of contact within your specialization and develop solutions. You take responsibility for topic areas, lead junior Berylls in terms of content and thus support the continuous development of Berylls Mad Media, our products, and services.
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[/vc_column_text][vc_column_text]As a Consultant, you take responsibility for individual work packages within the scope of your specialization and support our cross-functional teams in developing highly relevant solutions for our clients. You are an expert on your sub-areas and the first point of contact for experienced colleagues and customers. You will continuously develop yourself and take responsibility within the team to further develop the products and services of Berylls Mad Media.
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[/vc_column_text][vc_column_text]As an Analyst, you support our cross-functional teams and take on tasks independently. You will be supported right from the start by experienced Berylls to ensure a steep learning curve. In doing so, initiative and independent work play a major role right from the start, which you will demonstrate alone and in cooperation with experienced colleagues. You develop yourself and support the development of products and services at Berylls Mad Media.
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[/vc_column_text][vc_column_text]As a career starter at Berylls Equity Partners you can develop yourself from Investment Analyst up to Investment Director and Partner. An experienced Partner or Investment Director will mentor you personally and will always be glad to see you reach the next level. Our unique and specialized positioning also ensures, however, that we can only give a few select applicants this opportunity. We are mainly looking for hand-picked professionals with broad experience in this business. Our internal structure gives our portfolio companies and our anchor investors the certainty that we can achieve a successful financial, strategic and operative realignment.
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[/vc_column_text][vc_column_text]As Partner you are responsible for the successful further development of Berylls Equity Partners. You represent Berylls Equity Partners with respect to our customers and network partners. For this purpose, you have a comprehensive and robust contact network that you use to ensure a constantly attractive deal flow, the optimum support of our portfolio companies as well as a value-maximizing exit. In addition, you are responsible for the support of our investors, and form the interface to other business fields of the Berylls Group.
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[/vc_column_text][vc_column_text]As Investment Director you are responsible for the respective project in close cooperation with the Partner Team. You are the primary contact person at the interface to the seller or buyer side in our transactions. After a successful transaction you accompany companies during the holding period, and then ensure a successful exit process. With your engagement you contribute towards the development of new customer relationships.
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[/vc_column_text][vc_column_text]As Investment Manager you are independently responsible for larger subject areas (e.g. due diligence, company valuation, financial analysis, business plan compilation) and systematically develop into a project manager.
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[/vc_column_text][vc_column_text]As Investment Associate you are responsible for individual work packages in all our thematic areas and develop a holistic view of our investment business.
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[/vc_column_text][vc_column_text]Als Investment Analyst you support us in all areas of our investment business: in the acquisition of companies, in the strategic and operative management of our portfolio companies, and in the sale of companies.
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