Restart under pressure: Many suppliers are looking for alternatives to the automotive market

Decline in the combustion business and immediate consequences

The study is based on telephone surveys conducted in late summer 2025. FTI-Andersch commissions these surveys to gain an understanding of the mood and priorities within the industry. For automotive suppliers, the current survey provides a clear picture: structural change is affecting the industry broadly, deeply and simultaneously.

Diversification as a survival strategy

The answer to the question about strategic alternatives is particularly revealing: 79 per cent of suppliers who feel directly affected by the change are now also focusing their business on other industries. The most frequently mentioned are defence (25 per cent), energy (16 per cent), aviation, medical technology and rail (9 per cent each).

Competition from China – passivity is not an option

Parallel to structural change, competitive pressure from Chinese OEMs is growing. The study paints a clear picture: 83 per cent of automotive suppliers consider cooperation with Chinese manufacturers to be at least difficult, with 47 per cent even considering it ‘very difficult.’ Only a quarter of suppliers are actively establishing sales structures in China, and even fewer are specifically adapting products for Chinese OEMs.

Hesitant use of AI

Another focus is on technological adaptations. Although 89 per cent of suppliers use AI applications, they are predominantly used in the area of generative tools such as text, image or presentation creation. There is reluctance when it comes to specific production-related applications: only 51 per cent use artificial intelligence in quality assurance, and only 32 per cent in predictive maintenance.

Financial and structural burdens

In addition to market and technology issues, financial hurdles are also weighing on companies. 28 per cent report difficulties in accessing credit – the highest figure compared to the other industries surveyed. At the same time, there is a growing trend towards insourcing by OEMs: 17 per cent of suppliers are already affected, and a further 38 per cent expect this development in the future. For many companies, this means a double burden – structural change in the market and, at the same time, the risk of losing orders from existing customers.

For die casting foundries and their suppliers, whose business models are traditionally closely linked to the automotive structural tree, the study has two immediate implications: Firstly, it ///confirm/i/i/is the continuing decline in the classic combustion engine market. Secondly, it shows that many of the industries into which suppliers are expanding also require casting-intensive structural components. Whether in medical technology, the energy sector, aviation or rail transport, new fields of application are emerging that differ significantly from automotive cycles and requirements. This opens up new opportunities for the industry if the specific requirements are properly understood.