Interattivo
As volatility has become the norm for the automotive industry, it has upended traditional profit margin dynamics. For two decades leading up to 2019, automotive suppliers’ EBIT margins were on average 1 to 2 percentage points higher than those of original equipment manufacturers (OEMs). Then came massive supply chain disruptions with the Covid-19 pandemic and global chip shortage, plus higher raw material and energy prices, and now rising borrowing costs and wage bills due to inflation. Automotive OEMs were able to ride out the supply shortage by focusing production on the highest-margin models and raising prices, but suppliers had no such strategic options.
We’re tracking the EBIT margins of the top 15 OEMs and top 100 suppliers worldwide, and each quarter, we publish the latest trends in this dashboard.
Here are some of the key takeaways through the third quarter of 2025:
- OEM margins continued to decline in the third quarter of 2025, reaching 3.9%—down nearly 60% from their 2021 peak and now well below pre-Covid levels. This marks the fifth consecutive quarter in which supplier margins outperformed those of OEMs, extending the reversal that began in 2024.
- OEM margins are being squeezed by softening demand, intensifying price pressure, and persistently high financing and input costs. Uncertainty around the pace of electric vehicle adoption continues to weigh on profitability as OEMs bear the cost of running parallel portfolios of both EV and internal combustion engine products. Many are expanding performance and cost-reduction programs to protect profitability—initiatives that are increasingly felt by suppliers.
- Supplier margins have rebounded after dipping earlier in the year, averaging 6.4% in the third quarter. While still exposed to higher input and financing costs, most suppliers benefited from easing raw material prices and steady demand. Strong results in the semiconductor and battery segments helped lift the overall average, even as traditional component suppliers continued to face tighter margins.
- When we first warned of a looming “perfect storm” of pressures on automotive margins in 2022, few in the industry were prepared for what was coming. That hurricane of cost, demand, and policy pressures is now in full force. Both OEMs and suppliers have no time to lose to strengthen the resilience of their business models by accelerating structural cost measures and maintaining pricing discipline. Looking ahead, escalating trade tariffs and ongoing geopolitical uncertainty could add another layer of strain, particularly for globally exposed supply chains.
How Auto Suppliers Can Navigate the Industry’s Perfect Storm
An integrated response gives suppliers the resilience to address the urgent pressures facing the automotive industry.