Conclusion and further research

This book illustrates the extensive M&A that has transpired at every level of the global automotive supply chain, from the mighty automakers to obscure rubber suppliers. Further, the gold rush to control the technology of tomorrow’s autonomous vehicles has attracted non-traditional players such as Intel, Apple and Google, which possess the financial and technological wherewithal to upend the hegemony of the incumbents. Moreover, many mega suppliers are not necessarily profitable despite their considerable market power. Very often, they are trapped in a ceaseless battle for market share and eroding profit margins. The intensifying consolidation of these suppliers has also drawn the increased scrutiny of antitrust authorities who have imposed staggering financial penalties on oligopolies involved in perceived collusive behaviour. This conclusion presents some closing thoughts on the concepts covered in the preceding chapters of this book. The book offers the extensive mergers and acquisitions that has transpired at every level of the global automotive supply chain, from the mighty automakers to obscure rubber suppliers. Rubber suppliers to Bridgestone, Michelin and Goodyear are starting to merge to gain critical economies of scale and scope. By rapidly increasing their size through acquisitions, these relatively small rubber suppliers can increase their power in price negotiations with their customers, the significantly larger tyre industry oligopolists who are constantly squeezing them for discounts. The book reveals that the very nature of firms has changed in the era of globalisation. In the pre-globalisation period, automakers tend to exercise hegemonic control over their considerably smaller suppliers. Future research could examine the impact of the entry of non-traditional players into the automotive components industry.