(MMD Newswire) April 22, 2009 -- The Latest Issue of Automotive Industries is now available, In the Editor's Introduction of Volume 188 Issue 1, AI's Editor, Ed Richardson talks about the "Components maketh the car" and introduces "RESCUE DETROIT"

Automotive Industries Volume 188 Issue 1 "Editors Introduction"
Your Challenge: A world leader in automobile production is in financial trouble, and is fast running out of cash. You have to take over, and try to save the company from bankruptcy, to re-think its business strategy and to rebuild its balance sheet. Thousands of employees, suppliers, communities and investors are relying on you to turn the situation around.

Sound familiar? Well, on "Rescue Detroit," a "real-time" business simulation game with instant feedback, you get to try it over and over until you get it right. We are promoting the simulation package because we know that saving the auto industry is not a game, and there is very little room for error. For the first time, decision-makers are able to test strategies and decisions before putting them into action. Go to the Automotive Industries site (www.ai-online.com) and click on "AI Rescue Detroit".

One of the first lessons is the importance of the supply chain. This is highlighted in a recently released study by the PWC Automotive Institute, which states that "the supply sector, having just emerged from a period of inflated commodity prices, is now being impacted most severely by declining volumes, difficulties in obtaining credit, the risk of business failure of their own suppliers and liquidity concerns at their largest customers.

"Between 2003 and 2007, the top-20 suppliers (by sales revenue) saw revenues rise 36%, yet witnessed a cost of revenue increase of 39%, meaning that margins have struggled to exceed 2%". This has left numerous suppliers exposed as "OEMs slash production". At the same time, the credit crunch is making it difficult for suppliers to raise finance for both short and longer-term investment. Even the reprieve in commodity prices over the last six months is providing little relief as most suppliers will not take advantage until hedging contracts end. "All told, the sector is possibly facing its worse crisis in living memory". According to the European suppliers organisation CLEPA, it is possible 500 European suppliers will go out of business in 2009 - ten times the average.

Even suppliers with stronger balance sheets, high value-add products, and concentrated market share or investment in growth technologies face an uncertain future. With cash management being the overriding survival tool, investment in R&D investment and new capacity will be cut, with long-term implications for competitiveness, predicts PWC.

OEMs have taken note, and some like BMW and Mercedes are working together to develop and source common parts in order to give their suppliers the advantages of economies of scale. Others are providing management support and even funding as a last resort. But, given the challenges now facing many of the OEMs themselves, they have limited resources themselves.

A radical rethink by component suppliers is needed, and Indian companies are among the leaders. Is it not time to redefine a business from, say, "making wiring harnesses for the auto industry" to a "specialist wiring harness solutions supplier" or some such wording. Immediately the market expands exponentially - washing machines, vacuum cleaners, robots, drills, MRI Scanners, etc all need wiring harnesses. Or an extruder of interior components - any reason why the skills and machines already in the company can't supply another sector?

More diversified extrusion, wiring, lighting, plastics or glass suppliers would be in a much stronger position to negotiation with the OEMs, and would also be spreading their risks. We see this in suppliers of communications and design technology, many of which are relative late-comers to the auto industry. So, we know it works.

Just a thought - to quote a Fiat ad in South Africa "use it, don't use it".

Read AI

Current Issues http://www.ai-online.com/Adv/Previous/index.php?year=2009

About AI

Today's carmakers GM, Ford, Daimler, Chrysler, Renault/Nissan, BMW, Honda, Toyota, Hyundai and the major systems suppliers are building 50M+ vehicles per year and are constantly looking for new suppliers, new innovations and cost savings opportunities in today's difficult market for car makers, new fuel efficient technologies and new suppliers in low labor cost emerging markets.

The auto industry is often considered to be one of the most global of all industries, (see report*) AI offers global media coverage for the industry and can position itself as the "Newsweek" magazine for the industry. By 2020 there are expected to be 1 billion cars on the planet. Reuters, CNN, Forrester Research.

Automotive Industries (AI) is the world's oldest continually published trade publication covering the automaking business. It was founded in November 1895 as "The Horseless Age," the first magazine created to cover the world's transition from horse-drawn conveyances to those powered by the new internal combustion engine. The magazine changed its name to "The Automobile" in July 1909, an era when gasoline, steam and electricity all vied for preeminence in motive power.

The magazine's present name was established in November 1917. The title was briefly amended to "Automotive and Aviation Industries" during the World War II years, as the magazine expanded its coverage of technologies and production methods to include the aircraft industry, in which many automakers participated.

AI Testimonials

If you go back and look at The Horseless Age* (*Automotive Industries was formerly The Horseless Age from 1895-1917), it's sort of like the Byte Magazine of the PC industry, very hardcore, covers all the models in-depth, explains what's going on inside......definitely part of getting things going - Bill Gates, Founder of Microsoft -

AI is and has always enjoyed iconic status among the automotive design, engineering, and manufacturing world - and thus AI can command a value-added relationship to the marketplace - Jeremy Eckhous, Account Director, Collaboration LLC

Automotive Industries is devoted to providing a global coverage on all aspects of the automobile marketplace, with an emphasis on the people, products and processes that shape the industry. Automotive Industries provides more than 40,000 manufacturers and suppliers with in-depth news, information, insight and analysis on the global events that affect the auto industry.

Automotive Industries magazine will give you our proven publicity package, which will bring your cutting edge innovations to the attention of Automotive Industries global audience

Automotive Industries 40,000 audited magazine recipients plus AI`s online readership viewing 1.86m pages per month are the who`s who of automotive decision-making, including major carmakers, system suppliers, 1st tier and major 2nd tier award winning supplier companies.

Automotive Industries magazine surpasses all other automotive based media in targeting the industries professional readership, many of whom are the top decision makers within the $1 trillion global automotive industry.

Call our account executives at Automotive Industries magazine for further details on 1 313 262 5702 or email jal (at) autoindustry.us

Contact John Larkin Publisher Automotive Industries "Established in 1895, the world's oldest trade magazine covering the global automotive industry - BPA member"

W. www.ai.com.ai -- www.autoindustry.us -- www.ai-online.com

"Automotive Industries - What's in it for you?"

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