A new research study coming from the Boston Consulting Group (BCG) points out that besides the auto industry, few business or economic sectors managed the stellar performance of a very successful comeback from 2008’s crisis.
According to BCG, the automakers and their suppliers had five-year median annual returns that were well above the average return (21%) of the 26 industries the study tracked. The median annual total shareholder return (which sums the dividends and share price appreciation) from carmakers was 29% in between 2009 and 2013, while the component makers stood even better, at 33%.
“OEMs and component makers will have to prioritize innovation to meet the needs of consumers,” thinks BCG Senior Partner Xavier Mosquet, one of the co-authors of the report.
The financial crisis took its toll on automakers: GM and Chrysler went bankrupt, European companies like PSA and Fiat struggled and the usually intangible Japanese carmakers were also setback. The BCG authors think the situation is now improving, but that without strategy and coherence there will be further losers along the road to full recovery.
The study also found the companies with a global presence that focused on emerging markets were more successful than the ones concentrating on the already developed regions: the first had a revenue of around 36 to 49%; while the latter only posted returns of 23 to 35%.