Perma-volatility has weighed on businesses for a number of years. Few sectors have felt this uncertainty more acutely than automotive suppliers, as the typically capital-intensive and operationally complex industry undergoes profound transformation.

Key takeaways:

• Automotive suppliers face pressure from electrification, regulation, tariffs and changing mobility trends
• Corporate carve-outs can unlock value where businesses have become non-core or underinvested
• Operational transformation – from manufacturing efficiency to data quality and commercial discipline – can strengthen competitiveness and resilience

Like so many sectors today, the automotive industry is in a state of flux. Technological shifts such as electrification and autonomous driving are rendering legacy product lines and business models less viable. Regulatory developments – from emission standards to trade policy – bring another layer of uncertainty, and escalating levels of investment are required to simultaneously maintain competitiveness and profitability. Changing consumer behaviours, including the increased adoption of shared mobility and the used vehicle market, add to the challenges faced by the industry. All this combined can feel like an uphill battle, with progress stuck in second gear.

But rather than stall, businesses can work with an experienced financial partner to accelerate. AURELIUS brings experience where disrupted business models are facing real risks. “We’ve seen the full range of headwinds faced by evolving industries throughout our more than 20 years of investing across a broad range of sectors. In the automotive sector alone, we have invested in five companies in as many years. This means we can bring capital as well as invaluable operational and strategic playbooks to businesses in need of highly bespoke support,” says Stephan Mayerhausen, Managing Director at AURELIUS in New York.

The support isn’t just to survive in today’s challenging backdrop, but to thrive and win. Streamlined governance structures and aligned incentives can help make decisions faster and more targeted. Additionally, investments in systems, processes and talent can create the foundation for more resilient operating models that are able to withstand volatility and grasp opportunities as they arise.

Many investors shy away from committing time and capital to challenging businesses operating in industries in flux. But not AURELIUS. “As specialists in simplifying complexity with a focus on operational transformation, we can support companies adapting to rapidly evolving market conditions while driving improved competitive positioning and enhanced financial performance,” stresses Thomas Walker, Principal at AURELIUS. “Our model is predicated on hands-on engagement in situations where complexity and structural dislocation have hidden underlying value, rather than on financial engineering or favourable macro tailwinds.”

Automotive suppliers fall squarely into this category. Many operate with strong customer relationships and technical expertise, yet – particularly for orphaned assets within larger corporate parents – can languish under organisational inefficiencies, underinvestment, or lack of focus – even where the underlying engine of the business remains strong.

The automotive industry is unlikely to become less complex in the near term. By identifying underappreciated assets with unrealised potential, executing complex transactions and driving operational transformation, the right partner can help rebuild and fortify critical parts of the automotive supply chain.

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Driving independent performance

Active engagement from an experienced investor can unlock value through operational expertise.

Improving manufacturing efficiency, strengthening commercial discipline, optimising data analysis and aligning leadership teams around a clear strategic direction can help suppliers meet current Original Equipment Manufacturers’ (OEMs) requirements while simultaneously investing in capabilities that will ensure they remain relevant for the future. AURELIUS is working with a number of businesses in the sector to do precisely this.

The acquisition of Teijin Automotive Technologies North America – subsequently rebranded CSP, its heritage brand – highlights the opportunity that can come from corporate carve-outs. As part of a larger industrial group, the business had become non-core to its owner, despite its strong and unique market position in advanced composite materials and long-standing relationships with blue-chip OEMs. AURELIUS spotted its potential and brought fresh focus and investment to extricate it from its parent and drive it to standalone success.

With AURELIUS’ support, the focus has shifted towards operational improvement initiatives and a unified strategic vision, particularly around manufacturing excellence, supply chain optimisation, improved quality and customer service, and refining the product portfolio. At the same time, significant emphasis has been placed on enhancing data quality and accessibility – recognising that timely, reliable information is critical to effective decision-making. CSP’s role as a sole-source supplier of drive-train agnostic critical components to blue-chip OEMs provides a stable foundation for success, with AURELIUS’ operational expertise helping to optimise each step of the value chain to strengthen competitiveness and support CSP for the long term.

MUVIQ is also accelerating its independent journey with AURELIUS. The business, a specialist supplier of power transmission systems to OEMs of Commercial Vehicles & Off-Highway and Light Vehicles, was carved out from global business Dayco Incorporated in 2024. Since then, it has been reshaped into a standalone entity with a clearly defined operating model after aligning with AURELIUS on its long-term strategy of where to play and how to win.

AURELIUS’ playbook has supported operational transformation, targeted cost containment measures and a more proactive commercial approach, making MUVIQ more resilient and better able to withstand external pressures such as tariffs and input cost volatility.

The partnership has also seen MUVIQ undertake an acquisition with AURELIUS’ support in late 2025. Winkelmann Automotive Poland is now trading as MUVIQ-Legnica, with integration focused on capturing synergies across procurement, operations and organisational structure. The combined business benefits from a complementary product offering and customer base. While it’s still early days, there is already evidence of improved cost efficiency and a more competitive market position – with the business better positioned to accelerate performance.

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Frequently asked questions about automotive supplier transformation

What challenges are automotive suppliers facing today?
Automotive suppliers face pressure from electrification, autonomous driving, tariffs, emissions regulation, rising investment needs and changing mobility trends.

Why are automotive supplier carve-outs attractive?
Many non-core automotive businesses have strong customer relationships and technical expertise but require greater operational focus, investment and standalone governance.

How can automotive suppliers improve profitability?
Businesses can improve performance through manufacturing efficiency, supply chain optimisation, better commercial discipline, stronger data capabilities and clearer strategic focus.

What role can private equity play in automotive transformation?
Operational investors can provide capital, carve-out expertise and hands-on transformation support to strengthen competitiveness and resilience.

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