Agility Overcomes Volatility
How Automotive Procurement Can Secure Margins and Resilience in Times of Disruption
With margins under pressure, BEV transitions stalling, and global trade shocks accelerating, C-Level suite is being forced to reassess procurement’s role in protecting enterprise value. This article outlines why agility is no longer optional—and how procurement can become a decisive lever for resilience and profitability in today’s automotive sector.
The automotive industry is operating in a radically different environment—defined by cost pressure, geopolitical risk, and market uncertainty. While megatrends such as the shift from ICE to BEV and the rise of software-defined vehicles (SDVs) continue to shape long-term transformation, the short-term outlook is marked by disruption. Consumer demand remains hesitant, delaying the BEV transition and exposing OEMs and Tier 1 suppliers to falling volumes and underutilized fixed costs.
In Europe, BEV market share has declined from 14.6% to 13.6%, forcing a reassessment of investment strategies and capacity plans. At the same time, new external shocks—like the recently announced 25% U.S. import tariffs on European vehicles—are directly threatening profitability, with potential losses of over €11 billion for German OEMs, according to Bernstein analysts*.
Margins are under massive pressure—and further exposed to geopolitical volatility. For CEOs, CFOs, and CPOs, the implications are clear: procurement is no longer a back-office function, but a boardroom priority. And agility in procurement is no longer optional—it is a core capability to protect profitability, ensure supply continuity, and maintain competitiveness in global markets.
How to manage the dual challenge
The new procurement agenda strikes the balance between protecting profitability today and preparing the organization to thrive amid ongoing volatility.
Stabilize profitability through targeted levers
Procurement plays a central role in responding to margin pressure—today, not tomorrow.
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Ensure fact-based supply chain transparency
Mapping N-tier suppliers and risk hotspots helps identify bottlenecks early, while enabling cost benchmarking and quick re-sourcing decisions.
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Adapt sourcing strategies in real-time
With trade risks no longer hypothetical, tools like the Inverto Trade Tariff Simulator help companies model cost impacts, simulate sourcing scenarios, and optimize supply routes under pressure.
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Accelerate cross-functional cost initiatives
Drive “next-level” cost management through collaboration between procurement, R&D, and finance—leveraging design-to-cost, make-or-buy strategies, and rapid negotiations based on live market data.
Build structural resilience and agility
Survival tactics aren’t enough. Long-term competitiveness will require embedding resilience across the operating model:
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Enhance S&OP processes
Align planning more tightly across demand, supply, and sourcing functions to adapt quickly to changing market conditions and manage highly volatile demand patterns.
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Diversify profit pools
Broaden offerings to reduce dependency on lagging segments (e.g., ICE) and create new growth channels in mobility services or software.
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Invest in flexible value chains
Modular production setups, regionalized supply-and manufacturing eco-systems can reduce exposure to both demand volatility and geopolitical risk”.
Inverto’s Strategic Automotive Procurement Model: A roadmap for action
To support both immediate needs and strategic transformation, Inverto has developed the Strategic Automotive Procurement Model. This framework helps OEMs and suppliers align procurement categories with the right strategic levers—balancing resilience, innovation, and margin focus.
Combined with tools like the Tariff Simulator, the model enables procurement teams to:
- Adjust sourcing strategies by category (e.g., BEV components vs. legacy ICE)
- Navigate supplier power shifts (especially in software or batteries)
- Build future-proof procurement organizations that thrive through change
Procurement makes the Difference
Procurement leaders now face a pivotal opportunity: not just to react to volatility, but to redefine how their organizations navigate uncertainty. Those that rethink decision-making speed, supplier engagement, and operational adaptability today will shape the industry’s trajectory tomorrow.
The question is no longer if procurement needs to evolve—but how fast.
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