Auto supplier consolidation seen in 2010

According to Reuters, panelists at the Reuters Auto Summit in Detroit this week agreed that the excess capacity seen by the major auto suppliers will lead to increased consolidation within the market in 2010.

“There are too many suppliers,” Earl Hesterberg, chief executive of auto retailer Group One said at the summit. “The longer this market stays at 10, 11 even 12 million units, it will put financial pressure on suppliers and drive consolidation.”

Panelists also agreed that the U.S. Government stopped a possible “tsunami” by providing government-assisted bankruptcy protection for General Motors and Chrysler. However, industry experts predict that companies that have been barely able to stay afloat in 2009 might be unable to sustain themselves in 2010 and become targets for consolidation.