Fractional CFO for Automotive Component Manufacturers

Alehar shows an automotive supplier which parts can take a price cut by working out what each part really costs to make and what it earns at today's price. You can see which parts and programs make money, which lose money, and how much each price cut would take away. You go into the talks knowing what you can give, where to say no, and which parts need a higher price because material costs or volumes have changed.

Alehar forecasts an automotive supplier's cash by following each new program from the day you pay for tooling to the day the customer pays for the first parts, and then through the ninety-day terms once the program is running. You can see the cash gap for each program and for the whole plant, how much credit you need, and whether to ask the customer to fund part of it.

Alehar shows an automotive components supplier what the move to electric vehicles means by splitting your sales and profit into parts for combustion engines, parts used in any vehicle and parts for electric vehicles. Using your customers' program plans, it shows each over the coming years. You can see how much profit is at risk and how fast new work needs to replace it.

Alehar helps an automotive supplier recover the cost of a customer's volume shortfall by working out what it is costing you: machines and staff sized for the promised volumes, tooling not yet paid back, and fixed costs spread over fewer parts. That gives you a clear, documented case for a price adjustment or compensation when you talk to the customer.

Alehar tells an automotive supplier whether a plant near a customer's new factory is worth it by setting the cost of the building, machines and start-up against the programs the customer has actually committed to, at realistic volumes rather than promised ones. You can see the payback, how much you would need to borrow, and what happens if the customer's volumes fall short again. Alehar then recommends the volume commitments and terms to ask for before you commit.

An automotive components supplier should track the margin on each part and program at today's prices, tooling paid for against tooling recovered from customers, actual volumes against the volumes each program promised, cash tied up in material, stock and unpaid invoices, and how much of the business depends on one vehicle maker. Alehar reviews them with you monthly, so a price cut, a volume shortfall or a slow payer is dealt with early.

An automotive components supplier is valued on its profit by part and program, how much depends on one vehicle maker, how many of its parts go into combustion engines, the age of its machines and the programs it has already won. Alehar sets this out before talks start, so a buyer or investor finds the answers ready, and can then run either deal: a sale under its Selling your Company service, or an investment under its Raising Equity or Debt service.

An outsourced or virtual CFO suits most owner-run automotive suppliers. Alehar provides a senior finance lead and a team. Each month they review part and program profit, cash and the next customer negotiation with you, and agree what comes first. It is the seniority suppliers look for in an interim CFO. Your accountants keep handling the books, tax and audit.