@Risk

Reports from the Reuters Auto Summit, which is taking place this week at Reuters’ offices in Paris and Detroit, tell the story of just how hard the recession hit automotive suppliers.

Industry execs at the Summit said suppliers are the now the most at risk in the entire sector. Automotive suppliers should anticipate a wave of consolidation as businesses try to regain footing by restructuring, boosting economies of scale, and accessing new technologies.

According to Tim Leuliette, chief executive at Dura Automotive Systems Inc., the auto suppliers sector is severely distressed, with around 200 U.S. suppliers slowly selling assets to other rivals or private equity companies.

The European industry is facing “formidable challenges,” as well, said Falk Frey, senior vice president corporate finance at Moody’s. Auto manufacturers In Europe benefited from government support, but now need to deal with problems of oversupply and overcapacity. They also need to regroup, if they want to capitalize on the trend toward cheaper, smaller, more fuel efficient cars.

The news from the Summit isn’t all grim, however. Revealing a glimmer of optimism, Frey said he believes the worst of the automotive industry crisis is over, and that world sales are set to stabilize next year.