Vulnerability Within the Czech Automotive Supply Chain

Abstract This study aims to explore the vulnerability within the Czech automotive supply chain. To explore the vulnerability, analyses based on the comparison of both monetary and time-based characteristics, namely profitability, cash flow ratio, indebtedness, and cash conversion cycle, respectively, were employed. The underlying dataset comprises from financial statements of individual companies belonging to the automotive supply chain in the Czech Republic during the period 2011–2018. This supply chain is defined NACE 22, 27, 25, 24 in Tier 1 (raw material producers), Tier 2 (value-adding parts producers, and Tier 3 (components manufacturers and assemblers). Empirical evidence has revealed several findings: within the supply chain itself, Tier 1 companies generate higher profitability and free cash flow accompanied by lower indebtedness and the fastest cash conversion cycle. Thus they are better positioned to withstand current crises than companies from Tier 2 and especially Tier 3 sub-segments.