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To make certain, rates of return on capital have been a problem endemic to the auto business for years, which is one reason for the numerous bankruptcies — or near liquidations — amongst OEMs and suppliers, significantly in the past decade or so. Surviving automotive companies have famously bent over backward to save pennies on every automotive or component they make. Nonetheless, the state of affairs is turning into extra dire: The cost of capital is unlikely to come back down from its already low inflation-adjusted ranges, and new capital outlays are rising for advances in, amongst different areas, linked car and autonomous driving expertise.
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