Despite the automotive industry's historical strength, it's no stranger to fundamental upheavals and in the next 15 years we expect it to undergo its greatest transformation to date. For passenger car OEMs and their suppliers, this means one thing in particular: setting the right strategic goals in a world of uncertainty.
Our automotive consultants are tracking a number of factors that will have a profound effect on the industry:
- A concurrence of various megatrends will pose huge challenges to many growth markets. New customers in mature markets are becoming increasingly receptive to integrated mobility solutions. Growing urbanization, increasingly strict emission regulations, technological innovation and advances in connectivity and digitalization will impact road congestion, pollution and new customer demands.
- Groundbreaking technological advances are contributing to the radical industry change. Among the innovations, new battery technologies portend a breakthrough in e-mobility, especially in urban areas and the trend towards the autonomous car may not be far off. In fact, the trend toward the fully autonomous car will continue in the next decade supported by developed technologies, such as sensors and cameras with intelligent image capturing, and an adapted legal framework.
These factors raise key implications that automotive companies will have to take into account:
- Today's passenger car OEMs need to permanently satisfy the needs of their discerning customers with cutting-edge products and services. This is a departure from decades of rigorously improving and building on established business models and the only way for them to distinguish themselves from the competition. OEMs and suppliers need to understand exactly what their clients want and how much they are willing to pay. Products and services will have to be conceptualized and devised to fulfill the brand promise and the exact requirements of customers.
- Passenger car OEMs are also under immense pressure to permanently enhance their cost structures to remain competitive in a global industry. The automotive industry of the future is likely to be characterized by takeovers, alliances and cooperations since the only way to absorb the huge investments in new technologies will be through scale.
- Customer experience and customer loyalty will be increasingly important as OEMs may find it difficult to differentiate themselves from the competition. Vehicle connectivity and the digitalization of customer interactions will also open up a completely new range of possibilities for the OEMs of the future. To take advantage, companies will need to invest in core capabilities, from electronics and information technology to digitalization. Increased competition from technology companies will also test the ability of OEMs to deliver a seamless customer interface.
- A shift in the sector's profit pool toward downstream areas will require a strong and consistent brand experience from independent retailer and service networks. Our expertise with Net Promoter System can help OEMs, suppliers, retailers and specialist service providers make the most of their points of contact with car manufacturers in the competitive markets for spare parts, service, financing and used cars.
Our unique approach to our work helps ensure our clients' long-term success amidst the industry’s transformation. We treat our clients businesses as our own and collaborate with client teams to identify pragmatic, tailored, solutions based on their unique needs. Our Results Delivery® approach also helps to ensure that our jointly-developed solutions are effectively implemented by predicting, measuring and managing risk.
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