Automotive Industry Trends

A recent study by McKinsey and PwC shows that the automotive industry is undergoing massive change. OEMs are evolving their collaboration strategies and ways of doing business to remain competitive. New technology such as fuel economy, sensors, and systems have increased the technical content of a vehicle. The car is also a communications, entertainment, and communication platform, and the OEMs must master all of these elements to stay ahead of the competition.

Rapid digitalization

As technology continues to improve and the cost of integrating new information becomes more significant, the auto industry is under intense pressure to meet consumer expectations. To compete, the industry must develop new ways to capture attention and spend on transportation. As a result, the auto industry needs to transform and focus on maximizing the value of digitalization. This article outlines the major challenges facing the industry as it tries to meet the demands of consumers.

Regulation

According to a recent McKinsey survey, nearly eighty percent of automotive suppliers have already defined sustainability targets. This gap between planning and doing may be understandable from a near-term economic perspective. For example, many suppliers are keeping plants in lower-cost regions, even though that will cost them more in CO2 emissions. However, this cost advantage is largely offset by increased emissions if plants were located in higher-cost areas.

EVs

The EV transition has begun, but most OEMs are not profiting from EV sales. Compared to ICE vehicles, EVs cost around $12,000 more to produce. With higher production costs, carmakers … READ MORE ...

Five Trends That Will Shape the Global Automotive Market in the Next Few Years

Global automotive growth is set to outpace the progress of established markets. Currently accounting for nearly 60 percent of total automotive profit, emerging markets are projected to grow at more than three times the rate of the established markets. By 2020, emerging markets will account for two-thirds of all automotive profit. China is the driving force behind this transformation. The following are six trends that are likely to shape the global automotive market in the next few years. This is a good time to invest in global automotive research and development.

Market structure

Globalization has accelerated the process of globalization in the automotive industry, leading to more complex production networks and value creation structures. In addition to the complexity of supply chains, some vehicle models are produced at one location and sold throughout the world. However, demand structures have changed enormously in recent years. For example, Asian demand for large SUVs has increased significantly, but North American production capacities have remained the same. This means that there is less room for differentiation among premium OEMs.

Innovations

The automobile has evolved from simply being a mode of transport to a sophisticated device that caters to a plethora of consumer needs. Automobiles can now sense road rage and react with a “Mood Burst,” while improving fuel efficiency and passenger safety are just as pressing issues. Ultimately, the automobile must be sustainable, and the innovation industry must adapt. But what does the future hold for the automotive industry?

Cost pressures

In the past, … READ MORE ...