Understanding the future of the automotive industry requires a pragmatic mindset, a new way of thinking, and openness to new technology. Automotive consultancies, for years, have provided experience and a global presence in order to transform the industry of tomorrow.
Right now, we are experiencing one of the most exciting periods of growth in the automotive industry, with breakthroughs in autonomous vehicles, ride sharing, micromobility and electric vehicles. They are here, and they are ready to change the world.
However, has the industry jumped too far? A year ago, many experts were predicting an easier transition into 2022 but with supply chain challenges, labor shortages and geopolitical instability, the vision proved to be overly ambitious.
BCG automotive consulting has estimated that dealers are currently undersupplied by about 3.5 million vehicles- “pent-up demand that has served to insulate the industry from the slowdown in growth, increased inflation, and rising interest rates”.
To put it straight, the future of the mobility industry is in question. To deliver significant change in this world, transformative technology and business models will require many new cultures and practices, to further understand change and innovation.
- Sustainability
McKinsey & Company prides itself in partnering with industry disrupters and traditional companies to make quick, intelligent implementations. Recently, the company has launched a Sustainability Academy to upskill workers for the net-zero transmission.
In the company’s press release, partner Pietro Sorrentino said “Making our economic system more sustainable and more inclusive is an imperative that is felt by all types of stakeholders, from governments and regulators, to clients, suppliers, and end consumers. Private organizations have a central role to play to decarbonise our economy, but to do so they must build skills and capabilities that today they do not have.”
Many businesses face sustainability challenges and according to McKinsey, only 40% believe they have the knowledge and capabilities to achieve their targets. Industry benchmarks are sometimes set too high for companies to even begin their road to net-zero.
Sustainability challenges are only the beginning of hurdles the automotive industry faces. Supply chains need to adapt to emerging risks and global political uncertainty. Traditionally, companies have sold products and services through “linear value chains”. In order to keep up with the digital ecosystem, government policies and hybrid ways of cooperation and competition, companies must rethink the way their chains are structured.
2. Supply Chains
As technology, demographics and government legislation changes within the industry, supply chains and operations must undergo a radical reshaping to meet demands of performance and innovation. Many consultancies advise embracing supply-base relationships and make strong partnerships to increase transparency through the supply chain.
EY offers a Supply Chain Reinvention Framework which provides end-to-end visibility for clients to manage costs and supports enterprise growth. The framework can offer unique insight through analytics and process mining.
They also offer the Supply Chain Transformation solution that helps customers move away from a traditional linear system to fully autonomous supply chains that will drive the growth of businesses.
The industry needs to be reengineered to enable large-scale automotive digital transformation projects. The global automotive industry must tackle present issues and organic future growth and the changes that are yet to come.
3. Energy and Resources
The current disruption the energy and resources sectors are facing brings a lot more challenges and opportunities for companies. The conflict in Ukraine has triggered spikes in energy prices and security of supply concerns and the geopolitical uncertainty means that companies need to expand their focus to face this common challenge.
Consultancies aim to tackle this challenge by helping businesses reshape by focusing on structure, services and technologies to meet objectives needed today. Many companies combine growth strategies and digital technologies to create lasting transformation.
4. Technology
Many OEMs enter the market and are moving from one level of technology to the other and do not have the resources to use software/embedded technology. As emission levels have increased the ability to copy technology has become more difficult. While physical attributes are easy, the technology behind software and innovation is increasingly more difficult.
Some consultancies will offer complete manufacturing facilities or be able to support generic engine/powertrain developments. As technology infrastructure develops, adoption of new technologies is driving internal innovation.
5. Mining and Metals
Mining and metals are one of the key areas within the mobility industry that must be developed sustainably in order to change the world.
McKinsey serves most of the world’s largest metals players across the region and helps them shape strategy, transform operational performance and build agile organistaions.
Consultancies, according to McKinsey, “help mining businesses navigate a volatile world and deliver sustainable and progressive performance”. Companies are continually committing to climate goals and therefore, this raises the need to source sustainable materials.
We must accelerate innovation and create environments that allow for more creativity and productivity. Partnerships must be formed between industry disrupters to challenge industry norms and push for new models and ways of working. Forging the partnerships is one challenge but maintaining them is something new entirely. A longer more-robust relationship drives greater success and will fuel sustained value and attract talent.
Consultancies play a key role in this growth. They offer innovative solutions to help aid forward thinking and adaptive preparation for the future. While the industry has faced many setbacks from the pandemic, supply chain and geopolitical challenges, the movement is moving faster than ever, and we must collaborate and cooperate to help each other go forward.