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3 Top Trends Determining the Future of Automotive Manufacturing

Posted by Sabine Kempe on Nov 18, 2019 4:26:09 PM
Sabine Kempe
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The age of radical change in the automotive industry is here. Global market changes, an unprecedented shift in consumer behaviour and revolutionary innovations in automotive technology have far-reaching effects on the automotive manufacturing and suppliers industry. In this post we are discussing the top 3 trends shaping the future of the automotive manufacturing sector and how businesses need to transform to secure their spot in this highly competitive industry.

Top Trend 1: The Car of the Future is “eascy”

According to a recent publication by PwC the future automotive market can be summarized as electrified, autonomous, shared, connected and yearly updated, for short “eascy”. With changing mobility habits, more people travelling more kilometres and a rising intensity in usage of cars - especially for shared autonomous vehicles – manufacturers are facing a radical shortening of model cycles. Coming from a traditional five to eight years, the range of models will need to be updated annually, to include the latest hardware and software improvements. Customers will not want to buy a new car yearly, but short innovation cycles will enter the market via updates especially for shared, autonomous and electric vehicles.

Automotive manufacturers and suppliers that are already struggling to deliver accurate cost estimates and mitigate the risks of cost pressure in this highly competitive industry, will struggle even more under these conditions. Mastering the challenges of cost and price changes, change requests and negotiations during any stage from prototyping, pre-serial, mass production to re-contracting need to be made a priority to sustain the shorter innovation cycles that are following this trend. Effective Change Offer Management and a maximum in Cost and Price Data Consistency enables automotive manufacturers and suppliers to keep up the pace of shortened innovation cycles, whilst maintaining profitability.


Find out how sales digitalization for automotive manufacturers can will help you master complexity and cost pressure to move up the value chain.


Top Trend 2:  Globalize Sales. Now or never.

PwC predicts that by 2030 Europe’s vehicle inventory will reduce from 280 million to 200 million vehicles. Forecasts for the US state a reduction of 22% to 212 million vehicles. Meanwhile in China the inventory could grow by almost 50%.  Whilst the trend predictions for US and Europe suggest falling inventory, this is mainly true for traditionally used vehicles. The opposite will be the case for the new models of shared and especially shared-autonomous vehicles. A rise in sales of up to 34% is expected in Europe. In China an increase of over 30% to 35 million units sold is forecasted.

 

Automotive manufacturers and suppliers aiming to keep up with these developments need to professionalize their globalization efforts as soon as possible. For example, a Global Product & Customer Relationship Management (CRM) can help untangle the complexities of multiple projects, automotive platforms, technologies, customer plants and own plants. Global sales teams need to have visibility into all relevant customer and supplier details to manage automotive projects efficiently and profitably. New and existing engagements can be maintained easily, accounts and project reports drawn instantly and pipelines managed to prioritize only the most lucrative opportunities… if all global operations run on one single platform.

Top Trend 3: Regulations and new mobility habits boost After-Market Business and E-Commerce

When it comes to the stakeholders, the aftermarket is generally split into the OEM network
and the independent aftermarket (IAM) due to changes in regulations. While most aftermarket suppliers are currently operating in the independent aftermarket already, a shift towards direct distribution models and partnerships (in particular e-commerce businesses and workshops) will characterize the evolution of the aftermarket. Currently, only about one in three players is using a digital commerce business model, but many experts predict that these will become more important in the near future.

In addition, following the new mobility trends of electrification and sharing, the usage intensity and service life of vehicles is expected to change dramatically. Shared usage models increase vehicle mileage and intensity of use, which results in far higher service requirements compared to privately used cars. After sales service levels will increase and spare parts and replacement components sales are predicted to rise.

Furthermore, the automotive value chain is expected to no longer finish at the factory door, but to extend over the entire lifetime of a car. New buyers and target groups will emerge from the shared usage model – and they expect a direct and flawless customer experience. Automotive manufacturers and suppliers that have established After-Market-Sales and Service Portals or E-Commerce Solutions will be able to meet these demands and generate revenue from these opportunities.

Summary

In the upcoming years automotive manufacturers and suppliers will continue to fight against sinking margins while at the same time they will be forced to invest heavily in customer-oriented innovations. Those who want to remain successful, will have to transform their businesses to master globalized sales, offer user-oriented innovations in very short cycles and excel in offering flexible products and services via multiple channels.

 

As the experts for sales solutions in automotive manufacturing, we can offer you a demonstration of our ‘Manufacturing X Sales Platform’ to help you explore your options of growth and profitability.

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Sabine Kempe

Written by Sabine Kempe

Sabine is responsible for In Mind Cloud´s marketing. A cloud solution enthusiast at heart, she is dedicated to finding answers to customers' questions before they have even been asked.

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