Welcome to the next generation of the automotive industry. While this industry has been around for over 100 years, there's never been a more exciting time. The automotive industry has redefined itself and is constantly changing.
Every automotive company today is dealing with four main imperatives.
- Technology: This includes not just in-car features or how users use a vehicle, but also the technology used to manufacture the vehicle and better their business to gain competitive market share.
- Resilience: To stay competitive, companies must create strong, repeatable business processes to handle issues like supply chain and chip shortages or disruptions on a global scale.
- Sustainability: Automotive companies must focus on areas such as sustainable sourcing and reporting and understanding their environmental impact.
- Business: Automotive companies must find a balance between innovation (to gain new customers and stay ahead of the competition) and running a profitable business for their stakeholders.
What drives these business objectives?
There are five key pillars that companies are focusing on in the automotive industry.
- Customer Centricity: Making the customer the priority in all decisions, whether it is in the design of the vehicle or the service to go along with that vehicle.
- Anything as a Service: Traditional buying or leasing of a vehicle are no longer the only options. Automakers and other players in the ecosystem can now offer subscriptions for vehicles, miles, or in-car services.
- Connected Products: Modern vehicles and their components are equipped with technology that generates valuable data. This data can create opportunities for both automakers and the broader ecosystem to monetize from this information.
- Resilient Supply Chain and Smart Factory: Technology is important not just in the vehicle but also when making it. As companies continue to innovate and put that technology in vehicles, using smart factors and resilient supply chains can help them increase productivity and reduce costs.
- Sustainability and Circular Economy: As battery technology becomes more common in vehicles, it's crucial to know the origins of these components and plan what happens to these components and raw materials after the vehicle's life cycle ends.
Lesson Summary
- The automotive industry is experiencing an exciting phase of transformation, focusing on four main imperatives: technology, resilience, sustainability, and business profitability.
- Companies aim to enhance in-car features and manufacturing processes, create robust business models to manage global disruptions, prioritize sustainable practices, and balance innovation with profitability.
- These objectives are driven by five key pillars: customer centricity, offering services beyond traditional ownership, leveraging data from connected products, maintaining resilient supply chains and smart factories, and adopting sustainable practices.