As we set our sights on strategies for 2018, it’s clear that every megatrend is capable of driving significant change and delivering exciting new opportunities. But what happens if three come along at the same time? The automotive industry is about to find out.
Trend number 1 is globalization. Of course, the industry is already global but this megatrend still has much further to go. There are more and more new automotive consumers in emerging markets and – in the quest to optimize coverage and costs – vehicle production is becoming ever-more global requiring efficient, safe and swift movement of critical components around the world. Automotive players, particularly companies involved in the production of electric vehicles, are also reducing complexity by rationalizing their inbound components platform strategy and regionalizing supply as much as possible. This megatrend also adds a new layer of complexity to customer care – people rate companies according to the quality of global service they experience locally.
Hot on the heels of globalization is trend number 2, digitalization. This is driving smarter production planning, enhanced collaboration as well as the development of innovations including autonomous vehicles, the connected car, and automotive e-commerce. Digitalization is the main driver of the convergence of the automotive and technology industries and this leads to more fast and furious “tech-on-wheels” product launches, introducing and increasing technology components such as cameras, radars, sensors, and infotainment into the supply chain. Digitalization therefore has multiple impacts – it changes the industry’s products (vehicles), triggering new supply chain requirements such as condition monitoring, and it changes the logistics industry, unlocking new levels of efficiency through more connected and visible operations. In addition, this megatrend enables new mobility business models and these are becoming a core focus for the automotive industry.