The future of automotive: the new challenges of transformation
The automotive industry is currently in a phase of unprecedented transformation. E-mobility is just one of many challenges the sector must overcome to navigate to a successful future. Presenting nine propositions, management and technology consultancy firm BearingPoint and dla digital leaders advisory explain the complex issues automotive groups need to overcome and illustrate the massive changes that are coming to the labour market and skills profiles within the automotive industry.
Megatrends such as e-mobility, digitisation and increasing automation have brought about major structural changes within the automotive industry in recent years. However, there are many challenges that need to be overcome in order for the reorganisation of the companies involved to succeed. The changes will be far-reaching and will hugely impact both companies and the labour market. Together with management and technology consultancy firm BearingPoint, we have defined the nine central challenges facing the automotive industry and laid out the key recommended actions for successful transformation.
1. IT skills – not just in one department
Rapid digitisation, sophisticated cloud architectures and the need for workers with broadly diversified skills and abilities are blurring the traditional line between IT and other disciplines. IT skills are now in demand across all disciplines and departments. Cross-functional, agile collaboration and role modelling necessitate significantly stronger engagement with information technologies throughout the entire company.
2. New requirements through mobility services
E-mobility, connectivity and autonomous driving are giving rise to new requirements in the area of mobility services, particularly with regard to infrastructure, insurance, maintenance and entertainment. This is completely redefining established markets, which in turn is opening up new business models for companies, while also forcing them to adapt their processes, organisations and IT setups to the changing market situation.
3. Software innovation The digital car
Software is becoming the dominant factor for product development due to the sharp increase in vehicles’ software proportion along with the decrease in hardware complexity in the e-mobility sector. For automotive manufacturers and suppliers, this means a drastic change in the qualifications needed as well as increasing competition for scarce IT resources. Companies must press ahead with software innovation if they do not want to mutate into pure hardware suppliers.
4. Automation in production and logistics
Exponentially progressing automation in the areas of production and logistics is accompanied by a huge drop in the number of industrial jobs. Companies and their regional facilities must meet this challenge by training their employees now for new and changed job opportunities.
5. Collaboration
Stronger collaboration between OEMs, big tech companies and specialised startups will be essential to cover the growing demand for software expertise, new technologies and specific human capital. In implementing this, the automotive industry will transition away from supply chains to complex ecosystems in which every person must find their place anew and redefine it.
6. Changed customer relationships
New digital sales channels and direct customer contacts will give rise to a rapid increase in direct sales by automotive manufacturers, which will dramatically weaken the role and relevance of dealers. In view of this, dealers urgently need to act so that they can define their future role and business models and adapt to suit the needs of their customers.
7. Digital after-sales
Data-based fault detection, over-the-air updates and reduced hardware complexity are revolutionising the after-sales market. The future role and importance of repair shops within the automotive industry ecosystem is set to change dramatically. Software specialists will be increasingly sought-after in the after-sales sector, while traditional mechanics will become less important – a development that will be further intensified by e-mobility.
8. Optimised administration and data-driven decision-making processes.
As a direct result of Big Data and machine learning, manual transactions in IT systems will become obsolete, which will have a significant impact on organisations and their employees all over the world. For automotive manufacturers and their suppliers, this will necessitate a huge degree of change management throughout the entire organisation and structure.
9. Sustainability
Pressure to increase sustainability and environmental awareness is steering companies away from purely maximising profits and towards more CSR-based corporate decisions. In the automotive industry too, suppliers will need to ask themselves if their image, product range and market positioning are sustainable and whether they reflect changed consumer interests.
New leadership personalities
In all nine of these areas, some very specific leadership skills will be needed to successfully overcome these transformation challenges. Companies must employ suitable leadership personalities – thought leaders, social leaders, process leaders, results leaders and data leaders – in their various departments to drive successful reorganisation in a credible, sustainable manner. For example, data leaders are more in demand in the area of optimised management, while social or people leaders must step up to lead others in the area of sustainability.
Marcel Derakhchan, dla Managing Director: ”The far-reaching changes within the automotive industry call for new skills and characteristics at the management level for all stakeholders. In particular there is a need for strong leadership, a high level of data and technological expertise, and a deep understanding of the 3 interdependencies within a market that is developing into a complex, cross-industry ecosystem.”
Dr Stefan Penthin, Global Leader Automotive at BearingPoint: “In the context of rapidly changing realities, automotive groups are under massive pressure to transform. They need to adapt their structures quickly and comprehensively as well as develop new products, business models and services. There is no one solution that will help all companies in the automotive industry to successfully reach their transformation goals. Rather, they need an entire range of significant structural changes, which must be considered together and implemented accordingly. However, it is also clear that the future success of German carmakers depends greatly on how well and how quickly they can master the topics of electromobility and digitisation.”
Find out more about automotive practice from Bearingpoint at: https://www.bearingpoint.com/de-de/unsere-expertise/branchen/automotive/