Abstract

The future automotive business environment will be tough. Mega-OEMs will be under pressure to justify consolidation. The industry overcapacity will not be solved in the near term and will not be offset by emerging market growth. Higher sales and marketing costs will continue in the near future and product complexity will likely increase. In this tough environment, OEMs face many challenges and Roland Berger's recommendation is that OEMs address the following strategic actions: - Define an appropriate global collaboration model that will integrate its different brands and regions without favoring one over the others. - Develop strong brands and use this as a strategic lever to sell vehicles instead of incentives. - Develop an emerging market strategy that will complement its overall global ambitions while being focused on the biggest markets (e.g. USA, Western Europe, and/or Japan). - Differentiate products using appropriate levers (e.g. technology) to avoid getting caught in the pricing and incentive battle caused by excess capacity in the industry. - Manage complexity costs using complexity reduction strategies (e.g. electronic architectures), augmented by internal structures and processes. - Use benchmark-based supplier management to balance the conflicting objectives of supplier relationship development and supplier cost reduction achievements. - Develop the future powertrain portfolio to compete in different regions of the world without spending excessively and/or making the wrong choices. For the past 2-3 years, those OEMs with less complexity outperformed the global multi-brand conglomerates. However, mega-OEMs have the opportunity to succeed if they can define, leverage, and globally coordinate their vast resources and competencies in each market place uniquely. The game is still open, and the ability to master the future challenges and the quality and speed of execution will make the difference between winners and losers!

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