The automotive industry is in a delirious state of change. With China making accelerated efforts to introduce electric cars, change is no longer only a pursuit of profit for automobile companies, but has become a matter of survival. Adapting to the new trends and investment in technology are the primary ways in which automobile companies can overcome challenges and remain competitive in today’s dynamic marketplace.
With a rising number of road fatalities and alarmingly high pollution levels, the automotive sector has witnessed an increase in regulations in environmental and safety standards. To ensure compliance, automobile companies and original equipment manufacturers (OEMs) are investing heavily in research and development to raise standards on safety, fuel efficiency, and emission.
Leading automobile companies are already moving away from diesel technology and are manufacturing hydrogen-powered vehicles that fulfill the demand for cleaner, greener transport. While the new hydrogen-powered vehicles can help automobile companies ensure compliance to environmental safety standards, the implementation of the technology will require a complete revolution in the traditional production processes.
Expanding operations and sales to untapped emerging markets is one of the most lucrative revenue-generating opportunities available to the automotive industry. However, the current location and supply bases of automotive companies are not aligned to future sales. As a result, companies may remain unsuccessful at leveraging emerging markets’ share of global sales unless they devise a strategy to overcome this challenge and make their products available to high-growth markets.
Digitization of supply chain is also a critical element in today’s globalized world. The typical automotive supply chain remains largely discreet and siloed. To bring down the walls between various functions, such as product development, marketing, manufacturing, and distribution, automobile companies must focus on creating a supply chain that’s well-integrated and efficient.
The introduction of ‘connected’ cars has left a powerful impact on the automotive industry. To prepare for the future, automotive companies are partnering with software companies that have the technology required to design intelligent cars. However, the two industries differ considerably in the way they work. For example, automobile companies design their vehicles in a 5- or 10-year long development cycle. On the other hand, software companies undertake a more rapid product development process, making iterations as and when required. To manage the differences and leverage on the resources available to software companies, automobile companies will be required to improve their processes and leadership practices.
Automobile companies are not just burdened by the increasing complexity of automobile technology, but also by the shortening of product lifecycles. Historically, major car companies would build five or six different models off a single platform. But as car buyers continue to become more well-informed and demanding, they seek vehicles that not only offer them the best features and optimal performance but also fulfill their desire of individuality. Automakers are responding to this need by introducing a higher number of derivatives at the cost of their profit margins.
At Allen Austin, we understand that the global automotive industry has become more competitive than ever before. We provide executive search services to automobile companies helping them hire agile leaders with the talent to solve challenges and help achieve a distinguished and sustainable position in the market. Utilizing our profound experience of supporting automobile companies worldwide, we gauge the client’s current talent needs and devise a comprehensive strategy to help them find exceptional executive-level talent.