Automotive Industry At The Crossroads

Automotive Manager 2020

Despite the coronavirus and its economic fallout, automakers should not persuade themselves that most of their troubles stem from the pandemic. It has of course been a major blow for all industries, and vehicle manufacturers had to halt production for several weeks to protect their employees from infection.

Furthermore, the economic crisis is expected to cause double-digit falls in 2020 sales in most markets. However, the big lesson of the crisis for the auto industry has been the fragility of its current model.

This year’s Automotive Manager looks at what changes are needed — and, more importantly, provides concrete suggestions for how to set these in motion.  The most prevalent issue uncovered by the crisis is that major automakers’ current business model is not resilient.

In general, automakers have a good idea of the future of their industry. Their problem has been implementing change in a fast and sustainable manner. We have identified several starting points. Of these, inhouse, “greenfield” projects are an especially good way to set a new model in motion. They allow a company to set up and test a new model, without it being held back by “legacy” units — and without the need to completely resize those older units, so long as they remain profitable. 

Automotive Industry At The Crossroads