Auto industry faces bumpy ride

The world motor industry faces a new set of challenges to its business models and cost structures, according to Lauren Patlansky, associate director, accounts & business development at Ernst & Young. The global nature of the sector is behind some of the risks it faces in 2008. “While new markets are joining the global community as important production hubs, established markets are increasingly compelling vehicle and component manufacturers to reconsider their priorities and risk agenda to remain competitive in a rapidly evolving environment. “The short- to mid-term outlook for motor manufacturers remains difficult, necessitating a sustained focus on improvements in efficiency and cost structures,” she says. “Global sourcing strategies are increasingly critical to scour the world for low cost sources of materials and components. However, that increases supply chain risk, especially with ‘Just In Time’ delivery and the associated risk of doing business in emerging markets,” Patlansky says.