Brand focus will take centre stage in new auto era

ED RICHARDSON
NEW DEMANDS are facing global logistics providers and component suppliers as the auto industry changes its manufacturing model.
After mass production in the 1920s and “lean production” in the 1980s, the automobile industry is undergoing a new revolution. By 2015, automotive suppliers will have taken over large parts of research and development and production from the automobile manufacturers, achieving total growth of 70% in this process.
During the same period, the auto makers will give up 10% of their current value creation – even though their output will increase by 35%. The development and production capacities of the automobile makers will be focused in the future on those modules and components that are most critical to the success of their brands.
These are the conclusions of a recent study by Mercer Management Consulting and the Fraunhofer Society. These trends will be driven in part by new technologies, the growing complexity of automobiles and the exploding diversity of models, all of which make development and production considerably more expensive.
Moreover, automobile makers will find that investing in service capacities is more lucrative than investing in production capacities. The heart of the study is represented by exact modelling of the new structures and division of work in development and production, as well as new business models and forms of cooperation between suppliers and automobile makers.
With 8.8 million direct jobs, both with the automobile makers and the automotive suppliers, the automobile industry accounts for 15% of the world’s gross domestic product, according to the study.