The automotive industry across the globe is one of the largest manufacturing sectors which is innovative as well as technology focused. Some automotive markets are expected to surge forward, yet other markets are expected to stabilize. Corporate resiliency will be required to navigate through the future disruptions which can bring long term sustainability of profits and growth to this industry. As the automotive industry undergoes a definite shift, competition on the global arena has shot up. Hence in such scenario, Enterslice understands the ramifications of this change and can offer solutions to complex issues facing this evolving industry.
History of the Automotive Industry
The United States of America boasts of one of the largest automotive markets in the globe. In the year 2018, US light vehicle sale clocked 17.2 million units. Overall the US is the worlds’ second largest market for vehicle sale and production.
After Honda started its first US plant, almost all major automakers have produced and invested in billions in the US. The Automotive Industry is at the forefront of innovation with new R&D initiatives that are shaping the industry to respond to the opportunities in a better manner.
Globally this industry has a large consumer market, highly skilled workforce, better infrastructure and other incentives.
Induction of technology in Automotive Industry
Induction of advanced technologies has transformed this industry. It has presented massive value offering for consumers. Therefore suppliers should reassess their long-term product or programme and technology roadmaps in order to stay ahead of the competition. They also need to understand regulatory needs as this industry faces regulatory acceptance issues. Advanced technologies such as robotics, business intelligence and data analytics can ensure product of high quality and also ensure less recalls to the industry. Further safeguarding the intellectual property of a company, their data privacy and its security is the norm and is the strategy of automotive suppliers.
Various competencies present currently will become obsolete with the intense competition from technology players and products in this industry. Therefore suppliers must form capabilities for developing customer-oriented products by performing location optimization analysis and through value chain analytics. By investing in research for future technologies and product innovation will provide platform for future products that fall in place with consumer preferences.
Growth opportunities for Automotive Industry and Suppliers in the future
The growth opportunity for automotive industry in the near future lies in:
- Electric drive;
- Battery/fuel cell;
- Infotainment and Communication;
- Robotics and Industry 4.0;
- Sensor technologies and other technologies.
Growth opportunity for automotive suppliers in the near future lies in:
- Technology, where they must develop and acquire technologies to withstand the test of times in the marketplace;
- Mergers and acquisition which will help suppliers to grow shareholder values as well as get funding for research and development;
- Diversification wherein suppliers need to diversify to explore their top growth opportunities;
- Realignment of vendor and supplier contracts.
Tips for Automotive Suppliers to adapt to the market disruptions
The following tips can be looked at:
Innovation brings an essential new trend in terms of how we look at the process of manufacturing.
The suppliers need to look at the components that are being manufactured to see if there are synergies for consolidation.
- Cost containment
The suppliers need to focus more on costs while leveraging innovation in product development and product manufacturing in order to maintain competitive position and also ensure to create long-term market value to investors.
- Gaining Understanding
Suppliers can adapt to the disruptions in the market by gaining an understanding of evolving market demands and unlocking ways to apply expertise to the new markets.
Road ahead for Automotive Industry
Automotive players are looking to safeguard themselves through strategic partnerships and M&A. Some of the players are looking at competitors to fill up the gaps in their technological aspect, yet other companies are depending upon digital transformation initiatives to bring efficiencies by investing in technological solutions such as Blockchain and AI.
However, this may not be enough as doing well in a new global automotive industry will ask for a reinvention in all aspects of the business. This includes business model, manufacturing process and customer experience. The digital technologies need to be combined with an integrated organizational design.
How can Enterslice help?
Enterslice offers Automotive Services in the following areas:
Audit- Enterslice can assist its clients with assessment of accounting policies and help in optimizing policy decisions, provide transaction related services, help in accounting for business combinations, audit of financial statement, reviews and compilations, employee benefit plan audits, carve out financial statement audits, technical accounting consulting among others.
Tax- Enterslice tax professionals can provide insights involving domestic and international tax structuring, credits and incentives, global compliance and statutory reporting, International tax services and structuring, M&A diligence and planning, transfer pricing documentation and planning, tax technology selection and optimization services.
Consulting- Our Consulting specialists will provide an array of services on issues that focuses on automotive industry. Whether it is working with technology or management consultants, Enterslice can support in the key areas concerning automotive industry such as business valuation, business process assessment, business intelligence, cash management, IT services, Financial accounting outsourcing, fraud detection and prevention, inventory management and control, internal audit services, litigation and dispute advisory, M&A advisory and due diligence, security and risk mitigation, technical accounting consulting, Digital transformation, ERP assessment and implementation.