The Same, Only Different: Transformation Challenges in the Automotive industry

We are at the beginning of a phase in which the way we (and goods) get around will drive enormous growth in the automotive industry. Autonomous driving immediately springs to everyone’s mind.  But the electrification of vehicles will have an enormous impact as well.  

Around 100 components familiar from the classic combustion engine are in line to be replaced by about 40 new components.  In the next ten years, EVs and autonomous vehicles are predicted to generate approximately $400 billion in sales per year.

The images of the classic automotive industry employee will recede into the past.  In many areas, specialists in software and EE (electrics/electronics) will predominate over classic mechanical engineering.  

However, we are already in the grip of too few skilled professionals for these changing requirements. The German automotive industry is faced with even greater challenges, ones not limited to this sector alone. As recruiters, we notice that many of our clients still refer to the failures of politics and see themselves in a victim role.

The immediate focus of the automotive industry should be addressed in−house. The industry has to tackle serious strategic issues regarding new products, manufacturing processes, and digitalization.  In addition, effective recruiting strategies have to be put in place.   

Product Strategies

How long will legacy products still be in demand? How dependent are current products on the technologies of yesteryear? What are a firm’s core competencies, its advantage over the competition? Which technologies can be vertically integrated into value creation processes to complement new products, components, or systems? Which new industries need new or legacy products in profitable batch sizes, and how can these needs be addressed?

Manufacturing Strategies

In the future, which locations will allow which products to be manufactured competitively? At which locations can product manufacturing processes be bundled to maximize efficiency (value streams, resources, setup times, tool availability, application expertise, logistical capabilities, etc.)?

Digitization Strategies

How can suppliers and customers be integrated into a simple “end−to−end” SCM software solution in order to map a smooth and quality−assured material flow and value creation process? How can new digital technologies available on the market be used in the future to develop and manufacture high−quality products faster and more effectively per employee? Only in this way will labor costs play a subordinate role in international competition.

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These strategic issues are confronting not only the German automotive industry but other sectors of the nation’s economy as well.  The issues are, in fact, global.  So is the need for companies to deploy effective recruiting strategies.  

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