Automotive
Overview
The start of the recession was a car crash for automobile manufacturers.
Endemic structural and organisational issues escalated from challenging to critical status with the onset of a global financial and economic crisis.
In late 2008, the United States Congress found itself authorising a $25 billion bailout for Detroit's Big Three automakers after shares in General Motors had fallen by nearly 90% in the preceding year. Ford and Chrysler also wondered if they’d reached the end of the road1.
The UK fared little better.
In 2009, The Times reported UK car production slumping by almost 60% as a direct result of what was by then a rapidly deepening recession2.
As the automakers suffered, parts manufacturers and suppliers too cut costs and prices – margin which they would find difficult to regain when recovery ensued.
Whilst the outlook was gloomy in mature markets, emerging markets offered brighter prospects with the BRIC countries particularly vibrant.
In December 2008, for the first time ever there were more cars sold in China than in the United States3. This marked a highlight within a period of continuing rapid growth which had been gathering momentum since China joined the WTO in 2001, attracting the interest of global automobile and parts manufactures keen to secure market share4.
Manufacturers within mature markets are understandably looking to markets like this for future recovery and growth:
“May 2011 was the most successful May in Mercedes-Benz history, after the company chalked up 108,766 worldwide sales thanks in part to continued growth in Brazil, Russia, India and China5.”
Of course, economics isn’t the only driver for car manufacturers.
The industry’s impact on environmental change had attracted scrutiny and regulation, allied to concerns surrounding the sustainability of fossil fuel sources
Visible responses include an emphasis on building small and affordable cars – even from the traditionally “big is beautiful” automakers of the US – and continuing attempts to popularise electric vehicles (EVs).
However successful such initiatives may be, one thing is certain.
The road ahead for this industry is marked with transformation.
Flexibility and adaptability will be needed to complete the journey safely.
To discover more about the ways in which we can help our customers, please click the links below:
We offer automobile and parts enterprises the opportunity to remove complexity across a full range of business processes – including payroll, learning and development, recruitment, HR administration. We can also offer offshoring services delivering advantages including speed to market, back office transformation, on-demand business, improved customer service and cost optimisation. The result is more flexibility and greater efficiency in the face of formidable challenges.
We offer extensive technology capabilities across a variety of industry sectors. In automobiles and parts specifically, our Enterprise Solutions team is already helping customers maximise their administrative and operational effectiveness and manage product lifecycles. On the wider stage, our infrastructure team supports customers’ growth with cost effective, scalable and rapidly-deployed solutions. We also design, build and run the software that supports a range of business processing solutions. We embed our intellectual property (IP) to create a solution faster and more cost-effectively than our customers can themselves. We can also provide customers with Total IT Outsourcing (ITO) solutions – a single point of supply for an end-to-end managed service.
Customers include: Ashok Leyland, Iveco, Eicher, Carraro, Endurance
We are experts in supporting procurement professionals with services including sourcing, spend management, procure to pay (P2P), system management and software solutions. We actively engage with the procurement community across industry sectors and look to provide thought leadership and develop strategies for creating added value procurement.
