Report reveals key priorities on the global automotive C-suite agenda

Jan. 1, 2020
Five strategic themes will dominate automotive companies’ performance and capital agenda in 2013 and must be addressed for success, according to a new report by Ernst & Young’s Global Automotive Center.  

Five strategic themes will dominate automotive companies’ performance and capital agenda in 2013 and must be addressed for success, according to Changing lanes: the automotive C-suite’s agenda for 2013-14, a new report by Ernst & Young’s Global Automotive Center.  

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The five strategic themes are:

►   Winning companies pull ahead: Market leaders have pulled ahead in recent years as evidenced by the widening financial performance gap. They are finding the right balance across a wide range of value drivers, including success in emerging markets, the right product portfolio choices and collaborative relationships. “Of the drivers, emphasis is being placed on managing the significant number of vehicle launch events flawlessly,” says Jeff Henning, Ernst & Young’s Global Automotive Markets Leader.

►   Navigating volatility and low visibility: There are clear signs of economic uncertainty and volatility ahead. Automotive executives must not only cope with high variability and inability to predict demand, but also intensifying competition in flat or contracting markets. “This environment necessitates marked improvement in the sector’s business planning processes and organizational responsiveness to market conditions and consumer preference,” adds Henning. “To mitigate these difficult conditions, leading companies today are shaping demand with pricing and option packaging where they can. And where demand is unpredictable, companies are proactively managing supply constraints.”

►   Re-inventing the value proposition: Today’s carmakers need to satisfy a world with high variability in consumer preferences across growth markets and rapid urbanization is challenging the traditional notion of vehicle ownership. Leading companies are restructuring their product portfolios to meet vehicle function, price and feature demands, and are investing in connectivity and mobility solutions, such as telematics and car sharing programs.

►   Remodeling the business for efficiency: Automotive companies today are pushed to drive greater operational and financial efficiency than ever before. Key focus areas include reducing time to market, aligning capacity and demand, and creating more variable cost structures. Leading companies are recognizing that integrating data into decision making is key to achieving higher levels of efficiency.

►   Securing resources across the value chain: Executives sense an urgency to have transparency across their organization and secure access to key resources. “Managing these key inputs – from ensuring talent and credit availability to procuring supplies and scarce raw materials – can make the difference between a red or black bottom line,” says Henning.

Mike Hanley, Ernst & Young’s Global Automotive Leader adds: “Changing lanes offers a unique window into the boardrooms of the world’s leading automotive companies. As the automotive sector continues to evolve, the urgency of these strategic and tactical moves could determine which companies gain a sustainable competitive advantage, despite the tough market conditions.”

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