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Vehicle-Engineer was invited to this seminar on 17 September 2009 by SupplierBusiness, an IHS Global Insight Company. The seminar was supported by ATKearney, VDA (Verband der Automobilindustrie) and the IAA show organisers. More than one hundred representatives from the world of automotive suppliers listened to a dozen speakers on subjects such as:-
Beyond the crisis – sustainable restructuring of the auto industry and results of the SupplierBusiness/A.T. Kearney Survey; by Dr Martin Haubensak, partner A.T. Kearney;
Opportunities and challenges in the automotive sector, by Keynote speaker Wilbur Ross, chairman & CEO WL Ross & Co;
What shape will the global auto industry be in as it enters the next decade? by Arndt Ellinghorst, head of Automotive Research Credit Suisse;
The challenges of a shift to electrification in the longer term, by Philip Gott, Director Automotive Consulting IHS Global Insight;
Changing OEM demands on suppliers
Working with suppliers, by Mark Adams, vice president Toyota Motor Europe;
Rising to the challenge of the crisis, by Mr Sudam Maitra, executive Director Supply Chain Maruti Suzuki India Ltd;
Electrification and opportunities of new technologies
The opportunity for Tesla. How big, when and how? By Diarmuid O’Connell, Vice President of Business Development Tesla Motors;
A competitive leading edge niche EV manufacturer, by Franz von Holzhausen, Chief Designer Tesla Motors;
A new business model for new business opportunities, by Rolf Schumann, head of Project Development in Europe Better Place
Supplier reactions to new demands
Opportunities for the supplier industry in the coming technological transformation, by Prof. Dr. Gernat Spiegelberg, Vice President Electric Vehicle Technology Siemens AG;
Adapting to the new industry environment, by Mrs Adeline Mickeler, Executive Vice President Corporate Planning and M&A Plastic Omnium;
Outlook for global consolidation, by Philip Wylie, Director Houlihan Lokey.
VALUABLE INVENTORY OF RISKS AND OPPORTUNITIES BY EXPERTS
Listening to the well-prepared presentations, it is clear that everybody earning their living in the automotive and road transport industry must be alert to drastic changes that are occurring almost daily. It is similar to driving a car in fast, busy traffic where the driver has to be aware of his road ahead, left and right, and behind. Those who start learning to drive a motorcar have a big problem keeping their attention on the constantly changing traffic situation in which they are a part, because they must handle the steering wheel, gear change, clutch, accelerator and brake with different tasks for each foot and each hand. Experienced drivers handle their car like walking, swimming or riding a bicycle as they have forgotten how clumsy they were in the beginning. As soon as they reach the state in which a car is like an extension to their body, being alert to the constantly changing environment in traffic becomes a possibility. The same is true for people in the automotive business who find themselves in a traffic congestion, and are looking for a way-out. The speakers in the SupplierBusiness seminar gave an insight into factors determining the present business climate.
Some of these determinants are demand, fluctuating fuel prices, currency movements, surplus stocks, uncertain world economy, fiscal measures such as increasing excise and less tax deduction of business expenses. On the other hand there are incentives such as governments subsidising electric vehicles, restricting city centres and higher road tolls for existing vehicles, thus promoting zero or the least possible emission technology.
Low demand in 2009 has been caused to a large extent by uncertainty as to the direction in which mobility and transport will develop. For volume production it is necessary to have a clear view on the road ahead. In the circumstances during September 2009 when the Frankfurt Motor Show took place, some speakers saw a way to achieve business results from their own position in the automotive industry. Other voices from automotive suppliers during the Show said they have been developing business in different areas and to try to reduce their involvement in the turmoil of the world motor industry.
Plenty of industry leaders are working to show individual manufacturers a path out of the stagnation. The organiser of the automotive seminar in Frankfurt, IHS Global Insight, is a company making the fruits of the studies by experts available to motor manufacturers and their suppliers – at a price, of course, but returning to the analogy of driving a car, owning and maintaining a motor vehicle does not come free either.
Will the world vehicle population grow?
Again, forecasts of future car population are dealing with a lot of uncertainties. Will there be a large market for small cars because already 50% of the world population lives in cities? Some people note that parking problems, both physical space and tariffs are causing city dwellers to get rid of their own car, and commute by foot, bicycle or public transport. The average age is rising and older people nowadays are used to car ownership during their lifetime, but quite a few are uneasy in today’s busy traffic which requires prompt reactions and so their annual mileage will drop. A lot of the marketing efforts to sell new cars are directed at business drivers who can attribute a substantial part of their mileage to commuting. A growing number of entrepreneurs are working on their own, from their home, and their mileage is probably half of the average business driver who is working in an office some distance away from his home. The number of entrepreneurs is rapidly growing who from their home and do not rely on extra staff. In a small country like the Netherlands there are already over a million so-called ZZP’s, independents without personnel. Two factors are encouraging this growth: a lot of high calibre work can be done with the help of computer and internet – ICT for short. Another factor is that downsizing in large companies, because of shrinking demand, entails dismissals of highly qualified people. They are joining the army of specialist consultants, based on their particular experience and expertise.
The only growth in the automotive sector can be expected in India and China. The motor industry with all the associated businesses are so important in these countries that car ownership will be promoted by subsidising fuel prices and low taxation. Their populations, and physical space is so vast that the prospect of the reduction of car ownership and mileage in the industrial countries is not valid for these two countries.
Curious for more expert views?
There are a few websites which can lead you to areas for further study:-
www.ihsglobalinsight.com
www.supplierbusiness.com
www.atkearney.com
Pim van der Veer
European Editor
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