In a fiercely competitive marketplace, with changing customer behaviour, auto businesses see new products and/or technologies as the main path to growth. These innovations are best achieved through partnership with others. The need to integrate solutions from other industries further indicates a rise in cross-sector cooperation.
Innovations lay the path to sustainable growth
As technology becomes ever more complex, with shorter life cycles, it is unlikely that many companies have either the competence or the financial resources to go it alone. Consequently the respondents acknowledge a need for alliances and co-developments with partners. In addition to accessing new technology, the automotive executives taking part in this survey also feel that alliances or mergers and acquisitions will help them enter new markets, reflecting the opportunities in the BRIC nations.
Joint ventures and strategic alliances are the way forward
When asked about their preferred overall business strategy, respondents confirmed the shift towards partnerships. A large majority (68 percent) of respondents view joint ventures and strategic alliances for the OEMs as way forward, which reverses a trend of growth by acquisition that goes back several decades. Tier 1 suppliers on the other hand are more likely to favor mergers and acquisitions. Cooperation with the competitors is still rare within the supplier industry, but successful examples such as the Nissan/Renault partnership may become the norm not only for OEMs business.