We expect to see substantial supply chain consolidation as car manufacturers aim to reduce their tier 1 suppliers by a third during the next product cycle. However, this strategy is increasing risk for car manufacturers; supply chain disruption and quality issues are making a greater impact when they happen.
Meanwhile emerging market demand for vehicles continues to soar. European luxury car manufacturers that export to emerging markets from local factories are enjoying record sales and profitability. The main challenges facing luxury car manufacturers are building production capacity in emerging markets and developing their global networks. Hence all vehicle manufacturers and their suppliers need to continue to expand their business internationally or risk being marginalised.
Vehicle manufacturers are dealing with these substantial shifts in demand while investing heavily in R&D with electric cars and connected car services. Internal combustion engine improvements should see it dominate for several decades yet, but electric and fuel-cell vehicles represent the future with many examples already on the road. In-vehicle connectivity is opening new revenue streams for vehicle and smart-phone manufacturers with infotainment, motor finance, insurance and repair industries all about to be radically transformed.
In the UK, the retail and aftermarket continue to perform better, although new marketing channels such as internet sales and pop-up showrooms are gaining ground.
Our automotive team is experienced in dealing with all these issues in a holistic way that considers all the angles. We advise on commercial strategy, redesign business processes and implementation. Our experts advise on raising debt and equity finance, mergers and acquisitions (M&A), Tax, IT, Operational Transformation, Supply Chain, Procurement and Sales. We have taken the time to grow our services and work with the largest and smallest automotive companies to improve financial performance and reduce risk. .
Trends in the Automotive Sector