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Industrial Transformation

Market situation threatens digitalization of automotive industry

Declining sales, cost-cutting programs, and high investment costs in the fields of autonomous driving and electric mobility are putting automotive suppliers under pressure. In a worst case scenario, digitalization could fall by the wayside.

22 Sep. 2019
HMI-ID09-002kt_Roland Berger
Photo: Roland Berger GmbH & Lazard

The gloomy global market could have serious implications for the digital transformation of the automotive and supplier industry. This is the finding of a recent study by consultancy firm Roland Berger. The favorable forecasts of recent years had prompted many suppliers to expand their production capacities. However, due to a global decline in demand, in some cases more than 60% of this capacity remains unused. At the same time, banks are becoming more restrictive with credit financing, which is limiting supplier’s financial leeway.

On the other hand, there is increasing pressure to invest due to the trend toward autonomous driving and e-mobility. This puts the industry in a tight spot, especially smaller companies: Companies have to manage their daily business profitably and at the same time push ahead with their digitalization in order to hold their own against their competitors. Individual and innovative market strategies are needed to stay ahead of the competition. According to a brief study by strategy and marketing consultants Simon Kucher & Partners, just 36% of suppliers currently see digitalization as a direct opportunity.