TECHNOLOGY
A QUIET REVOLUTION is upending the traditional hierarchy of players in the automotive industry , forcing every participant to focus on what it will take to build the future automotive business model . One thing is clear - the old ways of doing business are over . So just what is this new model ? It is a hybrid industry that fuses high tech and automotive into a new super sector .
Vehicles are now technology on four wheels . Technology – not chassis design , braking systems or tyres – has become preeminent . This upsets the status quo in the century-old business model in the automotive sector ; a status quo where the big original equipment manufacturers ( OEMs ) held all the market power . Not only is this significant for OEMs , it carries seismic implications for the automotive supply chain . It ’ s driving OEMs to form closer relationships with their suppliers – relationships that extend far back into the supply chain . In this new reality , tier four suppliers are every bit as important as tier one suppliers .
The near-term outlook for the global automotive industry is mixed . Analysts expect global light vehicle production to grow over the next two years , but
at a much slower pace than during the past five years . Despite this , the outlook for automotive sales overall is positive . Statista Inc . predicts global car sales will peak around 73 million units this year , up more than one million units from 2014 . And , while the automotive OEMs ’ profit margins are down from the previous highs of the last five years , they remain robust , ranging from eight to 14 percent . Vehicle production requires
20 January 2016