Impact & Expertise


Industry Challenges

The automotive industry is going through the most challenging period in its history. Sales from original equipment manufacturers (OEMs) are in decline all over the world, and excess capacity and environmental pressures add to the challenge. Suppliers and retailers are struggling for survival, but consumers expect greater variety, content, and bargains.

Companies need to ask some crucial questions to survive—and even thrive—in the downturn:

  • How do we adapt to new markets that are different in terms of consumer demographics, local competitors, supplier base, and channel structures?

  • How do we redefine our market strategies to handle more-specific segmentation, challenging emissions regulations, and alternative drive-train technologies?

  • How should we react to new cooperation schemes between OEMs and suppliers as well as global consolidation throughout the industry?

In many economies the automotive sector accounts for a large share of jobs, gross domestic product (GDP), exports, spending on research and development (R&D), trade surplus, and technology innovation. With a full recovery to 2007 levels not expected for several years, the downturn can put hundreds of thousands of jobs at risk. It is likely that state support programs and governmental task forces will be set up to prevent the worst.

BCG Competencies

BCG has a long and proven track record of designing and executing growth strategies, operation-improvement programs, complex mergers, and turnarounds in the automotive industry.

Our expertise extends to every segment of the industry and every link in the value chain. BCG works with governmental authorities as well as automotive manufacturers, their suppliers, and their distribution partners.

Supported by decades of automotive experience, our consulting approach resolves operational issues through state-of-the art strategic thinking. We utilize our global expertise to define winning strategies, improve top-line results, and guarantee bottom-line impact.

  • Winning Strategies—The crisis needs to be seen as an opportunity to take actions that are otherwise not possible and to reach beyond the limits of today’s traditional business models. We help define strategies around market developments, consumer behavior, product specification, value-chain partnerships, new distribution formats, and service offerings.

  • Top-Line Results—Most OEMs have entered the fight for customers with increasingly aggressive sales offerings. “Job-loss guarantees" and "flat-rate offerings” have become the norm, but, being direct customer discounts, are actually rather conventional in nature. New propositions are needed. We help realize maximum top-line impact from many different proven and new levers in the area of sales and marketing.

  • Bottom-Line Impact—All industry players should have reacted by now with capacity adjustments, crisis scenarios, stress tests, and contingency plans. But targets need to be more ambitious than ever before and should entail customized intervention rather than blanket cost reduction. We help achieve cost reduction by focusing R&D spending without endangering future success; aligning structural costs without across-the-board cuts; reducing product cost without risking customer acceptance; increasing capital productivity without “stripping” assets; and improving operational efficiency.

Arne Burfeind Partner & Managing Director Zurich +41 44 388 8666

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