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Let's face it. It's not easy being in the automotive industry.
Whether you're a global, top-tier supplier, heavy truck company, aftermarket provider, niche builder, or a smaller, regional player - there's no place to hide and ride out the fundamental transformation underway in the industry today. Ignore changes caused by this transformation and you risk your long-term survival. To say your business is challenged is an understatement.
The automotive industry is highly complex. It has been since the day assembly line. But the industry is in such a state of change today that this complexity is reaching new levels. The products themselves are getting more complex. And the demands of globalization coupled with overcapacity add new dimensions to a highly volatile marketplace.
Ever-intensifying competition and the push of new requirements and mandates from customers to suppliers create the makings of a stressful, high-risk business environment. It's not surprising that executives at virtually all automotive companies are feeling the pains of competing in this dynamic, high-pressure, high-stakes business climate.
But with pains can come gains, and innovative automotive executives know there's a way to turn today's adversity into long-term business advantage. They have gained particular benefits from
Infor's innovative software solutions that solve the most daunting business challenges facing automotive companies. Over the years, the business challenges have changed, of course. But the Infor team's offerings demonstrate that the company has kept pace, continuing to invest in the expertise and solutions automotive companies need today and in the future.
A key aspect of Infor's automotive industry commitment has been the analysis of current trends having the greatest impact on the industry, what that impact has been, and the solutions that can help customers take full advantage of the current market dynamics.
This report provides the Infor perspective on the global trends of greatest importance to automotive companies and offers insights into how executives can act decisively to emerge as winners from the current transformation.
THERE'S CHANGE: SEVEN TRENDS DRIVING AUTOMOTIVE COMPANIES
The environment for the automotive supplier has never been more volatile. To succeed, it's important to understand what you are up against in this shifting industry landscape. Infor's automotive industry analysis indicates that, for major players in the automotive supply chain, seven current trends are having the greatest impact. Though differences emerge from region to region, it's clear that all apply to your business to some degree. It's also clear that these trends are all interrelated, forming a web of both challenge and opportunity.
Trend #1. Following the OEMs Geographically
The base of the automotive industry is regrouping rapidly in the Southeastern United States. States like Georgia, Alabama, Tennessee, Mississippi, and South Carolina have become the new focal points for expansion by domestic automakers and for the introduction of facilities by Asian and European transplants, including Honda, Hyundai, Nissan, and BMW. All are seeking to become competitive in the new economy by finding green fields where lan be built with less worry about hidden environmental dangers or conges some of these plants are able to operate as non-union locations, cutting labor costs dramatically and changing the economic equation within the industry.
The automotive industry is also expanding rapidly in the new European Union, especially Eastern Europe (Slovakia, Hungary, and Romania/Poland), as well as in many areas of Asia-Pacific (including Thailand, Malaysia, and China). The automotive industry in India is expected to grow considerably over the next few years as well.
As original equipment manufacturers (OEMs) move into the new growth areas, the supply chain will grow in that direction. Just-in-time production processes demand shorter transportation routes, requiring supplier locations closer to these new plants. Furthermore, suppliers seeking to serve multiple OEMs will need to be more centrally located within this new community of auto makers.
Trend #2. Diversifying the Customer Base
Suppliers are diversifying their base for both survival and revenue growth. No longer can the supplier rely on a single primary customer as a source of growth. The string of acquisitions, mergers, and restructuring could leave a dedicated supplier in desperate straits before preventive action can be taken.
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