If anyone in the auto industry thought that the coast was clear after the recent economic troubles, a new industry review by AlixPartners, the global business advisory firm, suggests something different.
In its 2011 Automotive Outlook, the company finds that while carmakers and suppliers have seen net profits bounce back there is now a new set of formidable competitive challenges and decisions on the horizon that will keep costs and capacity under control. It suggests sales will climb slowly and to a lower peak than many others are predicting –US auto sales are tipped to reach just 12.7million units in 2011 and only 13.6million in 2012.
In a separate survey of 1,000 Americans it found that 83 per cent had delayed or planned to wait at least a year before buying a vehicle.
It outlines that one of the striking features of the new automotive industry will be convergence among competitors around the globe in areas including cost, quality, production processes, supply chain and management expertise. This convergence will require significant leaps forward in areas such as consumer focused innovation and product development excellence.
At the same time, it predicts that the future could bring a battle for control of the entire automotive value chain as new propulsion systems relating to electrification may provide an opening for automotive suppliers with battery technologies to take over the pole position from manufacturers.
Overall, it predicts a 13 per cent compound annual growth rate for small cars and a seven per cent growth rate for small crossover vehicles between now and 2015 in the US as large cars, SUVs and pick-ups are expected to see a growth rate of just two per cent.
