THE CHANGING FACE OF AUTOMOTIVE
How will you emerge from our perfect storm?
The automotive industry is, frankly, in a state of upheaval. And while some are in a better place than others, there’s no denying that we’ve never had to deal with so many diverse and competing challenges at the same time. It’s just as well that we’re a resilient industry.
Yet, unlike so many of the challenges we’ve faced in the past, this time we can’t just stick it out until the storm passes. There will be no ‘going back to normal’ – we’re now busy determining exactly what that new normal will be.
Fortunately, every challenge brings great opportunity, which is just as well when you look at what’s in play right now.
What’s happening in the UK automotive industry?
In the UK, we’re going through an almost perfect storm of disruption and change. Over the last year or less, we’ve seen:
- New car sales have fallen for a third year with predictions that 2020 will see further declines
- The loss of thousands of jobs in manufacturing, with the likelihood of more to follow
- BEV car sales rocketing by 135%, albeit from a low base, with EVs now commanding their highest-ever market share
- Petrol vehicles now circa 65% of all sales
- FCA regulatory focus on Motor Finance including dealer commissions
- The need to reduce ‘cost to serve’ while providing a competitive customer experience requiring investment in robotics, automation and AI
- The rise of wider subscription and ‘pay per use’ models replacing more traditional ownership, including manufacturers and their finance partners who are focusing on ‘servitisation’
- Increasing next-generation digital and mobility demands across the public, retail and corporate landscape – e.g. rise of multi-modal MaaS solutions to support urban traveller demands
The UK automotive industry is right to be concerned about future sales, changing finance models and increasing customer expectations. And this is why every organisation needs to be sure that they are investing in the right technologies and business models; cutting expenditure in areas where commercial benefit is shrinking; and prioritising their strategies to deliver not only the best ROI, but also the most sustainable and future-proof version of their brand that they can possibly achieve.
Our honest opinion and what to do about it
For example, during the early days of digital (not so long ago) when organisations rushed to launch e-trading platforms, dealer portals, online customer account management and the like, budgets worth millions were frittered on inadequate solutions. Time and again we’ve seen the results of inadequate analysis, a limited focus, lack of attention paid to critical ROI and duplicated functionality. In places, we’re still living with a legacy of dysfunctional organisational silos and inefficient duplication, leading to excessive operational costs. Bluntly put, what may have started as an opportunity has often created yet more challenges in the long term, impacting on profitability, customer loyalty and – in some cases – brand value.
They’ll need to be engaging with independent specialists (like us) who know the automotive industry inside out and can provide big picture thinking, holistic solutions and – crucially – deliver on objectives over the short and longer term. They’ll need to work with people who can spot the relevancy and opportunity provided by adopting the best solutions and ideas from other industries, such as banking, telecoms and technology. And, given our industry’s track record, you need people who can help to work across the various silos within a business and start to leverage some of the resources, thinking and expertise that already exists within your own business to benefit your organisation as a whole.
It’s time to stop such mistakes from being repeated.
We don’t deny that the solutions will be complex – but that doesn’t mean you should be breaking current and future challenges down and dealing with them piecemeal.
Three things to look for when bringing in external resource to devise, support and deliver strategies for change:
The ability to contribute and influence in a meaningful manner at board/senior management level, and provide valuable ROI focus for those who need to make the right decisions in a massively complex ecosystem
A source of empathetic, constructive challenge – you’re looking for best practice guidance, independent thinking and positive influence from people who will take your business outside any existing comfort zone
People who can not only help you create a blueprint for the future, but who can roll up their sleeves and deliver it in the real world
If we’ve piqued your interest, feel free to read over some of our services to see how we might be able to help you weather the storm.
Fancy an informal chat over coffee about the possibilities for your business?
No fee, no obligation, no fuss.