Trends In Automotive Industry

Topics: Supply chain management, Supply chain, Management Pages: 4 (1084 words) Published: February 14, 2014

Trends in the Automotive Industry

Trends in Demand

Uneven Growth
The demand for cars is growing, stemming in large part from China, India, and Eastern Europe. Established automotive markets in the United States, Western Europe, and Japan, however, are flat to declining. This uneven growth raises implications for the supply chain. For one, OEMs and their tier-1 suppliers must establish a local presence to benefit from these new growth opportunities in emerging economies. They must also tap into the local supply base to take advantage of cost levels and to fulfill local content requirements. At the same time, they must integrate local operations into their global supply chain management systems and programs. For example, sourcing processes from local suppliers must be aligned with global quality-assurance guidelines and procedures. Fragmentation

Traditional car segments such as sedans, vans, hatchbacks, and pick-up trucks are fragmenting more and more into niches. Derivative car segments, on the other hand—such as coupes, roadsters, minivans, and two-seaters, as well as cross-over vehicles such as four-door coupes, SUV coupes, “soft”1 SUVs, and sport vans—are growing. A combination of customer demand for personalization—the right product for their specific use at the right time—and manufacturers conquering new customer segments is causing automakers to grow their product offerings. The environmental or “green” movement is encouraging fragmentation even further, by shifting demand away from large and/or high-consumption vehicles to smaller and/or more fuel-efficient cars, giving birth to even newer segments, such as city or microcars2, and new propulsion technologies, such as hybrids, clean diesels, and diesel hybrids. Despite measures to control incremental costs resulting from fragmentation—such as platform, module, and component sharing across models and brands—segmentation results in a more complex supply chain that needs to be managed....
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