Page 42 - MetalForming March 2020

Changes in Store for the Auto Industry
and mileage occurring in China.
In addition, due to rising population figures and higher mobility demands, personal mileage will continue to increase, rising by nearly 25 percent in the United States and Europe by 2030, and a staggering 183 percent in China. With the combination of more shared and autonomous vehicles on the road, and more miles driven, auto- mobiles will require replacement much sooner. This holds, according to the report, even though automobile active- lifetime mileage will increase due to expected lower maintenance and repair
needs, and lower accident rates. Vehicles used in traditional ways will remain in the inventory for a com- paratively long time. By contrast, autonomous, and, in particular, shared autonomous vehicles will be changed out far more frequently. In-use inven- tories will drop, according to the report, as consumers take advantage of autonomous and shared vehicles. PwC Autofacts, in this report, envisions a U.S. inventory reduction of 22 percent, to 212 million vehicles, with Europe seeing a 25-plus-percent decrease to about 200 million. Unique to China, inventory may grow by as much as 50 percent to 276 million vehicles despite
higher utilization.
Despite shrinking inventories, high-
er miles driven in short timeframes, in addition to requirements to constantly introduce new mobility capabilities, will result in rising sales figures. Given these expectations, U.S. automobile sales may grow by more than 20 per- cent to reach nearly 22 million units by 2030, with Europe seeing sales rise by 34 percent to 24 million units. In China, an expected rise of 30-plus per- cent will lift sales to 35 million units.
Reckoning for Manufacturers and Suppliers
Should expectations outlined in the PwC report hold, ramifications for manufacturers and their suppliers are immense. The time has arrived for deci- sions about the long-term automotive supply structure. Between 2020 and 2025, manufacturers and suppliers will
battle against sinking margins while at the same time needing to invest in customer-ori- ented innovations.
Already clear today: The automotive industry has been reducing investment in product range, with another PwC report predicting an investment reduction of 20 percent by the end of 2020, if not sooner. It suggests that those com- panies investing R&D budgets in software solutions instead of product range show stronger growth than their competitors.
Attorney Dan Sharkey, who con- centrates his practice in business contracts and litigation, with a special emphasis on supply-chain issues, will discuss whatever is on the minds of APSC 2020 atten- dees. “Essentially, the topics we cover include how contracts can hurt suppliers,” Sharkey says, “and how stampers can structure contracts to help themselves by minimizing or managing risk. We also discuss disputes and how to handle them—with customers as well as suppliers.”
tations for their vehi- cles.
Rather than the more cosmetic exer- cise of model years, the automotive indus- try will have to deliver annual models using the latest technology, in some cases includ- ing the option of retrofitting earlier annual models to bring them up to date.
To rise to the chal- lenges posed by the restructuring of the automotive industry, manufacturers and suppliers must redis- tribute their budgets quickly and in a tar- geted manner. R&D must focus on soft- ware and services, and
40 MetalForming/March 2020
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At the same time, the
rising sales volume of
new vehicles demands
additional investment in
production capacity for
hardware, and companies implement- ing flexible and scalable concepts now will be positioned to play an active role in shaping the future of the industry. PwC’s future-business models covering the sale and operation of vehicles reveal that it no longer will be enough to focus purely on the production and sale of vehicles.
The automotive value chain no longer will finish at the factory door, but extend across all types of use over the entire lifetime of the vehicle through to its eventual recycling. Automotive cus- tomers and target groups no longer will comprise only direct buyers of vehicles, but all users of the products in private and shared usage models. Software- based direct interaction with every user will lead to higher revenues over the life- cycle of the customer relationship.
Manufacturers and suppliers expanding their business models to cover operational elements will find that the classic target figures, vehicle sales and vehicle inventory, become less important. Younger, technically savvy generations will drive the trend toward mobility, bringing new expec-
the necessary
on manufacturing feasibility and the modularization of vehicles. Software must enhance product performance while services must offer the customer additional functionality and improved user-friendliness. This, in turn, must be integrated flexibly into the hard- ware.
“Again, automakers and suppliers must adjust to shorter development cycles and improved recycling meth- ods,” the report summarizes. “New sales models will compete and con- verge with new operating models; autonomous-driving algorithms will communicate with central transport systems; and electricity suppliers will attract new customers by advertising traction current and battery capacity. Traditional brands will expand their areas of business, and new brands and competitors will attack traditional auto- mobile companies.”
Welcome to the auto industry of 2030.
Knowledge Experts Up and Down the Agenda
To help automotive suppliers navi- gate the churning waters ahead, PMA’s