As a special guest on Autoline After Hours: The Auto Industry on the Eve of Destruction, I recently had the opportunity to discuss the impacts of major disruptors occurring in the automotive industry. Hosted by John McElroy of Autoline.tv, the show also featured Joe White, Reuters and Gary Vasilah, AD&P.
While most industry insiders are familiar with the seismic shifts happening among OEMs and traditional automotive suppliers due to electrification, autonomous vehicles, connectivity, and shared mobility, we delved deeper into some lesser known details, such as:
- The monetization of data. As software algorithms, such as MobileEye, capture data for OEMs, what new opportunities exist for selling this information to mapping companies, city planners, fleets and more?
- Electrification is a game changer for all players, as traditional suppliers compete with new entrants into the industry, as well as existing companies. For instance, 56% of the Chevy Bolt’s content comes from LG. How will new entrants, such as Intel and LG, significantly change the marketplace for traditional suppliers of mechanical parts?
- Scale is necessary to be competitive, which is why we’re seeing more attempts to leverage costs through consolidation, partnerships and mega mergers, such as the recent Ford-VW announcement. Electrical components scale differently than mechanical components, and suppliers need to be aware that “This industry is going to scale with or without them.” How do suppliers make the transition, and more importantly, who will be first to unlock the key to profitability?
We also tackle the question: Is the future now? Yes, we’re already seeing divestitures and forecasts of overcapacity in key segments. Over the next 10 years, suppliers and OEMs will face a series of difficult decisions, and they all must start addressing this now.