Collaboration, Competition and Innovation
Challenges for the Automotive Industry
Collaboration and innovation were the catchwords at the 27th Automotive Industry Meeting held on IESE’s Barcelona campus last November under the heading "Tectonic Shifts." Consumer habits are changing, there are new players and new markets as well as new technologies, all of which combine to make it a period of upheaval for the automobile business.
"We face a process of transformation and development that is going to define the future of the sector," said Francisco Roger of the automotive sector of KPMG Spain, which co-organized the meeting. Mathieu Meyer, his KPMG counterpart in Germany, listed four trends that will define the future: new financing models, driverless cars, e-mobility and the increased use of IT in cars.
Antonio Romero-Haupold, CEO of Faconauto, agreed. "I don’t know if it will be electric or hybrid," he said. "What I do know is that the car of the future will be interconnected." Alan Perriton, president of VIA Motors, said his company intends to make the vehicle "a mobile energy center."
Takashi Shirakawa of the Nissan Technical Center Europe, said society needs to change and choose the right vehicle for the job: gasoline-driven cars for long distance, hybrids for shorter journeys and electric for cities. Marc Sachon, IESE professor of operations, said that many people believe that car sharing and systems that free up the driver are an inevitable part of the future.
Pascual Dedios Pleite of Siemens Spain added that by 2050, 40 percent of the world’s population will live in cities so we will have to use smaller cars, more public transport, as well as car sharing.
Brandon Yea, president of Kia Motors Europe, said the key factors for successful growth are quality, design and a good product. Lighter and more versatile materials are going to play an important role in vehicle design. Jose María Tarragó, executive vice president of Carbures Europe, emphasized the potential of carbon fiber, despite its expense.
Not only will showroom dealers not disappear, they will be bigger and will sell a range of marques, not just one, according to Romero-Haupold. Buyers will have already made their buying decision in the Internet, he said, and dealers need to be more open to the online world. Jaap Timmer, CEO of European Car Dealers, criticized the European Union for "its lack of vision and strategy, which is just what the sector needs right now."
The increased wealth of the middle classes in countries such as Morocco and Brazil presents the sector with new opportunities. Antonio J. Cobo, managing director of General Motors Spain, described Brazil as "a giant waiting its turn. It’s going to be a new global player and a unique opportunity for the automobile industry." Increased demand, easier access to credit and economic growth have made it a juicy opportunity.
Jaume Ribera, IESE professor of operations management, discussed a study of the automobile market in China carried out by CEIBS business school. Foreign, domestic and joint ventures are all involved but the latter emerges as the best option for penetrating the market. Boosted by government subsidies and other incentives, production is exponential and imports are increasing, while exports are negligible. The Chinese think European cars are more reliable than home-grown vehicles.
The closing session was led by Josep Moragas, CEO of ACCIÓ, who warned that we will pay heavily if we don’t prioritize the automobile sector, which is "a fundamental part of our industry and our industrial history."
Among other participants were: José Manuel Machado, president of ANFAC and Ford Spain; Franz Cremer, former head of human resources of senior executives at the BMW Group; Germán López Madrid, president of Volvo Car Spain; José Luis López-Schümmer, CEO Mercedes-Benz Spain; Jens Sulek, director of European marketing, Porsche; Henning Wallentowitz, emeritus professor of automotive engineering at the Universidad RWTH Aachen, Germany and ZF Friedrichshafen AG; Takashi Shirakawa, vice president of Nissan Technical Centre Europe in Spain; Juan José Díaz, president of Díaz Ruiz & Partners; Paul McVeigh, editor in chief, Automotive News Europe; Mario Armero, executive vice president ANFAC; Pascual Dedios, CEO of the industrial sector Siemens; Francisco J. Riberas, president and CEO of Gestamp and Jean Marc Gales, CEO of the European Automotive Suppliers Association (CLEPA).
The meeting was organized jointly with KPMG, with the collaboration of La Vanguardia, Russell Reynolds Associates and the STA Fundación. It was coordinated by Prof. Marc Sachon and the founding presidents, Pedro Nueno and Juan Llorens.