Before the new technology really brings dividends to car companies, the economic recession and demographic changes may lead to a double blow to car sales. The rise of electric vehicles, autonomous driving and shared travel services will also be a fatal blow to some car companies. Under the triple threat of economy, population and technology, how can car companies save themselves? The storm is coming When the leadership of car companies is busy dealing with technological innovations, few people have noticed that before the new technology really brings dividends to car companies, the economic recession and demographic changes may first bring a double blow to car sales, weakening the strength of enterprises. Even making it difficult for some companies to go through the transition period. Bain's analysis shows that the US auto market may be the first to suffer from economic recession and aging population, and may suffer the most serious impact. In contrast, electric vehicles and new travel services may be the first to enter the Asian and European markets and expand rapidly. Bain believes that by the mid-2020s, the Asian and European auto markets will also encounter this series of effects, and it is impossible to change. The recent surge in demand for US autos has largely offset the impact of the 2008-2009 recession and has surpassed historical structural demand lines, but this has masked the baby boomer generation’s retirement peak. The impact of a critical demographic turning point. By the beginning of the 2020s, the population growth rate of the 15-64 year old in the United States will be reduced to almost zero. Bain's analysis shows that by 2025, only a demographic change will reduce the overall demand for the US auto market to 11.5 million. The decline in the growth rate of immigration will further reduce the structural demand to around 10 million vehicles per year by 2025. As electric vehicles reach the critical point of full development, there will be a third threat to the automotive industry in the middle of 2020. The degree of disruption and speed that the internal combustion engine will soon face may be comparable to the dilemma faced by Nokia and BlackBerry when Apple introduced the iPhone. Industry impact By 2022, pure electric vehicles will become increasingly popular. With the rapid spread of electric vehicles, OEMs that are ready to take full advantage of this advantage will precede competitors who are hesitating to wait and see. Sales contracts for internal combustion engine auto parts suppliers will plummet and industry consolidation will accelerate. As autonomous electric vehicles are likely to be commercialized in the mid-2020s, shared travel services will also flourish. Under the combined effect of the two trends, consumers will begin to reduce their car ownership: first, the increasing number of low-cost robotic taxis, and the second is to replace two or more family cars with a self-driving car. This shift, in turn, will lead to a reduction in the number of drivers of the next generation. The "combination boxing" of electric cars and self-driving cars will cause serious damage to the global automotive value chain. Every source of profit for traditional car dealers will experience a structural decline, including new car sales, auto finance, repairs and maintenance. For vehicles that were once branded, the characteristics of mass commercialization will become more and more obvious. Especially for the next generation of consumers, as new car services become more diversified and customer needs change, the control of the OEMs on the market will be more The smaller it is. Over time, automakers face the risk of becoming a contract manufacturing company like Foxconn: they can only supply hardware, while new innovators run their businesses, dominate the market, own customers and get high returns. The self-driving car network will gradually expand from the city center to the suburbs and villages. As the fleet and shared travel service companies become the main buyers of the car, the traditional dealer model faces the threat of subversion. The rise of autonomous vehicles will in particular create a huge disruption to the trucking and logistics industry, with millions of trucks, taxi drivers and distribution posts likely to disappear. The first companies to adopt autonomous vehicles will build cost advantages that will help them gain market share from other freight and even rail transport companies. Self-rescue method Some companies are able to make the right choices and act quickly as a center. Their secret lies in clarifying the uncertainties facing the company and classifying these factors into “critical†and “insignificant†types. Next they envisioned some possible future scenarios and detailed the threats and opportunities involved in each scenario. Based on these scenarios, the corporate leadership has developed a series of strategic options that allow them to focus on a single individual measure and flexibly adjust to different scenarios. Finally, they pay attention to some obvious signs of major changes in the market, and once they are discovered, they will act in accordance with the clear steps in the scenario plan. This approach allows companies to be proactive in detecting trends—such as changes in the profit pool and the speed at which new technologies are developed in the marketplace. Companies with this knowledge can preemptively steal market share and profits from competitors. Even in the face of uncertain environments, they can develop strategies by investing in “three steps of no regrets,†making options and precautions, and preparing for large-scale investments. details as follows: 1. No regrets Such actions can enhance corporate resilience and bring benefits to the company under any circumstances. Reducing costs and improving operational efficiency are typical “no regretsâ€. Another important step is to clarify what “no regrets†are. During the change period, different profit pools have decreased, and usually such trends have begun to appear very early. In the case of businesses with shrinking profits, the company leads or adjusts the level of investment, or directly sells assets; and in the field of future profit growth, adjusts its position through mergers and acquisitions and other capabilities. 2. Selection plan and preventive measures Successful companies do not fully disperse firepower, they often develop strategic options for a particular scenario. For example, setting up a joint venture to enter the market at a lower cost; or making project changes, although the cost will increase, can increase business flexibility. When deciding which of the established options to invest in, the business leadership needs to calculate to verify that the measure has a higher value than the required cost in different potential scenarios. Reassessing the supply chain is also a critical step. Once some suppliers are unable to survive the upcoming transition period, this is like a domino for automakers – the collapsed supplier will immediately force the auto factory to close. The leadership must carefully examine the suppliers of the company, identify which ones are likely to be successfully transformed, and take action to make changes that ensure a stable supply. 3. Large-scale investment The key to large-scale investment is timing, as the returns from large-scale investments in different scenarios may vary. Companies must wait patiently to understand the best time to attack. At the same time, planning ahead is critical, and it gives companies the flexibility to prepare for a quick attack. Identifying the right market signs ahead of competitors can bring you 6-12 months of valuable lead time. For car companies, one of the main signs of the rapid development of electric vehicles into commercialization is that the price of electric vehicles has fallen below the price of the same model of internal combustion engines. In the field of autonomous vehicles, the emergence of the first large-scale commercialization service is also an important sign. Other signs are related to some of the emerging demographics and trends in consumer behavior, such as the popularity of online cars, the boom in motor vehicles, and the decline in the proportion of drivers in young people. Engine switching We call the original core business of the automaker "the No. 1 engine", and the new business and business model of the automaker is the "No. 2 engine." After the big turmoil, one of the results faced by automakers is that the "engine No. 1" will decline. Therefore, these car companies need "second engine" to achieve future growth. The two engines require different methods. The “No. 1 Engine†business is characterized by regularity, repeatability, small continuous improvement, prudent risk assessment and rapid return on investment. The “No. 2 Engine†business is characterized by agility and creativity, and requires companies to be prepared for investment, not all investments will ultimately be rewarded. The automobile, transportation and logistics industries are about to usher in a series of economic shocks and technological innovations, which will cause many traditional automobile industry ecosystems to face structural decline. Companies that are passively waiting for and responding to change have the risk of falling market capitalization and impaired investment capacity. Business leaders who meet the requirements of the next era can quickly adjust and respond positively before the change. In the next 10 years, the auto industry is in turmoil, and developing smart strategies ahead of time means paying attention to the signs that change is approaching the tipping point and taking action before competitors before market forces show their power. Real Wood Slat Panel,Acoustic Wall Panel Slat,Wood Wall Panel,Acoustic Board Hebei RooAoo New Material Technology Co.,Ltd. , https://www.raacoustic.com
Abstract Before the new technology truly brings dividends to car companies, the economic recession and demographic changes may lead to a double blow to car sales. The rise of electric vehicles, autonomous driving and shared travel services will also be a fatal blow to some car companies. The triple power of economy, population and technology...