Supplying the future of mobility

Automotive suppliers in the evolving transportation ecosystem

In navigating the past several years, auto suppliers have encountered any number of speed bumps and traffic delays. Leaders at original equipment (OE) suppliers have tackled automaker demands for productivity gains, stricter environmental and safety regulations, increasing liability for warranties and recalls, and the relocation of capacity as automakers have pushed into emerging markets. And somehow, through all the uncertainty and upheaval, suppliers have thrived: Since 2010, OE sales revenue growth has outpaced that of the top automakers.

The extended global auto industry is facing what could be its most dramatic challenges in a century—driven by a convergence of technology, regulatory, and consumer trends—and suppliers seem right in the middle. The future of mobility appears to have already begun presenting new challenges to suppliers across the industry. And, the magnitude of challenges that suppliers face is likely to increase.

The emergence of a new mobility ecosystem offers suppliers new choices for where to play and how to win. This article proposes five strategic plays that offer distinct positions from which suppliers can choose to compete in specific parts of their business portfolio or all of it. Implementing these plays may require difficult choices and tradeoffs, but suppliers acting today to establish a sound position for the future can increase their likelihood of thriving through the period of change ahead.

Given the transformation of industry structure and dynamics under way, suppliers will likely need consider how well their portfolio of businesses is positioned to address the transition. Supplier businesses should consider five potential strategic plays:

  1. Win on cost and scale
  2. Find a differentiated niche
  3. Go beyond the core of automotive supply into new business models
  4. Lead performance innovation
  5. Trailblaze into new mobility business models centered on differentiated offerings
(English version)
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