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Study: Automotive Value Chain 2025+

Four future scenarios

The automotive industry is in the midst of an historic change right before our eyes. Nearly every day we read in the news about an actual or future shake-up in the market, new business models, or a new value chain. The question is how to deal with this change? In the face of uncertainty, scenario planning permits us to map out clear paths into the future. This is by no means limited to qualitative observations. Using a parametric, driver-based model we are able to show that quantitative insights at the income statement level are possible in scenario planning too, permitting us to provide sharp, qualitative views based on figures.

This study attempts to shed some light on possible developments in the automotive value chain as it progresses towards 2025. The approach used makes it possible to take the necessary decisions on an informed basis, actively shape the future of the industry, and continue playing a significant role in 2025 and beyond.

Study insights

News of disruptive, even historical, changes in the automotive ecosystem has dominated industry debates in recent years. Fundamental readjustments to the whole automotive value chain seem inevitable. It is still not clear, however, where the journey will end, as many developments are still speculative. For example: when will e-mobility (finally) be broadly accepted in the market? Despite all this uncertainty, automotive leaders are required to make investment decisions today, in order to have know-how, production capacity, and stable supply chains in place once markets demand them. Decision-makers are feeling pressure to act. The question is: what are the right decisions in these uncertain times?

With the study “Automotive Value Chain 2025 and beyond”, we are aiming at providing approaches and tools to support automotive decision makers in answering this question. We cooperated closely with established automotive researchers and practitioners and identified the most important drivers of future value chain developments.  We focused on the upstream part of the value chain, i.e. from R&D to outbound logistics, as we expect massive implications for assets, people, and supply structures in this area. For this we applied the approach of scenario-based business modeling: we identified four plausible setups an OEM’s value chain might have in the year 2025. We are already using the results of our model calculations today to help automotive decision makers challenge their own forecasts and strategic plans systematically. By publishing this study, we are pleased to share our thinking now with the broader public.

Most of the scenarios developed in the study demand a significant willingness to change on the part of automotive OEMs. Today’s value chain decisions will without doubt have massive implications on future assets, employee numbers, and supplier structures across the automotive ecosystem. Scenarios and model calculations can be very valuable for supporting such landmark decisions. The pace and impact of current changes call more than ever for bold action today. We hope you enjoy reading our insights and thoughts on the future of the automotive value chain.

The Future of the Automotive Value Chain

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Scenario video

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