Automotive CEOs are concerned about euro zone prospects and bullish on China. They’re cutting costs, improving processes and products and working on increasing their resilience to macro risks. What else did they tell us?
Automotive CEOs are concerned about euro zone prospects and bullish on China. They’re cutting costs, improving processes and products and working on increasing their resilience to macro risks. What else did they tell us?
The sovereign debt situation in Europe is a source of concern Western Europe is traditionally an automotive stronghold, so concerns about the impact of the sovereign debt crisis on demand for new vehicles are weighing heavily: 57% of automotive CEOs say their companies have been directly affected. The Euro itself is also a cause for concern; 76% see exchange rate volatility as a reason for caution.
They’re cutting costs by focusing on innovation, global platforms 82% of automotive CEOs say they’ve implemented a cost-reduction initiative over the past 12 months, and 69% plan to cut costs further in the next 12 months. That doesn’t always mean cutting heads: 72% intend to focus more on innovating to improve existing processes. We think that includes increasing their reliance on global platforms.
China is still driving growth CEOs rank China tops on their list of growth markets. They’re looking to grow their customer base, and they’re responding to local needs. 59% are tailoring products specifically for China. And as Caterpillar CEO Doug Oberhelman points out, understanding the future competition is another big motivator.
Disruptions in Japan had a huge impact on sector supply chains The automotive industry was hit hard by Japan’s earthquake and nuclear crisis in 2011. 48% of automotive CEOs say it had a direct financial impact, 20 percentage points higher than across the total sample. They’re increasing supply chain resiliency in response; 41% report changes to strategy, risk management or operational planning.
Talent is a top priority It’s difficult to find the right talent. 56% of automotive CEOs fear lack of key skills could drag down growth. 46% of them say the task is getting even tougher, mainly because there aren’t enough skilled candidates. Finding and keeping high-potential middle managers is one major challenge. Having skilled production workers who are located in the right places and have the right knowledge is another concern.