The crisis in the global automotive industry as a new challenge for logistics – part 1
The crisis in the global automotive industry as a new challenge for logistics – part 2
Individual transport is the largest emitter of CO2. Between 1990 and 2004, its emissions in EU transport increased by 26%. The reason for this is an increase in the average weight of new vehicles by approximately 15%, with a simultaneous increase in engine power by about 30%. It is therefore almost certain that global demand will grow for those models that are economical to operate and powered by eco-friendly fuel. Even in the USA, this shift in demand behavior has been noticeable for some time. The mass markets of China and India, however, will remain open primarily to the sale of cheap cars for a long time. It is therefore not surprising that in recent years, many developed countries have been stimulating research and supporting the development of electric mobility (understood as the operation of electric or hybrid-powered cars), which influences the growth potential of this new technology in the automotive industry. This is true even when one is aware of all the problems associated with using this type of propulsion in cars. High production costs for vehicles and powertrains, limited battery power, low maximum speed, and long charging periods create problems that hinder development. However, it should be pointed out that not only drive systems and energy sources will be changed, but also lighter seats, new body concepts, and additional units (e.g., air conditioning devices) will be implemented. By 2020, the share of new electric or hybrid drives in all regions of the world will reach 20-25%. Suppliers will benefit most from this as a result of shifting processes in value chains (up to 75% in 2015). Experts estimate that the “electro-fleet” in Europe will number over 8 million units by 2020. The shares of hybrid and natural gas-powered cars will grow even more, which allows for the assumption that a scenario of a 20 to 40% share of all European new vehicles with alternative propulsion is likely. Conventional techniques will, of course, be developed in parallel, but the share of electric vehicles will steadily increase, especially in countries with a high level of development.
It is estimated that in Germany in 2020, the market share of electric vehicles will be 5%, while those with hybrid engines (hybrid, mild hybrid, full hybrid, range extender, and plugin hybrid) will be around 20%. For manufacturers with traditional, shrinking technology, this will mean being forced to look for “cheap” locations. Especially since electric mobility is supported by governments in many countries. For example, in Japan, these amounts in research sectors reach 250 million USD annually!
The transition to new, innovative propulsion technologies will cause the following changes:
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changes in functional areas along the value chain and changes in business models
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a decrease in the importance of the electric vehicle as a status symbol and image carrier.
Industry specialists point to 4 possible trends in the development of the value chain for the production of an electric car.
While in traditional production with high cycle times, the key issue was mastering complexity and offering individualized solutions while striving to minimize costs, in the case of electric mobility, production will take on a decidedly modular character and become less complex, similar to the manufacturing of “PCs”. Traditional manufacturers will become – in extreme cases – system integrators. What this might mean for manufacturers of traditional powertrains and their suppliers, given labor costs, can only be speculated. The traditional procurement process in the automotive industry is focused on optimizing in-house production and external acquisition of modules and components, as well as limiting the “outflow of knowledge” to module suppliers. In the case of electric vehicles, entire assemblies will be imported from contract suppliers (“contract manufacturers“). Thanks to this, the supply chain will become simpler, and the global supply system will be strengthened. “Global sourcing” will, in practice, mean fewer suppliers and limited variant diversity. Will there therefore be a threat of former first-tier suppliers attempting to build electric vehicles, despite the market power and brand strength of traditional manufacturers?
The traditional development process in the automotive industry is focused on optimizing existing and developing new internal combustion engines in large, integrated development centers at manufacturers. The development of electric drives is only a variant in the development process. After transitioning to electric mobility, car manufacturers could become system integrators without the ability to create active development. The question therefore arises whether and how manufacturers can maintain the ability to differentiate products, especially when they lack competence in battery manufacturing and the development of lightweight bodies. Car manufacturer marketing will also face a challenge because the rationality of consumer decisions will gain in importance and demand behavior will change (demand for mobility instead of demand for cars).
The article comes from the magazine “Logistyka” 6/2010.