INDUSTRY REPORT
The emerging market still has potential for evolution with the development of more value-added , customer-oriented digital services
emerging EV industry . Supply-chain disruptions caused by COVID-19 and the Russo-Ukrainian war have led to a surge in commodity prices , which affected the global automotive value chain . In addition , economic sanctions between multiple countries have complicated the procurement of EV components ; therefore , manufacturers are exploring in-house capabilities to reduce their dependence on long-term strategic agreements with component suppliers ,” outlined market analyst , Frost & Sullivan .
Looking ahead
However , despite the contracting market and pressure from inflation and energy costs , the automobile industry continues to invest massively in R & D and in the skills and technologies driving the green and digital transition .
“ Millennials and Generation Z made up more than 40 % of the North American population in 2021 . As they become the largest car-buying group , they will expect a seamless and digital purchase journey . With
Above , below and opposite : Images from Shutterstock . com .
high-speed 5G internet becoming more common , marketplace providers will be able to offer metaverse experiences that include sophisticated augmented and virtual reality that can superimpose images on a realworld view or simulate a 3D image ,” explained market analyst , Frost & Sullivan .
“ The emerging market still has potential for evolution with the development of more value-added , customer-oriented digital services . For example , some marketplaces do not yet allow seller and buyer interaction through a chat interface . Marketplace providers will have to focus on digitalising their web portals for all aspects of the customer journey including vehicle tours , configuration , digital signature and the ability to facilitate transactions digitally ,” it added .
Vehicles are emerging with innovative and functional connected features that are designed to improve the driver and passenger experience . The embracing of electric cars by incumbent car manufacturers is likely to have strong repercussions for the market .
In line with climate change mitigation strategies , fossil fuels such as diesel and unleaded petrol are being phased out in favour of more eco-friendly energy sources with lower carbon footprints . Automotive OEMs have therefore invested in a range of promising technologies . As well as electric vehicles , some OEMs ( such as Renault ) are also working on hydrogen-powered cars , LPG-powered cars and hybrid cars . Renault sees hydrogen cars as a complementary solution to electric cars in the transition to zero emission and sustainable mobility .
However , in the shorter term , it is factors such as flexibility and resiliency that will spell success in the market .
“ If one looks across the sector , I sense that the topic of supplier resiliency will come to the fore in 2023 . The macro environment is not conducive to success for those suppliers who ’ ve not got a good handle on costs or a degree of operational flexibility to manage the headwinds . This is most apparent in Europe ,” said Matteo Fini , Vice President , Automotive Supply Chain , Technology and Aftermarket , S & P Global Mobility at an AutoTech Insights event in December 2022 .
“ High energy costs combined with stagnant volumes and rising financing costs will create major pressures for suppliers in the region ….. Energy-intensive parts of the value chain , such as metal foundries , that also rely on volumes for returns will have to navigate the maelstrom . Indeed , any company that overstretched itself in 2021 and early 2022 with major investment programmes contingent upon a return of precrisis volumes will have to reconsider its priorities for survival ,” he added . n