The Automotive Industry

The automotive industry is responsible for designing, manufacturing and selling motor vehicles. This includes cars, motorbikes, vans and specialist vehicles.

The automotive industry has a significant opportunity as increased incomes lead to increased spending on transport.

As car markets in different countries reach maturity the need for a competitive advantage becomes increasingly important. Environmental drivers, which will be part of the growing emerging economies’ demand, will also lead to innovative changes to motor vehicles in terms of lower emissions from combustion engines and non-fossil fuel alternatives.

Investments in new-age driverless, and low emission hybrid and electric vehicles, aiming at reducing energy consumption and carbon dioxide emissions, are expected to redefine the concept of automobiles in the near future, with the potential of disrupting the automotive industry.

The shift for more fuel-efficient vehicles to decrease energy consumption and air pollution is a challenge for the automotive industry.

The automotive industry is currently focusing on to improve fuel efficiency, lightweight materials, eco-friendly vehicles, connected cars, autonomous vehicles. automobiles in the near future, with a potential of disrupting the automotive industry.

Significant role is being played by smart electronics and software in vehicle innovation, particularly in active safety and infotainment features.

The Automotive industry segments include the manufacture of cars, motorcycles, three-wheelers, trucks, hybrid vehicles and multi-utility vehicles.

It involves the manufacturing of bodies, engines, parts and vehicles for transportation. Such vehicles include motorcycles, cars, light commercial vehicles and heavy commercial vehicles.

The most important classes of road vehicles include cars, commercial vehicles and two-wheelers; motorcycles and scooters that are becoming increasingly popular. Harley-Davidson, Hero, Polaris and Piaggio are among the largest companies in the two-wheeler space.

Europe, China and the United States are counted among the most important automobile markets today, both in terms of production and sales. Toyota, Volkswagen and General Motors are the world’s leading automakers.

Commercial vehicles are often grouped into eight different types, ranging from Class 1 light duty trucks to Class 8 heavy duty haulers. The largest truck manufacturers include Daimler, Dongfeng, Tata, Volvo and Paccar. Heavy equipment manufacturers include Caterpillar, Volvo and SANY.

We anticipate changes in the value chain of the automotive industry, as Automotive OEMs, component manufacturers and raw material suppliers, are continuously looking for modifying and upgrading their products offerings.

In response to the accelerating demand for automotive parts, the sector is becoming overcrowded marketplace and given the extended lifecycle of cars, sales growth is getting constrained. In light of these developments, it is important that automotive parts manufacturers find ways of enhancing revenues and maximizing profit in the field of aftermarket services.

Vehicle manufacturers in search of economies, are outsourcing the production of vehicle parts, including brakes, tires, seats and engines. Continental, Bosch and Denso are among the leading Tier-1 automotive suppliers. Continental AG engages in the manufacturing of brake systems, engine injection systems, tires, tachographs and vehicle stability control systems, while Bosch supplies controls, electrical drives, brakes, starter motors, generators and steering systems. Denso is a specialist in the field of powertrain control systems, electronic and electric systems, small motors and thermal systems. Japan and Germany are among the leading producers of automotive parts.

Automotive electronics are one of the most dynamic aspects of the global automotive industry that includes driving systems, charging systems, power management, cruise control systems, and security systems, reactive airbag and stability control systems, which are expected to witness higher growth in the coming years.

The Connected Consumers today are seeking a brand experience that delivers maximum convenience and safety, and being fully equiped with tech gadgets, navigation systems, IoT-enabled parking sensors, automatic lights, windscreen wipers, and infotainment systems.

Technology is pushing the automotive industry to new directions with hybrid autonomous and electric vehicles, with technologies such as telematics and advanced driver assistance systems (ADAS), and automobile manufacturers are forced to update their product portfolios.

Artificial Intelligence (AI) is driving transformation in the automotive and transport industry paving way for the integration of advanced navigation systems and parking sensors with automotive technology.

Advanced Technologies & Automotive Systems

New technological changes in engine and exhaust systems, such as Turbocharged Direct Injection (TDI), Variable Valve Timing (VVT), and Common Rail Direct Fuel Injection (CRDI) are being used to improve fuel efficiency, better emission standards, enhanced vehicle performance, as well as reduce engine weight and engine size.

Smart electronics installed in modern cars is expected to increase across safety, infotainment, comfort and engine control. Also for the introduction of features in vehicle interior that make for a great driving experience.

Innovation and technologies are transforming the future of the automotive industry. Telematics, cloud computing, IoT, smart applications, artificial intelligence, cloud-based services, connectivity, smartphone’s integration, telematics, 3D printing, V2V, V2I technologies, wireless communication, and many more high-tech applications are revolutionizing the complete automotive ecosystem.

The industry is witnessing rapid changes owing to continuous innovations in materials used such as alloys, light weight metals, fiber, plastics, and composites.

Major automotive systems includes fuel system, exhaust system, transmission system, suspension system, cooling system, electrical system, and braking system.

Innovative manufacturing technologies have supported the transformation for automotive components and materials due to the stricter emission norms and improvement in vehicle performance, safety and engine efficiency.

Consumer preference and regulatory safety requirements is driving the market for innovative and high-tech solutions for both driving support and safety systems. Connected car, V2V, and V2I will play a key role in accident prevention, driving comfort, and enhanced safety. Traffic sign recognition, lane departure warning, blind spot detection, night vision systems, and other technologies are expected to increase in the near future.

Our reports offer insights on drivers, challenges and opportunities, covering the impact of industry standards, environment regulations, and other factors impacting market growth, as well as the components and materials value chain.

Reports highlight evolution such as hybrid and electric vehicles, driverless, connected cars, the shift towards alternative fuels and emission control technologies.

The automotive industry is showing some exciting new developments. Digitalization and electronic innovations, as well as advancement in automotive technology, and manufacturing has transformed the industry.

Digitalization, enables vehicle manufacturers and suppliers to benefit from increased productivity, greater flexibility and shorter times to market. Customers also benefit from personalised, higher-quality vehicles.

The modern automotive industry is highly capital-intensive and competitive. Operating against a backdrop of demand shifts, consumer preferences ambiguity, volatile oil prices, and increasingly uncertain returns, they continuously address critical strategic, operational, and systems issues required to leverage their capabilities and succeed in this rapidly evolving marketplace.

Trends impacting the next decade

As the industry recovers, automotive companies across the value chain must focus on:

  • profitable and sustainable growth

  • financial and operational flexibility

  • investments in new technologies

  • seizing opportunities in high-growth markets

According to Ernst & Young, automotive companies should ask themselves the following 5 questions to help prepare for the next decade:
  • How will products need to adapt?

  • How will business models need to adapt?

  • What are the new market dynamics?

  • What are the supply/value chain issues and implications?

  • How will demand for vehicles and mobility evolve?

The growing interest in alternative powertrain technologies, especially the increased electrification of vehicles, is affecting the entire automotive industry value chain and creating new mobility trends involving several new, non-automotive stakeholders.

Existing vehicle manufacturers are adding alternatively powered vehicles to their product line-ups, such as plug-in hybrids and pure electric vehicles, while new market entrants are using transformation of mobility drivers as their door into the automotive industry.

Leading companies position themselves flexibly and opportunistically by refocusing on their manufacturing, distribution and service network strategy in order to achieve sustainable growth.

Shifting Demand / substantial variation across geographies - China is now the largest light vehicle market in the world. Brazil, India and Russia have also experienced strong double digit annual growth in recent years. At the same time, U.S. and European demand dropped dramatically, while consumer preferences for vehicles are ambiguous in nature, resulting in segments which are still growing while others are in decline. Leading companies position themselves flexibly and opportunistically by refocusing on their manufacturing, distribution and service network strategy in order to achieve sustainable growth.

Lack of Standardisation Uncertainty - Energy, emissions, and fuel efficiency requirements are not standardised globally, which generates further uncertainty and the need to spread the risk across multiple powertrain technology platforms.

Restructuring - - Efforts are being made to clean balance sheets, remove excess capacity, and restructure costs - to make more efficient use of production capacity and make a profit at slimmer volumes

Firms must brace themselves for substantial changes against rising costs and decreasing demand.

All elements of cost—direct labour, material, and overhead—must be addressed in a comprehensive manner to create more affordable alternatives for customers demanding greater fuel efficiency and alternative ‘green’ fuel options.

With the advent of carbon emissions trading schemes in Europe and, increasingly, around the globe, the need to track and reduce carbon will grow increasingly important.

Our reports provide key statistics and analysis on market operating conditions, business challenges, current and historical industry growth trends, and more. They offer an explanation of the structure of the industry and analysis across the value chain, market sizes, revenue growth, market and product trends, demographics, price trends, product/company rankings or comparisons, key players profiles, comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies,designed to provide a better understanding of a market's competitive landscape, and market forecasts, projecting how current trends will influence industry sales and consumption patterns in the future, latest market developments and analyzing the potential effects of regulatory changes in conjunction with the background macroeconomic outlook.