Mobility leaders discuss the top focus areas affecting the sector.
The mobility sector is constantly evolving. Innovation cycles are shortening, new technologies are pushing old ones into obsolescence and customer experience is driving the accelerating pace of change. Therefore, to stay relevant in this transformative era, mobility companies need to balance the increasing business complexity while improving the value they generate.
The 3Q19 Mobility Quarterly analyzes the most important issues influencing the industry covering passenger vehicle (PV), commercial vehicle (CV), automotive suppliers, logistics and airlines sectors.
The key discussion points are illustrated below:
1. Geographic developments
In the US, favorable consumer economic conditions are driving growth with strong retail and e-commerce sales. Latin America has also started seeing healthier trends driven by growth in vehicles sales. However, on the other side of the globe, most mobility peers are witnessing a sales growth decline, particularly in China. When it comes to Europe, the performance remains weak, and automotive companies are forecasting 2020 production to decline year over year. On a more positive note, product categories related to safety, new technologies and electrification are witnessing an uptick.
2. Operating costs
The mobility sector is facing headwinds from major currencies including the euro, British pound and Japanese yen as they continue to weaken against the US dollar. There is also the depreciation of the Chinese yuan, which is offsetting improvements in profits and sales growth in the Chinese operations of global companies. On the upside, companies are still investing in launches and R&D, and automotive companies are restructuring wages with new labor agreements, offering voluntary buyouts to increase manufacturing flexibility.
3. Restructuring initiatives
A major change in the sector is the restructuring of initiatives that firms have taken seriously. Companies have begun to launch business-wide efficiency programs and are examining each component of their cost structures from a strategic point of view. PV peers and suppliers have also begun to reduce headcount as they optimize their manufacturing capacity and realign their corporate structures. And this trend seems to show no signs of slowing down.
4. Evolution of mobility
The real game changer that the industry awaits is the launch of fully electric vehicles. While CV peers continue to focus on autonomy, semi-autonomy and remote operations, PV peers are working on the joint development of autonomous vehicles (AV) with other automakers and technology companies. And major logistics companies are leveraging alternate delivery vehicles (ADVs) built on autonomous, electric or a combination of both technologies. It is exciting to note that some of these first- and last-mile solutions are being applied successfully in the real world.