8 minute read 21 Jun 2021
Bhumibol highway bridge twilight under view

How uneven recovery reflects uncertain prospects for mobility growth

By Randall Miller

EY Global Advanced Manufacturing & Mobility Leader

Passionate about manufacturing, mobility and disruption. Champion for women and diversity & inclusiveness in the Advanced Manufacturing & Mobility industries.

Contributors
8 minute read 21 Jun 2021

The 1Q21 Mobility Quarterly analyzes the top market forces and company responses discussed by leaders of 36 mobility sector companies. 

In brief

  • Global automotive sales are witnessing mixed recovery in 2021 amid supply chain pressures and prevailing COVID-19 circumstances.
  • The transportation sector is witnessing robust e-commerce demand and undergoing a major digital transformation to cater to the rising demand pressures.
  • While the mobility industry has developed a clear view of the supply chain, it is still operating in reactive mode.  

The 1Q21 Mobility Quarterly (pdf) analyzes the top market forces and company responses discussed by leaders of 36 mobility sector companies, including passenger vehicle (PV) and commercial vehicle (CV), original equipment manufacturers (OEMs), airlines, logistics, shipping, automotive suppliers and retailers, during public earnings calls with analysts during April and May 2021. This update tracks the movement of these themes from quarter to quarter to provide a perspective on shifts in the sector landscape.

Starting this quarter, we have segregated the top five themes as “market forces” and “company responses” to separate change drivers from strategic initiatives. A market force is a trigger event or a driver of change that includes political, economic, competitive, social, technological, legal and environmental factors. A company response is a company action or strategy in response to a market force(s) that can help achieve the next level of growth and mitigate risks.

Themes that stood out include the following:

  • Demand patterns is the top market force this quarter. The US is showing signs of demand rebound as consumer trends remain strong and vaccination rollouts continue; China is witnessing strong demand recovery due to the effective pandemic containment, while Europe is expected to witness growth in 2H21 following widespread vaccinations. E-commerce continues to drive demand for logistics and CV companies; automotive customers are also adopting digital sales channels both for vehicle and parts sales.
  • Product design and innovation is the top company response this quarter. The COVID-19 pandemic has accelerated digital transformation in the mobility industry; companies have fast-tracked digitization of products, processes and shop floors to remain viable. Driven by the tightening emission regulations across markets and consumer demand for green mobility, automakers have set up steep targets for portfolio electrification and continue to invest in green mobility manufacturing and deployment.

The top five market forces and company responses emerging from the 1Q21 earning calls are listed in the charts below. Themes are segregated as market forces and company responses, delving down deeper identifying the sub-themes for each. We have also added the prevailing sentiments and evolution of themes every quarter over the past year.

Explore the section below for a view on mobility subsectors and how different market forces are driving various company responses. Hover over the individual bubbles for more details; the size of the bubble denotes the number of times a theme is discussed in the earnings call.

  • Automotive sector trends

    Automakers are updating guidance to reflect heterogeneous recovery in demand and rising sources of disruption, while continuing to drive innovation and strengthening commitment for decarbonization and sustainability adoption across the value chain. PV and CV OEMs, as well as auto suppliers, are expanding production of electrified vehicles and related components to cater to the rising demand and increasing investments in electric powertrain technology. 

  • Transportation sector trends

    In the transportation sector, logistics and shipping companies are prioritizing capital expenditures on digital technologies and expanding facilities to bolster domestic and international business growth. Companies are also leveraging artificial intelligence (AI) and robotics to provide an omnichannel experience and enhancing the overall customer experience. Airlines are expecting total capacity utilization to improve in 2Q21; they remain focused on driving customer engagement via direct touchpoints and enhancing onboard experience to generate higher revenue premium per passenger.

  • Scope, limitations and methodology

    The identification of the top market forces and company responses is based solely on an examination of earnings calls held in April and May 2021.

Summary

Mobility companies can stay ahead by being responsive and resilient, and planning around scenarios that could cause the next disruption.

About this article

By Randall Miller

EY Global Advanced Manufacturing & Mobility Leader

Passionate about manufacturing, mobility and disruption. Champion for women and diversity & inclusiveness in the Advanced Manufacturing & Mobility industries.

Contributors