Automotive industry is facing tough challenges in the future. There are some challenges that carmakers need to address to sustain their profitability. Some industry driving forces that will shape the future of the automobile industry are as follow:
1. Shift in consumer demand. Greater numbers of customers are utilizing online technology. Consumers want more connectivity and expect a seamless service across the buying process decision .
2. New manufacturing technology : The very famous of manufacturing technology in automotive industry is assembly line, which had been initiated by Ford motor company many years ago. The current manufacturing technology relies on the labor capacity. However, as the emerging of new technology, manufacturing technology shift to the new method using robotic. This shifting in technology is driven by …show more content…
Industry Key Success Factors
1. Innovative Product: To maintain the sustainability profit, the automakers should provide innovative product since the demand for the connected, efficient, and low cost vehicle is growing. Some challenges that affect the automotive industry to be more innovative are (1) the cost of electronics and software content is 20% lower than the cost 10 years ago, (2) electronics systems contribute more than 90% of innovations and new features of vehicles and (3) timeframe for automakers to launch new products is 3-4 years, however the cycle of the vehicle software is more faster than that .
2. Economies of scale: Automotive industry typically bears the big amount of fixed cost on their operations. Therefore, to maintain the lower total cost, the great number of production should be achieved. The number of production determined the price of the cars. As the number of production increases, the price of the vehicle will decrease. Therefore, to produce the vehicle in the size of economies of scale is important for automaker to achieve the sustainability growth and compete with the